Representative John Duncan
2267 Rayburn House Building
Washington, D.C. 20515
Re: Internal Revenue Code
Dear Representative Duncan,
Ever notice in March and April, "everyone" talks about simplifying the code? Of course it doesn't happen, but it feels good to talk about it.
An article published on findlaw.com in 2002 stated that it was over 4,500 pages long. Why is the code so long and complicated? The article says it so well: "Part of the problem is that many tax laws are passed for purposes other than raising money." Want to deduct your mortgage? That has to be codified. What about those child tax credits? Education credits? It has to be put in the code. People on one hand want their deductions and benefits, but then on the other hand say the code should be simplified.
I reviewed the 2003 Lawyers Edition of the United States Code. Title 26 (Internal Revenue Code) not surprisingly was the longest. It was seven volumes (as compared to roughly 2-3 volumes for every other title), 100 chapters, 9,833 sections and roughly 8,600 pages. By comparison, Title 11, the Bankruptcy Code, although is eight volumes, it was 13 chapters and 1,330 sections. I estimate it to be about 5,500 pages.
If you were to read on average 10 sections of Title 26 each day, it would take you roughly two years, eight and a half months to complete. Title 11, at 10 sections a day, would take about 4 and a half months to complete. Again keep in mind that most of the Internal Revenue Code has nothing to do with raising revenue.
In the 2 1/2 years that I have been examining Title 26, I have made the following observations:
Title 26 is very organized. I am sure it takes a lot of planning to do this and make sure that in wording the statutes that it refers to the taxpayer as defined. "FN3 The term "taxpayer" in this opinion is used in the strict or narrow sense contemplated by the Internal Revenue Code and means a person who pays, overpays, or is subject to pay his own personal income tax. (See Section 7701(a) (14) of the Internal Revenue Code of 1954.) A "nontaxpayer" is a person who does not possess the foregoing requisites of a taxpayer." Economy Plumbing and Heating Co. v. U.S., 470 F.2d 585 (1972) See for example Section 5005 which is in Subtitle E, Chapter 51, Subchapter A, Part I, Subpart A.
Title 26 is complex by design. By getting you to spend more of your time trying figure out their code, you will either have less time to enjoy yourself or pay H&R Block a healthy sum of change to figure it out for you.
Title 26 is written by statute writers just like every other title. Congress passes legislation, but the legislators don't actually write the bills or legislation that they vote on.
No doubt, Title 26 needs to be simplified so it will be more in line with the other titles of the United States Code. The result would be more effective administration by the Commissioner of Internal Revenue and the taxpayer would have an easier time complying with it.
Reflecting the clauses in Article 1, Sections 2, Section 8 and 9, I would break this down into the following four areas:
Chapter A-Administration and Procedure: (reflecting today's Subtitle F)
Chapter B-Revenue: (reflecting Subtitle E Alcohol, Tobacco, and Certain Other Excise Taxes), which can be amended to include revisions such as levy of direct tax or different activities/privileges. Today�s Subtitle A thru D are redundant since these taxes being uniform are either excises, duties or imposts in accordance with Article 1, Section 8.
I would not be necessary to label them excise taxes since by definition excises are 'taxes laid upon the manufacture, sale, or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges.' Cooley, Const. Lim. 7th ed. 680." Flint v. Stone Tracy Co., 220 U.S. 107 (1911).
The same is with import duties and imposts since �[d]uties and imposts are terms commonly applied to levies made by governments on the importation or exportation of commodities.� Id.
Chapter C-Deductions: standard deduction for individuals; standard deduction for businesses entities i.e. company, corporation, etc� in accordance to definition provided in Sec. 7701(a)(1)
Chapter D-Definitions: The definitions as provided for in Chapter 79 are adequate. I think however there could be a better way to make the definitions more compact instead of being spread out all over. Take for example, the definition of Gross Income, Adjusted Gross Income, and Taxable Income in Sections 61, 62 and 63 of Chapter 1, Subchapter B, Part I. You have to flip over to Subchapter E, Part 1, Section 441 to get the definition for Taxable Year which is the taxpayer�s annual accounting period. So then you have to go to Sec. 441(c) to get the definition of annual accounting period.
You can check out more of my research at http://www.geocities.com/chrisforliberty/incometax.html
Sincerely,
Chris Fortner
Cc Rep. Ron Paul