IRS Roadmap Illustrates Complexity of Federal Tax System

Published August 12, 2019

Paying taxes is a complicated process, so the Taxpayer Advocate Service, an independent organization within the Internal Revenue Service, has developed a new roadmap guide for taxpayers.

The “subway map” illustrates the tangled taxpaying process, from getting answers to tax law questions up through audits, appeals, and litigation.

The map is a colorfully snarled web of arrows, icons, and railroad station-style “stops” for different steps in the process of preparing, filing, and appealing a tax return. It’s a headache to look at.

“Anyone looking at this map will understand that we have an incredibly complex tax system that is almost impossible for the average taxpayer to navigate,” said National Taxpayer Advocate Nina Olson in a July 10 news release.

‘Needless Complexity’

The map illustrates the problem of a tax system that is much too complicated for the average taxpayer to understand, says Martin Hutchinson, a financial writer and host of The Bear’s Lair blog.

“There are so many arcane and incomprehensible deductions, it is almost impossible to figure out which ones you’re entitled to,” Hutchinson said.

The U.S. tax system is too confusing, says James R. Barth, the Lowder Eminent Scholar in Finance at Auburn University and a policy advisor to The Heartland Institute, which publishes Budget & Tax News.

“[The map] shows the needless complexity and therefore difficulty in navigating the tax system,” Barth said.

Reduces Tax Compliance

The snarled current tax system strikes taxpayers as unfair, says Hutchinson.

“The sheer complexity itself tends to reduce compliance,” Hutchinson said. “If people go through to file, even using software, and then realize that they’ve missed a $400 deduction, they feel that the system has ripped them off.”

A tax system that requires ordinary people to pay others to prepare their returns doesn’t make sense, says Barth.

“It certainly seems somewhat absurd that one would need an expert to simply pay one’s taxes,” said Barth. “In addition to paying taxes on one’s income, many individuals are forced to pay fees simply to be sure the right taxes are paid, due to the complexity of the tax system.”

‘Not What You Call Simple’

The Taxpayer Advocate Service is working to develop a fully interactive version of the map over the next year, which will serve as a user guide and information source, says Olson.

“This digital roadmap will be the culmination of many years of work and research by TAS into human cognition and learning, notice clarity, and taxpayer empowerment,” Olson said.

“If only taxpayers who are represented by tax professionals have access to that knowledge, then we do not have a fair and just tax system,” Olson said. “Thus, the digital roadmap will be a powerful tool to improve access to justice.”

The roadmap itself is so complex, it’s not clear the average person will benefit from it, says Hutchinson.

“For one thing, it’s seven maps—it’s not what you call simple,” Hutchinson said. “I’m not sure how many taxpayers are used to using this kind of flowchart. I would think the ordinary taxpayer on the street is not used to using that kind of thing.”

‘System Should Be Scrapped Entirely’

The roadmap clearly shows that the federal tax code violates the standards for a fair and transparent tax system, says Edward Hudgins, Heartland’s research director of The Heartland Institute, which publishes Budget & Tax News.

“Any legitimate law must make clear, for better or worse, what it is legal and illegal to do,” Hudgins said. “But it often takes armies of accountants and lawyers to figure out in any given case whether taxpayers are breaching the law or whether the government is simply abusing its power to arbitrarily impoverish them.”

Fundamental federal tax reform is needed, says Hudgins.

“The system should be scrapped entirely,” Hudgins said. “If the government still insists on a system, it should be something like a simple flat tax that will save taxpayers and the economy time and money and reduce government spending.”

“The Taxpayer Roadmap makes starkly clear the disgraceful, convoluted, contradictory mess that is this country’s tax system,” Hudgins said.

Vivian E. Jones ([email protected]) writes from Murfreesboro, Tennessee.

Internet Info

“The Taxpayer Roadmap 2019,” Taxpayer Advocate Service, IRS Publication 5341, June 10, 2019: