Collapsing Under the Weight of Incompetence

The IRS, like Spandex, Can Only Take So Much Before It Falls to Pieces

There is a classic scene in the movie Real Genius, where students over time begin leaving their tape recorders in the classroom to record the professor's lecture only to reach the final scene of the movie where the professor leaves a tape recording of his lecture to play to all the students’ tape recorders. That is what is occurring between the IRS and our individual CPAs. Neither could exist without a bank of supercomputers crunching out data by interpreting 2000 pages of tax code into nearly incomprehensible tax forms. When I asked my CPA how he manages to compile the nearly two feet worth of paperwork and takes to file all our corporate taxes and partnership documents, he simply looked at me and said we couldn't do it without the computers. The IRS is in the same boat, they couldn't manage it without the computers either. However, every system has its breaking point. Every system can collapse under the weight of its own incompetence.

According to the Washington Post, Here over 21 million paper tax returns from 2021 have not been processed. Jeff Stein's, June 22nd article reports, "National Taxpayer Advocate Erin Collins said in her report that the IRS backlog this year is 21.3 million paper returns, 7 percent more than the 20 million that were awaiting processing at the same last year.” According to Stein, the backlog is due to three primary reasons, Congress tasked the IRS to manage Covid relief programs, staff shortage leading to 500,000 hour of overtime and Covid forcing agents to work from home. I am a bit baffled by the last one, as we are told time and again that WFH made employees far more productive than their in-office counterparts. Perhaps that super productivity still cannot overcome the incoherence bred into the US Tax Code.

To understand the nurturing of incompetence in our tax code, a little history is required. In 1913, Congress handed the most progressive president, Woodrow Wilson, the ratified Sixteenth Amendment and with it, the power to enslaved Americans by commanding a portion of their labor through an individual income tax. The Sixteenth Amendment gave our Federal Government the power to ununiformly and without the prior Constitutional required apportioning from the States by population, collect income tax from citizens. That travesty, 118 years ago, kicked off the world's greatest lobbying ventures and turned the US Capital into a giant social manipulation laboratory. In this fortified Sixteenth Amendment income tax award, members of Congress now don the white lab coats of social behaviorists instead of the old three-piece suits of a grifter.

No other government institution has created more fear and anxiety in her citizens than the IRS. Continually listed as one of the most stressful events, next to the death of a loved one, is an IRS audit. I have been paying Federal income taxes since I was 13 years old and have spent well over $40,000 on Certified Public Accounts (CPAs.) At no point have I ever done anything other than trying to comply with the bevy of rules written into the US tax code. However, those two facts alone cannot guarantee me, nor any other taxpayer who tries to comply with the US tax code, that they will not suffer an audit. The IRS's budget for fiscal year 2021 was 13.7 billion dollars. Hiring an additional 10,000 agents to attempt to tackle the backlog will cost $2 billion more. With the IRS nearing 100,000 employees, we now have a ratio of one IRS employee to 1,500 taxpayers. With workforce participation shrinking and the IRS tax fieldwork increasing, that ratio be sure to become smaller.

It is only a matter of time before the IRS collapses under its own weight. But that inevitably will not stop the IRS wheels from spinning. As the great orator, Ronald Reagan, once said, “No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!” So do not expect anyone in government to change the IRS status quo anytime soon. There is far too much at stake for the social manipulators and lobbyists to ever cede any ground regarding the power the IRS has over individual and corporate lives.

I used to think a flat tax was the answer. A flat tax, where every taxpaying citizen pays the same percent of their income would at least be fair and just treatment within the eyes of revenue collection. However, Congress would never pass such legislation. And, even if the Convention of the States folks got their way with a Constitutional amendment for a flat tax, it still doesn't solve the number one problem with our Federal Government, that being a government that derives power by monetary manipulation of its citizens.

The only true answer to limiting the Federal Government’s power to manipulate her citizen via the “carrot and stick” approach to taxation would be to repeal of the Sixteenth Amendment and return to States apportioning to the Federal Government, their collected revenues for the purpose of securing our national interests. Putting the power back into the States hands to levy taxes and remit, through apportioning, to Washington would provide US citizens a much freer society. Although States certainly can and do levy income taxes, giving U.S. citizens a choice of 50 States to reside puts pressure on the States to act in a fiduciary manor with that power lest they find themselves dictating over a declining population.

Is the repeal of the Sixteenth Amendment possible? Well, I never thought Roe v. Wade would be overturned in my lifetime. Perhaps, the hope of preserving our Republic is not dead yet. Until then, we are stuck in a self-perpetuating cycle of Congress selling tax code manipulation enhancements to the highest bidder, the IRS tasked to interpret and enforce the highjacked rules, and our CPAs purchasing ever more powerful software systems to comply with all the nonsense.

There are some who know that the purpose of the progressive income tax charade is to nudge society into State approved directions. They know that while most Americans toil away at jobs trying to secure a desired standard of living, the “taxman” hovers over the experiment, constantly moving the piece of cheese to test the limits of citizens’ compliance. The social scientists are ever watching and monitoring how far they can push before the masses respond. The response is not always pitchforks storming the citadels of government power. An equally undesirable response would be a citizenry that realizes that the game is rigged and simple stop playing altogether. Neither of these scenarios benefit our leaders.

Until my beloved country can see the right and make the long term and prudent decision to survive by limiting the Federal Government’s power, take a good look at the photo associated with this article. It is a reminder of the uselessness and futility of the US tax code and of the time, money and lost productivity wasted on Congress’s little social experiment and money laundering scheme. For all must reasonably conclude that the current tax system has zero benefits to those compelled to participate. If one sees a personal benefit from the US tax code, I offer you my congratulations. You are among our Nation’s most privileged. For the Federal Government has commanded, through penalty of fines and incarcerations, that your neighbor must labor on your behalf.