Letter from Donald Rumsfeld

[Lambkin]

http://www.forbes.com/sites/robertwood/ ... -congress/

Donald Rumsfeld was always direct. Now his signature bluntness is aimed at the IRS, although Congress arguably deserves his ire even more. In a letter to the IRS, he complains bitterly about our tax code. Its complexity is a “sad commentary on governance in our nation’s capital,” the former Defense Secretary says.

Although he and his wife both signed the returns as required under penalties of perjury, he gives a harsh confession:

The tax code is so complex and the forms so complicated, that I know that I cannot have any confidence that I know what is being requested and therefore I cannot and do not know, and I suspect a great many Americans cannot know, whether or not their tax returns are accurate.

[notorial dissent]

So let me get this straight, Rumsfeld is claiming that he does his own taxes? I personally find that very hard to believe, considering what his net worth has to be, and what I am certain is the complicated nature of his holdings by this time in his life. He almost certainly has his taxes done by a professional firm who darn well better know whether the returns are correct and accurate. So you'll pardon me if I really don't feel the love here. I agree for the most part with his sentiment, but don't believe him for a second.

[operabuff]

You would think that he'd also be aware that he's complaining to the wrong people. Congress creates the complexity in the tax code. To the extent that the executive branch is involved, it's the Office of Tax Policy at the Treasury Department, not the IRS.

[AndyK]

Along that line, it's strange that, every April 15, protestors swarm around the IRS Headquarters building instead of taking their complaints to the congress critters.

They seem to think that the IRS is responsible for all the tax laws, instead of being primarily a processing and collection agency of the Executive Branch.

[Famspear]

Along that line, it's strange that, every April 15, protestors swarm around the IRS Headquarters building instead of taking their complaints to the congress critters.

They seem to think that the IRS is responsible for all the tax laws, instead of being primarily a processing and collection agency of the Executive Branch.

Some members of the news media make this worse, sometimes, by carelessly characterizing such and such a tax rule as "the IRS won't let you do this" or "the IRS allows that."

So many Americans are ignorant of how our system works.

I was listening to a rant on the radio the other day against Eric Holder, the Attorney General of the United States. I forget who was doing the ranting. One of the brilliant concepts that I heard was that the Attorney General somehow controls all the judges in the United States (apparently the speaker confused the Justice Department, headed by Holder, with the judicial branch (or, as Chief Justice John Marshall put it in Marbury v. Madison, the "judicial department") of the government.

Another concept that I find to be misunderstood by an astonishing number of people is the Fifth Amendment privilege against being compelled to be a witness against oneself. Many, many people really do seem to believe the phony concept that asserting the Fifth Amendment privilege somehow means that the individual is guilty of a crime, or that the individual believes he is guilty of a crime. "Why else would he claim the Fifth?" -- I see that all the time.

[Famspear]

The tax code is so complex and the forms so complicated, that I know that I cannot have any confidence that I know what is being requested and therefore I cannot and do not know, and I suspect a great many Americans cannot know, whether or not their tax returns are accurate.

This is the man who oversaw the most powerful, complicated war machine in the History Of The Universe up to the time he served as Secretary of Defense. This was the force that included (and still includes) Boeing B-52 bombers armed with nuclear weapons, intercontinental ballistic missiles capable of carrying nuclear weapons half way around the planet, and Ohio-class Trident nuclear submarines with nuclear-tipped missiles that could hit a target in the Middle East from beneath the Pacific Ocean......

.....but because of the complexity of the U.S. tax laws, he has no confidence that he knows what is being requested in the U.S. federal income tax forms and related instructions?

[rogfulton]

The tax code is so complex and the forms so complicated, that I know that I cannot have any confidence that I know what is being requested and therefore I cannot and do not know, and I suspect a great many Americans cannot know, whether or not their tax returns are accurate.

This is the man who oversaw the most powerful, complicated war machine in the History Of The Universe up to the time he served as Secretary of Defense. This was the force that included (and still includes) Boeing B-52 bombers armed with nuclear weapons, intercontinental ballistic missiles capable of carrying nuclear weapons half way around the planet, and Ohio-class Trident nuclear submarines with nuclear-tipped missiles that could hit a target in the Middle East from beneath the Pacific Ocean......

.....but because of the complexity of the U.S. tax laws, he has no confidence that he knows what is being requested in the U.S. federal income tax forms and related instructions?

All the more reason to know that he and his wife do not prepare their own returns.

[The Observer]

The tax code is so complex and the forms so complicated, that I know that I cannot have any confidence that I know what is being requested and therefore I cannot and do not know, and I suspect a great many Americans cannot know, whether or not their tax returns are accurate.

This is the man who oversaw the most powerful, complicated war machine in the History Of The Universe up to the time he served as Secretary of Defense. This was the force that included (and still includes) Boeing B-52 bombers armed with nuclear weapons, intercontinental ballistic missiles capable of carrying nuclear weapons half way around the planet, and Ohio-class Trident nuclear submarines with nuclear-tipped missiles that could hit a target in the Middle East from beneath the Pacific Ocean......

