PlainTaxTalk Part 1

The Yellow Brick Road to Tax Simplification

“Everything should be made as simple as possible—but no simpler” – Albert Einstein

John Klotsche authored this article and it appears in Tax Notes Viewpoints, June 1, 2009, Volume 123, Number 9. Klotsche served as Senior Advisor to the Commissioner of Internal Revenue from 2003-06 and Senior International Advisor from 2007-08. Before that from 1972-2000 he was a partner with the international law firm of Baker & McKenzie and Chairman of the firm’s Executive Committee from 1995-2000. Klotsche currently is a partner with Caplin & Drysdale in Washington D.C.

“The letter I have written today is longer than usual because I lacked the time to make it shorter.” – Blaise Pascal, French Philosopher

Prologue. The theme of this Viewpoint, tax simplification, draws on an American pop culture classic, The Wonderful Wizard of Oz. Dorothy, her Terrier Toto, and an eclectic trio of sidekicks travel from Munchkinland to Emerald City in search of enlightenment. Their journey of self-discovery is along the Yellow Brick Road, dubbed that because of the debate in the 1890s around international monetary policy, with the traveled route representing the “gold standard.”

Tax simplification is a politicized and polarizing topic. Politicians endlessly talk
about doing it, but don’t. The IRS doesn’t talk about doing it, but can. This article examines the principles of plain language, the gold standard for all written communications, and how their application can transform the quality of the massive amount of murky information that flows from the IRS to the public.

Plain Language is all about providing understandable communications. By
providing American taxpayers with communications that allow them to better
understand their tax reporting responsibilities, the IRS can close in on its crowning mission–maximum tax compliance. For every 1 percent increase in tax compliance levels, federal tax revenues increase $20 billion.

The title of this Viewpoint, “PlainTaxTalk”, translates into this short progressive equation:

Plain Language > Tax Simplification  > Tax Compliance > Tax Revenues

The author challenges the IRS to self-discover plain language and chart a course down a new road to clarity and precision, taking with it millions of enlightened American taxpayers.