Resolving the IRS and Developing a New Tax Reform Package - Research Paper Example

Resolving the IRS and Developing a New Tax Reform Package ID Resolving the IRS and Developing a New Tax Reform Package Background One of the most challenging aspects of any country’s governance is the ability to collect the taxes and allocate them correctly to ensure that they reach the goals of the government and the people receive the actual care, infrastructure, public services and the services that they deserve as a country. It is the role of the government to ensure that these objectives are attained and the country proves manageable. In the United States, the Internal Revenue Service (IRS) is charged with this role and serves to ensure that the services are reached to the public. The Commissioner of Internal Revenue that immediately supervises its affairs manages the service unit responsible for taxes in the United States federal government. The agency placed under the Department of Treasury deals with the collection of revenue for the treasury giving them the needed finances to run their activities. The IRS deals with the collection of taxes and the administration aspects of the Internal Revenue Code. Through the trust developed, it has proven successful (Kaplan, 2004). They base on to ensure that the administration of taxes and their collection from the masses is controlled and the targets remain achieved these on a regular basis. The collective responsibility of managing taxes and ensuring that public expenditure is sufficient makes is a huge responsibility that the IRS has seemed challenged to maintain. Of late, a number of challenges have arisen that have showed the weaknesses that the system has covered. These have occasioned the need for the development of new tax reforms package that will help improve the tax system and make a better effective means of managing taxes of the public. The details of this paper aim at discussing the new tax reforms that will aim at covering the failures of the IRS. These aimed at ensuring that the tax system and its management is efficient, economical and effective will provide better tax policies and theory. It is based on the theory that the failure of the IRS is occasioned by the wide coverage area that it has and the challenges that it experiences regularly in dealing with the effects that the high taxes have occasioned on the citizens. The new tax systems aimed at improving these and ensuring that all people are catered for by a tax system that respects and covers people of all occupations will provide better management and ease in tax administration The previous legislation Considering developing a new tax reform package will need an analysis of the current tax system. Understanding the IRS provides and understanding of the roots of the challenges that the tax organization faces hence making it easier to develop means of dealing with these challenges. The IRS was developed in the wake of the Civil War started in the earlier years that stemmed from the decision by President Lincoln and the existent Congress at the time that led to the creation of the commissioner of Internal Revenue Authority. Through this development, the income tax act was developed to handle all expenses that the country incurred while at war. The act repealed 10 years after inception, the income tax aspect was revived in 1894 after which the Supreme Court ruled it out on grounds that it was an unconstitutional. During the 16th Amendment, three-quarter of the majority of the different states saw it necessary to develop amendments on the constitution an opportunity though which Congress allowed the amendments to be made on the income tax act. The proceeding events allowed the growth of the tax system with the first after the amendment reflecting the first from 1040 that imposed a 1% tax on the different net incomes of persons earning above $3000 and a 6% in the incomes that range above $500000. From this time on, the tax aspect continued to prove vital in the provision of revenue for public expenditure. In 1918 at the World War I, the tax rose slowly to a rate over 77% that was aimed at financing the war and the effects associated with it. After the war, this rate reduced from 77% to 24% where it stayed for a period until the depression (IRS, November 2014). The World War II saw to the development of the payroll withholding tax payments advanced to the taxman each quarter. These indicated the developing need of the governments to develop better incentives that would attract more taxes to provide more public funding that would later support the government projects that proved consumptive in terms of finances. The need to keep the tax authority alive saw to the development of the system to cover a wider area and include professionals in its management to create a better dependable system that would provide a better approach to improving the tax aspects of the county. It is in these same years of the 50s that the name of the agency was changed to Internal Revenue Authority that was changed from Bureau of Internal Revenue. The new body has the commissioner and the chief counsel remain in the President’s jurisdiction that selects and provides the Senate with the people for approval. After this the IRS was reformed into an organized system that became modernized and embraced technology to create a better system that will serve the purpose better as of the IRS Restructuring and Reform Act of 1998. The organization was reorganized to match many of the world’s private organizations that have better management structures and efficient, economical and effective systems of achieving its goals. Through these, the IRS has developed to conduct itself better and have better support for the customers. The other employees to the system are selected through the merit system that conducts a selection through interviews that aim at providing the best talents to work with the commissioner in dealing with tax challenges. The problem Considering the needs that the systems encompassed then, the system served them better. The changing landscape of the U.S taxpayer is creating more difficulties in dealing with the challenges. Through these, a number of failures have occasioned in solving the problems created by the system and hence the need to develop a better system to manage the tax management aspect. The complex nature of the tax codes used has proved unfair to the taxpayers who work so hard and end up paying much f it to taxes (Saltzman, 1991). The tax system allows wastage of the taxes collected with poor control aspects. The tax system has created many loopholes for easy misuse of funds collected from the masses and has allowed unfair consideration of the payers that has occasioned the need for a new system that will encourage the taxpayers to freely participate in tax collection and the expenditure of it through the different tax agencies. These indicate the fraud aspects marred in the IRS that have the operations seem compromised. Three Step Solutions To solve the problems that the IRS is facing to make it a better agency, there is need to follow the following three steps. The simplification of the tax code and making it more fairer in its consideration of the taxpayers, elimination of interest handouts and lowering the tax rates and the making of the code to become more accountable in quest to control fraud aspects and corruption in the system. All these problems if solved through policy matters will help improve the system and make it more effective, efficient and economical in nature hence serving its objectives. In simplifying the tax code, the management of the tax system becomes easy with the different families in position to determine their own tax needs and what they need to