Who can you trust?

The world is a scary place, and Congress makes it even scarier for taxpayers with the insanity called the tax code.

And of course, there is much more to life than tax. (Many are likely shocked to hear me say it.) To function with so much variety in life, our modern economy relies on specialization of labor, so that different people become educated and trained in different things, and we trade.

Each day, we decide what to trade for. Perhaps the most important decisions we make are related to choosing service providers: doctors, dentists, lawyers, accountants, and so forth. These can also be the most challenging decisions because human beings are much more variable and unpredictable than a simple widget.

When you choose a service provider, you do your best to find the right person, and hope you choose wisely.

The more time I spend in our profession, the more I come to realize that clients are looking for someone to trust. That's why referrals are usually the most successful way to generate new business. Stacie Clifford Kitts has a good post on the topic of referrals.

Of course, the biggest hurdle most people face is that they cannot afford the best service providers. And some people who can afford them are just too cheap. And so, for everything from medicine to tax, people turn to the Internet.

Robert Flach provides and interesting discussion on the issue of tax advice online in his post: Who can you believe? Jim Maule also provides a great discussion in Tax Illiteracy as a Threat.

Alas, I do not have the answer for how to ensure people get access to credible tax information. Robert provides some good tips for people to use in evaluating whether a person espousing tax advice is trustworthy. If I didn't need to earn a living by charging for the value of my services, I could spend all of my time combating tax illiteracy. Instead, I'll need to settle for doing what I can to educate in my own communities while working around "my day job."

I do hope that people can start to do a better job of simply using good judgment. It's amazing how much trouble can be avoided by making good decisions.

In a barely related note, often when I think about choosing wisely or poorly, I remember the line at the end of this gruesome scene from Indiana Jones and the Last Crusade. "He chose poorly." Gotta love the understatement.

Do something

Several years ago, Congress passed a law that completely eliminated the estate tax starting January 1, 2010. I remember thinking: "Oh, but that will never happen. Congress will act way before then."

So young. So naive.

Regarding this and many areas of tax law, I just want to shout: "Do something!" In the words of Seth Godin:

Make a decision. It doesn't have to be a wise decision or a perfect one. Just make one. In fact, make several. Make more decisions could be your three word mantra. No decision is a decision as well, the decision not to decide. Not deciding is usually the wrong decision. If you are the go-to person, the one who can decide, you'll make more of a difference. It doesn't matter so much that you're right, it matters that you decided. Of course it's risky and painful. That's why it's a rare and valuable skill.

Sadly, it appears Congress is not made up of people with this rare and valuable skill. And it doesn't look like the current administration is in a big rush either. Kay Bell recently wrote about Treasury Secretary Timothy Geithner's comments at an economic conference last week in New York City:

Asked about the prospects for tax reform, Sheppard reports that Geithner dodged the question and indicated that it would be far down the line. Economic growth and public confidence about the economy's future take precedence, he said, followed by deficit reduction, which would require tough political choices.

With those items before it on the policy to-do list, it's probably safe to say that Obama's stab at tax reform is going to suffer the same sad fate as did Dubya's tax revamp effort.

We've got our work cut out for us. Still, I like to think that if we keep telling Congress to "Do something", we just might get somewhere... someday.

I got the part!

I finally got the part I've always wanted. Peter Pappas has cast me as Glinda "the good witch" in Professionalism: A Love Story. As I commented on his blog -- if I seem as nice as Glinda, then I must have an incredible hidden talent for public relations.

There has been much debate in the tax blogosphere about the issues of professionalism, rules of conduct, and so forth. Spineless though it may seem, I am opting to abstain from this discussion, primarily due to my inability to articulate coherent thoughts on the matter.

In general, my writing has been sadly lacking of late, due to an unexplained lack of ideas. Yesterday, I commented on this writer's block to my husband, and added: "I figure quality over quantity, so I'll wait until inspiration strikes."

I guess I can't keep my mouth shut, even if I'm lacking inspiration. These days, the issue of tax reform remains on my mind. On my "to do" list is to read ideas on simplification from top blogger Robert Flach, along with the AICPA's Tax Reform Alternatives.

Have you been reading any other good simplification ideas lately?

Principles vs. rules

I finally finished my CPE course on IFRS, which wasn't nearly as painful as one might expect. As Joe Kristan put it: "We're tax! We don't need no stinkin' AA!" (For those new to public accounting, "AA" refers to Accounting & Auditing.)

As a tax practitioner, I could opt to renew my license under the non-attestation category. I take the AA courses because I want to keep the "full fledged" license as long as I can. I keep wrestling up 24 AA education hours every two years, since I figure the hard part's over, which was getting the field work hours for initial licensure.

Based on my limited AA education, I understand that IFRS is a principles-based framework, compared to the rules-based U.S. GAAP. This is an interesting experiment in human behavior, and I look forward to seeing how it unfolds. Can a system based on trust in people to use sound judgment and act ethically be successful? I hope so, though I admit to some skepticism.

I've said before that we cannot regulate human behavior, and so should not over-regulate society; and at the same time we still must have some semblance of law and order. The challenge, of course lies in finding where to land on the spectrum between trusting everyone do just do what's right and forcing them to.

