Monday, April 17, 2006

Tax Law Writers Rely on Pros for Returns; Many Lawmakers in Charge of Writing Tax Laws Have Professionals Prepare Their Returns

ABC News
Tax Law Writers Rely on Pros for Returns
Many Lawmakers in Charge of Writing Tax Laws Have Professionals Prepare Their Returns
The Associated Press

WASHINGTON - When it comes to their own tax returns, many members of Congress who specialize in writing tax laws turn to professional preparers rather than completing the paperwork themselves.

"It's onerous and everybody knows it," said Rep. Richard Neal, D-Mass.

Three of the four top lawmakers on the Senate Finance and House Ways and Means committees, which are in charge of writing tax laws, pay a professional to file their annual tax returns with the Internal Revenue Service.

The exception is the Ways and Means chairman, Rep. Bill Thomas, R-Calif. The former college professor said he has prepared his own return "forever" and that he waits until close to the deadline to file. Monday is the filing deadline for most people.

"There's no reason for me to pay Uncle Sam pay, you heard that until I have to," he said.

How about one of the tax writers who could become chairman after Thomas retires at year's end?

"Absolutely not," said Rep. Jim McCrery, R-La. "I'm not an accountant. I'm a lawyer."

New York Rep. Charles Rangel, the top Democrat on the Ways and Means Committee, and Sens. Charles Grassley, R-Iowa, and Max Baucus, D-Mont., the Finance Committee chairman and ranking Democrat, all depend on professional tax preparers.

According to IRS statistics, that makes these members of Congress much like the public. More than 60 percent of taxpayers turn to a paid professional to prepare their returns. The number typically increases a little each year.

Some lawmakers have more complicated financial lives than the average taxpayer, making their returns more complicated. Some said they had a professional do the job to guarantee the return's accuracy.

David Keating, senior counselor at the National Taxpayers Union, said lawmakers should at least try to complete their own returns. Members of tax-writing committees should have to spend 20 hours working on their tax returns before giving up and handing the job to a professional, he suggested.

"If they're going to sit on a tax-writing committee, it certainly makes a lot of sense for them at least to attempt to do their own tax return," Keating said. "And when they scream out 'Torture!' to their tax preparer, at least they'd have a better view."

A few do dive in on their own.

Rep. Paul Ryan, R-Wis., said he does them "just so I can go through the process." Then he asks an accountant to check for mistakes.

Sen. Rick Santorum, R-Pa., usually prepares his own taxes using computer software. Sen. Mike Crapo, R-Idaho, does his tax return and his children's.

Rep. Kevin Brady's wife, a former banker, prepares the tax returns for the Texas Republican's family.

Rep. Jim Ramstad, R-Minn., does not do his own returns, but he agreed it might be a good idea to try. "I think it is important that we operate in the real world," he said.

These lawmakers have offered ideas to simplify the tax system, but none has gotten close to enactment.

Rep. John Linder, R-Ga., dislikes the tax system so much that he wants to scrap individual tax filing and the Internal Revenue Service. He would trade the income tax system for a consumption tax.

A less drastic change is advocated by Sen. Ron Wyden, D-Ore. He did not prepare his real tax returns, but he was able to prepare a hypothetical tax return in 30 minutes based on his proposed simplified tax system.

"This last fact is truly revolutionary because no one can remember the last time a member of the tax-writing Senate Finance Committee actually completed their own tax return," he said.

On the Net:

House Ways and Means Committee:

Senate Finance Committee: