Washington (Aug. 5, 2002) -- The tax system will need to face the critical issues of tax complexity and tax compliance in the coming years, according to Pam Olson, deputy assistant secretary of the Treasury for tax policy.

In testimony before the Senate Finance Committee for her nomination to assistant secretary, Olson said the two issues are closely linked. "Emperor Joseph II once said of Mozart’s composition, it has 'too many notes, my dear Mozart.' A similar observation may be fairly made of our tax laws," she said. According to Olson, "complexity burdens the economy, hinders tax administration, leads to unintended results, feeds the proliferation of tax shelters, and weakens our self-assessment system."

Olson praised the restructuring of the IRS, noting that while painful even to the outside observer of the organization, the fruits of that change will be seen in the years ahead in the form of increased taxpayer service and better-focused compliance programs.

There is much to be done on the compliance front, Olson told the panel. "The belief that the tax laws bestow on certain taxpayers opportunities to minimize their taxes has a corrosive effect on our tax system. It leads taxpayers to question its fairness. The complexity in our tax laws and the many targeted provisions contribute to taxpayers’ concerns that somebody got something they didn’t but should have.

-- Electronic Accountant Newswire staff

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