Who better to write new tax rules than people who try to avoid taxes?

Saturday, March 10, 2007 at 04:51 PM

I really thought this might be a joke internet story, until I tracked down a NY Times and discovered this piece:

I.R.S. Letting Tax Lawyers Write Rules By DAVID CAY JOHNSTON The Internal Revenue Service is asking tax lawyers and accountants who create tax shelters and exploit loopholes to take the lead in writing some of its new tax rules.

The pilot project represents a further expansion of the increasingly common federal government practice of asking outsiders to do more of its work, prompting academics and other critics to complain that the government is going too far.

They worry that having private lawyers and accountants draft tax rules could allow them to subtly skew them in favor of their clients.

"It's not the fox guarding the hen house; it's the fox designing the hen house," said Paul C. Light, a professor of political science at New York University, who studies the federal work force.

Donald L. Korb, the I.R.S. general counsel, defended the plan, saying in an interview that he believed that the pilot project was "not changing this process one iota."

"We are still getting comments; we are still having hearings," he said, and I.R.S. lawyers will still review any new rules before they are final.

I love the idiotic "I.R.S. lawyers will still review any new rules before they are final." Yes, I'm sure they will make an effort to do that. But they will be reviewing complicated rules, each of which will affect multiple other rules, and they will be at one hell of a disadvantage in finding any potential disasters tucked away in this mass of barely readable stuff.

Which is a far cry from having the IRS guys write the original proposal, giving them a much firmer grip on what the rules intend to do, and letting the tax shelter guys poke around and criticize. And if you don't think that's a hell of a big difference, just wait until the tax lawyers have written a few new rules and see what the consequences are to the wealthier end of the American spectrum (not to mention the consequences to the public treasury).

But what the hell, this is Bushland Uber Alles, and business as usual, all in one. This is no worse than letting Securities firms write SEC rules, or having student loan companies write new student loan rules, or having energy companies write new energy and pollution rules, and so on. Which has been going on some time now.

And look at how well that has gone.

What's next, letting prosecutor's act as a jury in criminal trials?