remit to the taxpayer on a regular basis (The Tax Reform Act of 2014). The consideration of the cost of the IRS system, the unfair nature of the whole system and the complexity of the code one understands that the system is so difficult to understand and making other people find it difficult to interpret. The fact that taxpayer’s money is involved in fraud aspects and corruption aspects makes the payers demoralized making it unfair to charge them for taxes. Development of better policies that will aid in the protection of the tax money will enable them remain motivated to contribute. Following up on accountability matters will make the tax system more possible and will motivate the taxpayers. One of the major aspects that have not covered the taxpayers is accountability that has only aimed at covering gaps created by the handlers of taxpayer’s money the IRS. Solving of the problems there is need replace the IRS commissioner with a team of many members that will provide the necessary support for the roles necessary. These team members will have to exercise multidisciplinary approach for the management of affairs. Specialization of duties will enable the team to handle the roles properly. Each team member will have a responsibility that they will handle in the group serving the roles necessary in leading to the improvement of the services that the IRS offers through a new tax rate reform package. The control of access of the information of the taxpayer by the IRS is equivalent to violation of the privacy aspects of the client. Encouraging confidence in the members will lead to improvement of the perception over the tax aspects hence positive relation to the IRS. Control of confidential information of the clients also helps in dealing with fraud aspects that have left many customers complain of transactions they cannot remember verifying. Dealing with the aspect of motivation of the taxpayers will make the tax role easy for the IRS and this will encourage positive developments the country needs to manage their objectives. The aspect of transparency and development of a more objective approach will encourage the control of the taxes. The transparency aspect will contribute to the development of confidence in the public over the resource allocation aspect. In dealing with this aspect, the IRS needs to develop better policies and affect them through the development of other implementation policies. Through this transparency aspect, better scrutiny of employees and the different systems will enable the IRS have better employees and better systems that will enable it have better management aspects of collecting and managing the taxes collected from the taxpayers. The applicant’s management will also enable the development of a more experienced team that will better manage the whole taxation process and the management of the revenues collected. The management of the employees will also need to develop clear rules and regulations to strictly manage the conduct of each person in the team and make them aligned to the IRS principle. The rules need to prove clear and cover all information collection needs. Collection of information for the purposes of tax management will require understanding of the different tax needs and the situations of the taxpayers. The need to understand the different taxpayers and their spans in tax abilities will provide a better approach to the improvement of the tax system. Developing a better and transparent means of collecting information will also help the IRS grow steadily and the level of taxes collected will improve. The reduction of the responsibilities that the IRS serves will enable it focus on the roles it is originally meant to play. The removal of Affordable Care Act from the roles that the IRS plays will leave them with responsibilities that only realm in their docket giving them a full span and concentration in the tax roles that the institution was developed to handle. There is also need to strengthen the economy through the reduction of the rates. Reduction in tax rates will provide more confidence to workers and encourage them to corporate with the tax collector. Reduction of tax rates will also lead to better paychecks to the employees with more job opportunities presented to them making it possible for them to pay their taxes. This followed by a clear flat tax rate that allows the taxpayers a reasonable standard rate that they will personally handle remittance will provide them with confidence to positively embrace the tax system. New Idea The President as the leader of the country needs to remain in control of all activities and hence the need to check in on a regular basis to ensure all work is as required. Checking in will also involves solving all immediate aspects that may arise and ensuring the team employed is affective enough to yield the set objectives of the country. Limiting political involvement in the affairs of the IRS will ensure a faster process and hence a better faster way of resolving the issues that arise. For executive changes to occur in the IRS there is need to use the president’s constant check to ensure that the improvements continue and the work becomes better. Tax Reform Package The tax reform package is aimed at improving the tax management system of the IRS and through the reduction by 25%. The application of a Federal Income Tax rate cut will lead to lower rate that will have a standard deduction that will improve the tax response of the citizens. Reducing the number of taxpayers that will find this idea positive and improve their tax remittance levels will improve (Forbes, 2005). Reducing the itemizers will eliminate the loopholes and simplify the code making it fair for all parties. Reducing the taxes will also help improve the lives of people with improved disposable income. This will make the economy of the American people improve and hence encouraging the development of small businesses and the job creators will benefit from this tax package. My idea According to the reform proposed, the reforms will require the involvement of the president in the collection of data, the management of the IRS and the general management of the funds raised through taxation. The checking’s-in with the Commissioner will ensure that the commissioner serves their duties well. The consideration of the president in the management of affairs of the IRS will ensure limited political considerations in terms of reforms that will ensure that the IRS serves its mandate fully. Basing on these, the reduction of the rate and the development of a standard rate will provide the motivational aspect that the taxpayers will need to handle their tax affairs. Through this, there will develop the proper management of the IRS and simplicity of the code that it needs to operate validly. The reforms are developed and passed through the House Committee to the Senate committee and finally passed to the chamber for clearing any aspects that may have been missed by the different parties. The bill once signed by the president will then become law and will fully operate governing all tax operations. References Forbes, S. (2005). Flat Tax Revolution: using a Postcard to Abolish the IRS. Regnery Publishing. IRS, (November 2014). Brief History of the IRS. Retrieved from http://www.irs.gov/uac/Brief-History-of-IRS Kaplan, M. S. (2004). What the IRS does not want you to Know: A CPA Reveals the Tricks of the Trade. John Wiley & Sons. Saltzman, M. I. (1991). IRS Practice and Procedure. Warren, Gorhan & Lamont. The Tax Reform Act of 2014. Fixing Our Broken Tax Code So That It Works For American Families and Job Creators. House Ways and Means Committee. Retrieved from http://waysandmeans.house.gov/uploadedfiles/tax_reform_executive_summary.pdf Read More