After browsing the Treasury Inspector General for Tax Administration (TIGTA) audit of IRS letters and notices, perhaps Klingon would be easier for the average American taxpayer to understand. On October 14, 2014 TIGTA released its audit report (html press release) on how IRS is complying with the Plain Writing Act. In summary, the report says IRS is failing miserably. Half the IRS letters and two-thirds of the IRS notices were not clear or did not provide “sufficient information.” In my experience the IRS letters and notices are not only not clear but they also do not provide sufficient information. Perhaps the press release should have used “and” instead of “or.” Maybe IRS writing in Klingon is a better solution. At least then, most people would not expect to understand the IRS.
According to TIGTA, IRS sent almost 63 million letters and notices in fiscal year 2013. So if half to two-thirds of the letters and notices were confusing that means there are a lot of confused U.S. taxpayers. Confusion does not help IRS administer the tax laws fairly nor does it breed confidence in the fairness of the tax law or the competency of the IRS.
In my experience, some IRS written communications are very vague and short. Most are plenty long but not very helpful. Sadly, the same can be said for most state tax department letters and notices. I realize the government wants to cover every eventuality, but at some point clarity should trump completeness. I am looking at a seven page notice that essentially says: “Someone reported they paid you $XXXX.XX in income and you only reported $XX.XX, please explain.” Only it takes IRS seven pages to say that and then they scare the taxpayer by telling them how much more tax they owe if the other party is correct. This is the main reason I include an hour of time in my preparation to respond to such notices. Otherwise, the client may assume they owe what IRS says they owe and send it in to avoid having to also pay me to explain the notice. Unfortunately, IRS notices and letters are quite often wrong or partly wrong.
What can taxpayers learn from this report? If the taxpayer does not understand the notice, contact their tax preparer or the appropriate government agency and pursue the issue until they understand. You may still not be happy with the results but at least you will at least know whether or not you owe any additional tax.