The IRS Taxpayer advocate service came out with its annual report on the IRS and included a large section (very critical of the IRS) on FBARs, the 2009 VD program etc etc. Very scathing report, so hopefully it’ll have some impact
I have to admit that I am disappointed that the Tax Payer Advocate failed to state the obviously most workable policy, which is for the U.S. to stop taxing based on citizentry or long terme resident status. That solution is the simplest, the most just and relieves the IRS of having to divert its limited resources from higher value tax revenue sources.
As any parent can tell you, it is nice and desireable to have rules but it is only the parent who keeps in mind the fact that rules have to be enforced who will not make the mistake of making unnecessary and non productive rules. The IRS rules with regards to the taxation of citizens who are being taxed by their jurisdiction of residence is an example of a needlessly redundant law (pg. 28). All that work for no revenue. The only thing that the government could do to derieve more revenue from partner Tax Treaty countries would be to tear up the treaties and axe both the Foreign Income Exclusion and the Foreign Tax Credit. I have read one of Senator Tom Coburn’s speeches and he would like to do exactly this very thing.