IRS Commissioner Doug Shulman wants to modernize how our tax returns are prepared. Shulman told NPR's Morning Edition that Americans file their income taxes much like they did half a century ago. First, they file returns and the IRS checks the paperwork about six months later. People who get audited don't find out for another 18 months. Shulman would like the IRS to get financial information from banks first and then compare that to tax return information filed by Americans:
Shulman says the U.S. government has successfully persuaded tax scofflaws who've hidden their money in foreign banks to come forward. The Swiss government also turned over some 4,000 names of offenders who'd secreted money there. Shulman says in exchange for heavy fines, tax evaders don't face jail terms; he adds the multi-year effort has recovered hundreds of millions of dollars and predicts the agency will eventually recoup billions of concealed dollars.
The commissioner adds American tax law is riddled with loopholes - he says everyone agrees tax law should get simpler, and fair to everyone. Shulman says tax law changes are hard because 'it's real money.' There are always winners and losers when there are changes.