.....but because of the complexity of the U.S. tax laws, he has no confidence that he knows what is being requested in the U.S. federal income tax forms and related instructions?

I suspect that Mr. Rumsfeld, who also spent time in the private sector, has a sizeable financial portfolio that would require some expertise in taking advantage of the various tax laws to minimize the tax that he owes. If so, I would offer that anyone with that kind of tax strategy would be a fool to attempt to prepare the return and schedules themselves, and still have confidence that it was done correctly. From what I understand, Rumsfeld has a degree in political science and some time in law school, none of which I would expect would make him an expert at preparing complex returns (and the accounting necessary to support the information on the returns). He should be familiar enough with our government to know that it is Congress is that responsible for the complexity of the laws and that is a fair and accurate criticism. But to expect him to have complete knowledge and faith in the information that what is being put on the forms is accurate based on his own knowledge and experience is unfair, whether he prepares the return himself or another does it for him.

The POTUS and First Lady for the last several decades release a copy of their filed tax return every year as a matter of course and ethics. Do you suppose that they are preparing those returns themselves? Or are they relying on experts to prepare those returns and place their trust in that preparation? Should we criticize the President for not understanding the tax laws enough?

[Famspear]

....to expect him [Donald Rumsfeld] to have complete knowledge and faith in the information that what is being put on the forms is accurate based on his own knowledge and experience is unfair, whether he prepares the return himself or another does it for him.

Agreed. Rumsfeld might of course be over-stating his case a bit. He is saying that he "cannot have any confidence" that he knows "what is being requested" (emphasis added). But, that's the way he says he feels, so it's hard to argue with him on that.

If Rumsfeld is using a professional, he certainly should ask his professional to explain any points about what exactly is required for Rumsfeld's tax return -- or the law relevant to that return -- about which he has a significant lack of confidence. And, his professional should be able to explain many of those points in a way that a non-expert in tax can understand.

I say "many" points, however, because there are definitely areas of U.S. federal income tax law that are too complex to be meaningfully summarized -- with brevity -- in a way that the average person can understand. Mr. Rumsfeld's personal Form 1040 might indeed implicate one or more of those areas.

Whether he actually said it or not, Einstein is quoted as having said something like "The hardest thing in the world to understand is the income tax."

[Randall]

When Rumsfeld speaks of unknown unknowns he is speaking of the tax code?
Well that clears that up.

[Lambkin]

No I think it falls into the category of known unknowns.

[rogfulton]

No I think it falls into the category of known unknowns.

I would think it would be an unknown known. He knows it has to be done but doesn't know how?

[Pantherphil]

As a young lawyer, I regularly attended the Federal Tax Institute annual meeting in Boston at the John Hancock Hall. The proceedings were supervised by Dean Ervin "Grumpy" Griswold, former Dean and Tax Professor at the Harvard Law School (where he was renowned for flinging chalkboard erasers at laggard students), tax text book author, former counsel to the House Ways and Means Committee, former Solicitor General of the United States, and at that time senior counsel to Jones, Day and Reavis in Chicago. The format of the Federal Tax Institute involved eminent speakers from the private sector and from the IRS and Treasury updating all of us ham n' eggers out in the trenches on new developments. It was the time when numerous Cabinet nominees and Supreme Court justice nominees were foundering on the rocks of employing undocumented aliens and failing to properly pay and withhold taxes from their nannies and other household employees, and it had just been announced that a new Schedule H would be required to be filed on account of household employees. Dean Griswold had employed a health care aide for his ailing wife and found the preparation of the new Schedule to be the straw that broke the camel's back. He hiked himself slowly out of his chair, banged his green baize covered table, pointed a bony finger, and reamed out the IRS presenter, complaining loudly that the Congress and the IRS had made the law so complicated that not even he, himself, could prepare his own return and for the first time he had felt it necessary to employ a paid preparer. Which should be cause for concern when one of the most knowledgeable tax lawyers in the country could no longer feel confident of his ability to accurately prepare a 1040.

[operabuff]

Which should be cause for concern when one of the most knowledgeable tax lawyers in the country could no longer feel confident of his ability to accurately prepare a 1040.

Which is an absurd story. Schedule H is not particularly complex. It may have been the straw that broke the camel's back in terms of making it more trouble to fill out the return than to pay someone to do it, but it shouldn't have been beyond his competence.

I also think that you can be an excellent tax lawyer without having any particular aptitude for return preparation.

[Famspear]

Which is an absurd story. Schedule H is not particularly complex. It may have been the straw that broke the camel's back in terms of making it more trouble to fill out the return than to pay someone to do it, but it shouldn't have been beyond his competence.....

Agreed. Schedule H is not even close to being a complicated form. Griswold must have had other issues going -- maybe his concern for his ailing wife, for example -- that caused his reaction.