The Tax Division of the American Institute of Certified Public Accountants, the American Bar Association Section of Taxation, and Tax Executives Institute joined forces several years ago to advance a goal that each organization had promoted separately for decades – tax simplification. Over time the need for tax simplification has become more pressing and, in our collective judgment, the income tax system has now reached a critical juncture.

American taxpayers have lost not only the ability to understand and comply with the law without expending considerable resources, but also respect for a tax system that increasingly makes them victims of its unintended consequences and outdated or ill-conceived policies. This cannot help but reduce compliance, increase the cost and complexity of administering the tax system, and undermine the public’s general confidence in government. Simplification is not merely an ideal to be sought but never achieved; in our view, it is an economic, political, and even moral imperative.

The Bush Administration and Congress have an historic opportunity to reverse course – to move beyond paying lip service to tax simplification to making it a real part of each tax proposal that is enacted. Given the projected budget surplus, the growing consensus that major tax legislation will be enacted this year, and the Joint Committee on Taxation’s forthcoming staff report on tax simplification, we believe the time is right for simplification. We urge this Administration and Congress to seize every possible opportunity to promote tax simplification and to begin to repair the problems that have developed in the tax law. Our organizations stand ready to assist in this endeavor.

Enclosed is our joint statement outlining our top recommendations for simplifying the tax law, including recommendations regarding the alternative minimum tax, phase-outs for deductions and credits, and capital gains, along with more detailed suggestions for legislative change. The list of recommendations certainly is not exhaustive. Action in these areas will, however, significantly reduce complexity for individual and business taxpayers alike, will make the system more responsive to taxpayer needs, and will streamline and improve administration of the income tax, allowing some of the public and private sector resources currently devoted to tax matters to be redeployed.

We are directing this letter to you at this time because of your expressed interest in tax simplification. As the tax legislation moves forward this year, we also will be continuing our discussions with members of Congress and congressional committees interested in tax simplification and with your Office of Tax Policy. Please feel free to contact us if there are questions. Once again, we look forward to being of assistance in this process.

Sincerely,

Pamela J. Pecarich
Chair
American Institute of Certified Public Accountants
Tax Executive Committee

Richard M. Lipton
Chair
American Bar Association
Section of Taxation

Betty M. Wilson
President
Tax Executives Institute