Donald Rumsfeld Goes Tax Protester On IRS, But Should Aim At Congress

Apr 17 2014, 3:23am CDT | by

Donald Rumsfeld Goes Tax Protester On IRS, But Should Aim At Congress
Photo Credit: Forbes Business

Donald Rumsfeld was always direct. Now his signature bluntness is aimed at the IRS, although Congress arguably deserves his ire even more. In a letter to the IRS, he complains bitterly about our tax code. Its complexity is a “sad commentary on governance in our nation’s capital,” the former Defense Secretary says.

Although he and his wife both signed the returns as required under penalties of perjury, he gives a harsh confession:

The tax code is so complex and the forms so complicated,  that I know that I cannot have any confidence that I know what is being requested and therefore I cannot and do not know, and I suspect a great many Americans cannot know, whether or not their tax returns are accurate.”

Is Mr. Rumsfeld a tax protester? Not really, but even if you can call it that, he’s clearly right. Cleverly, he didn’t alter the penalties of perjury line on his Form 1040. He also didn’t write something under this signature like “without recourse” or “unlawful.” His who’s on first letter to the IRS was separate, just complaining that the tax code is so complex that neither he nor his wife know if it is right.

A line of case law considers whether altered tax returns are actually “returns” for purposes of filing deadlines, the statute of limitations, and more. In that sense, Mr. Rumsfeld remains cagey. He stopped short of saying he didn’t even look through the return after the accountants prepared it. Of course, he’s right that most people cannot hope to understand a complex return, or often even a simple one.

The last decade gave us the Timothy Geithner defense to tax return mistakes (“TurboTax made me do it!”). Then in the aftermath of the mortgage and foreclosure meltdown, officials at big financial institutions popularized robo-signing of loan or foreclosure documents. The parallel with tax returns is the robo-signer defense: “I didn’t read my tax return—I just signed it.”

Besides, most tax returns are not self-prepared. A majority of people have someone do their taxes. Most members of Congress don’t do their own. With over half our returns prepared by someone else, it is no wonder that many taxpayers assume their returns are written in an unintelligible runic script. Even lawmakers can’t do their own.

We are supposed to read and understand the return, and we must sign under penalties of perjury. We should review it before signing and alert the return preparer to any mistakes we discover. But how often does this happen?

The situation seems worse today than ever before, because of the vast and unending complexity of our moribund tax system. Electronic filing doesn’t help. Consider the simple mechanics. There is a marked contrast between the mechanics of paper vs. electronic filing. With a traditional paper filing, at least the taxpayer signed the return before mailing. That imports a certain amount of due diligence.

Sure, they could sign without reading. But with e-filing, the client may not even see the return. The client should review the return, and the return preparer should ask the client to verify that all figures are correct, the correct boxes are checked, and so on.

But even a signature  in the traditional sense may be lacking. Instead of physically signing the return, electronic filing is, well, electronic. The taxpayer and the preparer enter numbers. Before filing, the taxpayer signs a signature authorization form (Form 8879) saying the taxpayer has reviewed the electronic return, it is accurate, etc. In the old days, at least the return had to be printed out and the taxpayer had to sign.

Is the IRS responsible for part of the complexity? Sure. But the tax code is Congress’ baby. Perhaps it deserves to be thrown out to make room for a brand new one.

You can reach me at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Japanese government concerned by yen's rapid fall against dollar
Tokyo, Nov 21 (IANS/EFE) Japanese Finance Minister Taro Aso Friday expressed concern over the sharp depreciation of the yen against the dollar this week, and said abrupt movements in the foreign exchange market were not beneficial to the Japanese economy.
 
 
WHO declares DRC Ebola-free
Geneva, Nov 21 (IANS) The World Health Organisation (WHO) Friday declared the end of the Ebola outbreak in the Democratic Republic of Congo (DRC).
 
 
Ultra rich population getting richer: Study
Washington, Nov 21 (IANS) Only 0.004 percent of the world's high networth adult population controls almost 13 percent of the world's total wealth, according to a new study.
 
 
Morocco, US organisation sign MoU on 'Enterprise City' project
Marrakech, Nov 21 (IANS) The Moroccan government and US institution Babson Global have signed a memorandum of understanding to conduct a feasibility study for the establishment of an "Enterprise City", a city dedicated to business, in the North African country.
 
 
 

Latest from the Network

Chinese court upholds life sentence against Uyghur activist
Beijing, Nov 21 (IANS/EFE) A court in western China has upheld the conviction and life sentence handed down against Uyghur activist Ilham Tohti, who appealed the sentence when it was first passed in September, one of...
Read more on Politics Balla
 
Matt Smith to star in Patient Zero
Matt Smith has been cast in 'Patient Zero'. The former 'Doctor Who' star has signed on to appear in the infection film which will see him have to cope with the aftermath of a worldwide viral pandemic across the Earth....
Read more on Movie Balla
 
Mick Jagger praises 'amazing' Chadwick Boseman
Sir Mick Jagger claims Chadwick Boseman is ''amazing'' as James Brown in the singer's biopic 'Get On Up'. The 71-year-old Rolling Stones rocker co-produced the movie and praised the young actor for his portrayal of the...
Read more on Movie Balla
 
South African president calls for end to racism in sports
Johannesburg, Nov 21 (IANS) South African President Jacob Zuma Friday called for global efforts to end racism in sports. South Africa adds its voice to the billions of others throughout the world who are determined to...
Read more on Sport Balla
 
Sheamus wants reality show for WWE Superstars
Sheamus wants to appear in a reality TV show about the WWE Superstars. The 36-year-old star believes the success of E! series 'Total Divas', which follows the lives of the female competitors in the company, has shown...
Read more on Celebrity Balla
 
Bill Murray: Actors are heroes
Bill Murray thinks actors are heroes. The 'Ghostbusters' star - who recently had an entire day dedicated to him at Toronto Film Festival - claims people admire actors so much because they get to escape reality by...
Read more on Celebrity Balla
 
Robin Williams' son: We're doing OK
Robin Williams' son says the late star's family are still adapting ''to the new normal'' following his father's death. The Hollywood actor died from asphyxia due to hanging at his home in August aged 63 and his eldest...
Read more on Celebrity Balla
 
Jennifer Lopez exfoliates with diamonds
Jennifer Lopez exfoliates her legs with diamonds. The 'On the Floor' hitmaker reportedly swears by a $250 Australian-made body scrub that is made with ''diamond powder'' to keep cellulite at bay. A source close to the...
Read more on Celebrity Balla
 
Indian golfers Atwal, Rashid tied 15th in Manila Masters
Manila, Nov 21 (IANS) Indian golfers Arjun Atwal and Rashid Khan shared the 15th position after the second round of the $1 million Manila Masters at the par-72 Manila Southwoods Golf and Country Club here Friday....
Read more on Sport Balla
 
Sarjubala, Saweety enter women's World boxing semis
Jeju (South Korea), Nov 21 (IANS) Indian boxers Shamjetsabam Sarjubala and Saweety reached the semi-finals of the Women's World Championships here Friday. Sarjubala started the proceedings with a dominating 3:0 win...
Read more on Sport Balla