As the Monday, April 15, tax-filing deadline mercilessly approaches, millions of Americans will cry as they calculate what they owe Washington and then fork it over. But amid those tears there will be plenty of laughs. The U.S. tax code is so tangled and twisted that University of Florida law professor Steven Willis speaks amusingly about “tax humor.” While not exactly the stuff of stand-up routines, America’s surreal tax code is a masterpiece of dark comedy.
When Florida started its graduate tax program in the College of Law, Willis recalls: “One requirement of the graduate school was knowledge of a foreign language. Well, that just wasn’t going to work. Then, the faculty showed the graduate school the Internal Revenue Code, and they said that would do.”
Willis points to section 467(e)(1), which concerns pre-paid rent. It reads:
“The term ‘constant rental amount’ means, with respect to any section 467 rental agreement, the amount which, if paid as of the close of each lease period under the agreement, would result in an aggregate present value equal to the present value of the aggregate payments required under the agreement.”
“I love the sentence because of the poetry,” Willis says. “I always have a student read it aloud and watch the faces.”
Also lovely is section 509(a), which defines private foundations:
“For purposes of paragraph (3), an organization described in paragraph (2) shall be deemed to include an organization described in section 501(c)(4), (5), or (6) which would be described in paragraph (2) if it were an organization described in section 501(c)(3).”
The tax code’s treatment of gambling is a hall of mirrors. IRS Form 730 covers “excise taxes for both legal and illegal wagers of certain types. For state-authorized wagers placed with bookmakers and lottery operators, there is a tax of 0.25 percent of the wager, if it is legal. If the wager is not legal, the tax is 2 percent of the wager.”
So, one must pay legal federal taxes on gambling revenues obtained illegally under state law.
The tax code defines contest thusly: “A contest is any competition involving speed, skill, endurance, popularity, politics, strength or appearance, such as elections, the outcome of nominating conventions, dance marathons, log-rolling contests, wood-chopping contests, weightlifting contests, beauty contests and spelling bees.”
Log rolling? Wood chopping? This gets deep into Monty Python territory. They’re lumberjacks, and they’re OK!
The tax code is a museum of run-on sentences. Just the first sentence of section 509(a) — on private foundations — contains one period, three semi-colons, six dashes, nine parentheticals and 25 commas. Professor Willis sees 327 words in that sentence. I find 373, using Microsoft Word’s word-count function. Perhaps it depends on what the meaning of the word “word” is. MS Word considers “170(b)(1)(A)” a word. I would call it something else — although that word fails me.
A 373-word sentence is a mere monosyllable compared to the totality of the U.S. tax code. The “CCH Standard Federal Tax Reporter” includes every page of the code, plus the swarm of regulations, decisions and other fine print that govern federal taxes. CCH estimates that the tax code spanned just 400 pages when Congress imposed the income tax in 1913. By 1984, as Ronald Reagan chopped rates and streamlined the tax thicket, it stretched to 26,300 pages. Today, the U.S. tax code runs 73,954 pages. That equals 57 copies of Vintage Classics’ 1,296-page edition of “War and Peace.” And the only thing more hilarious than Tolstoy’s saga is 57 copies of it, standing side by side.
Meanwhile, the Tax Foundation reports that Tax Freedom Day will fall on Thursday, April 18. That is five days later than last year. So, the biggest joke of all is that if you pay your taxes on April 15, you still must pay your taxes. You will owe Uncle Sam three more days of hard labor in 2013 before you start working for yourself.
Deroy Murdock is a columnist with the Scripps Howard News Service, a Fox News contributor and a media fellow with Stanford University’s Hoover Institution on War, Revolution and Peace.