Will we start to see a corresponding move in tax policy toward a system of principles rather than rules? I doubt it. And although I do like Joe Kristan's suggestion to simply pass a "happy fun times tax credit" for everything to be wonderful, I'm thinking the path to getting people to behave morally may be a little harder than that.

But maybe I'm just being difficult.

Online PhDs... are they credible?

My insatiable thirst for knowledge has got me thinking about pursuing a PhD in Accounting. This may just be a pipe dream, or may be something I tackle 20 years from now, but it sure is fun to think about.

What do people think about online PhD programs? Are they looked down on? Or have they gained credibility over the years? One college, Walden University, claims to be the most reputable online university. Are they just blowing smoke, or is there some truth to that?

I know, I'm rambling. But if anyone has any thoughts on the whole online PhD thing, please send them my way!

Broken record

There's lots of buzz these days about increased regulation of tax preparers, including recent posts from Joe Kristan, Peter Pappas, and Robert Flach.

My two cents on the matter of regulation is in an earlier post. I know I sound like a broken record, but I just keep coming back to what I believe to be the real problem: complexity.

As Mary O'Keefe says, "We need a tax code PEOPLE can understand."

The reason we haven't had significant reform is that people are not shouting for it. As Annette Nellen wrote, "one big roadblock (among many) is that the public is not crying out for simplification."

Why?

Because, as Mary O'Keefe puts it, "Americans are busy with their day to day lives. It's hard to get their attention on important long-term problems."

I hope the new movie "An Inconvenient Tax" will get the public's attention. Down the road, I'll be contacting the AICPA and the NATP to find out what they are doing on the issue. As I ponder ideas for a group of Tax Professionals for Simplification, I am inclined to think the group would need to agree on a plan for simplification. This, of course, presents a real challenge, but one I like to think we could overcome.

To all the tax gurus out there, what plan would you like to see tax professionals support?

21st Century Taxation

I just discovered the 21st Century Taxation blog and related site about federal and California state tax reform. The site is the work of Annette Nellen, professor at San Jose State University.

She provides a great list of resources on tax reform, including the reports from President Bush's Advisory Panel.

Once I get to reading this, maybe there's a chance one will seem like real reform, and not just a band-aid. I will happily send that on to the White House for consideration!

What topics are you writing the White House about?

How does that work?

As many tax bloggers have noted, the White House has requested ideas for the President's Economic Recovery Advisory Board to develop options for tax reform.

The blog includes this note:

The mandate to the PERAB is NOT to recommend a new tax system. They are to consider ideas on tax simplification, better enforcement of tax law, and reforming corporate taxes and to present the pros and cons of potential tax options... So be mindful of their constraints when submitting ideas.

I struggle to understand how we can get real tax simplification without recommending a new tax system. Maybe it's that my interpretation of the words "simplification" and "tax system" are not consistent with the government's. Because the way I see it, we can't get simplification without seriously revamping the system.

As often happens, I find myself comparing this situation to medicine (which just might have something to do with being married to a doctor). If we only change a code section here, or a regulation there, we're just treating symptoms and not the disease.

Just like when we keep adding new credits and deductions, we keep trying to cure our economic ailments with more and more medication. And from the stories I hear, more medication is not always the best answer! It often makes things worse.

In this stupor of mine, I cannot think of a recommendation to give the White House that would feel like anything more than treating a minor symptom of a dreadful disease. How depressing.

An Inconvenient Tax

Recently, I posted about my concerns that those seeking tax simplification were not effectively represented in Washington.

I thought about starting Tax Professionals for Simplification, which may still become a project -- but I think this upcoming movie is going to be much more effective than any such organization led by me.

I can't wait to see it!

An Inconvenient Tax - Official Trailer from Life Is My Movie Entertainment on Vimeo.

Hat tip to Taxgirl for the clip, who I hear just may be in the film!

Slacker

I'm a blogging slacker. I hesitate to post when I haven't kept up on all the other blogging out there, which is really hard to do. You diligent tax bloggers are amazing.

I'm still at 1000+ unread items in Google Reader, so I won't be caught up any time soon. These cursed 9/15 and 10/15 deadlines are such a nuisance.

As the days tick by, I imagine myself being summarily dropped from the list of tax bloggers anyone cares to follow. I'd like to be part of the cool tax crowd, but may not yet have what it takes. Perhaps when this house gets sold and my kids are out of diapers, I'll have a shot.

Today I figured I'd mention a few posts that have caught my eye:

• Paul Caron reports that Tax Analysts presented President Obama's task force with 32 essays from top tax minds on tax reform. I admit I'm eagerly awaiting the task force's recommendations in December.
  
  
• A great new blog, Bed Buffaloes in your tax code, discusses Tax software and barriers to entry: are tax pros more like physicians or more like hair braiders? I'm always comparing my profession as a CPA to that of a physician, but maybe I'm wrong!


• I'm with The Wandering Tax Pro when it comes to TV, as he posts in "If I Had my Druthers."


• Yet another Obama nominee with tax trouble... seriously? Paul Caron posts "Home Office Deduction Trips Up Treasury Department Nominee."
  


• And a quick thank you to The Wandering Tax Pro for mentioning a recent post on my companion blog, Confessions of a CPA.

I look forward to scanning several hundred more posts over the next couple weeks, and just maybe I'll manage to come up with an original post of my own. (I can hope, anyway.)