In an interview with NPR's All Things Considered, Deborah Schenk, the Ronald and Marilynn Grossman Professor of Taxation and editor-in-chief of the Tax Law Review, said that besides common errors such as failing to sign returns, writing the wrong social security numbers, or forgetting postage, the complexity of the U.S. Tax Code leads many filers to make more serious mistakes.
For example, she said, people with two jobs file a separate return for each job. "A lot of people don’t understand what their marital status is," she added. "Marital status for state law purposes is quite different than marital status for tax purposes. Or they list dependents who aren’t dependents."
"I know it’s hard to believe, but I spent many years working in clinics and one of the most common mistakes we saw was that people did not know whether they were entitled to a dependency exemption," she said. "Say, for example, you separate from your wife and then you live with your girlfriend and she had children and an elderly mother who lives someplace else and also contributes. Which person is entitled to take a dependency exemption? It’s a really complex question, and most people just aren’t able to figure it out, and the result is, of course, that all three or four of them will take the dependent on the return."
When asked why the American tax system is so much more complicated than tax systems in other countries, Schenk replied that "we’re a very sophisticated, complex economy and that requires a very sophisticated tax system. And the other reason is attributable to incentives. Congress loves to provide incentives to the Tax Code. Any problem we want to solve, let’s use the Tax Code, and the result is that every year it gets more and more complex. For example, this year’s stimulus bill had more than 300 changes to the Internal Revenue Code, all designed to stimulate the economy, but it certainly mucked up the Code."