TightWind is written by Kyle Baxter. Stay Hungry. Stay Foolish.

The IRS is complaining that it’s too easy for companies to hide things in their tax returns, because the filings are so long and complex:

In such length and complexity, opportunities lurk for any company that is willing to take aggressive tax positions. They might be virtually sure to lose if the Internal Revenue Service understood how something on Page 1,235 had interacted with something on Page 2,947 and challenged the result, but there is at least a reasonable chance the I.R.S. auditor would not figure it out.

“Today,” complained the I.R.S. commissioner, Douglas H. Shulman, in a recent speech, “we spend up to 25 percent of our time in a large corporate audit searching for issues rather than having a straightforward discussion with the taxpayer about the issues.”

So there’s an easy solution, right? Just eliminate the web of deductions, exclusions, exemptions, exceptions, and exceptions to the exceptions, so tax filings are easy for companies to compose and for the IRS to review. Easy.

Well, that’s not what the IRS is seeking:

To save that time, and to learn about things that are being missed, the I.R.S. is trying to require companies to give the agency a road map not only of the games that are being played, but of the maximum possible tax hit that companies would take if the I.R.S. chose to challenge them.

So, rather than solve this problem by making the system simpler, the IRS is seeking more power, and more filings from companies.

Perfect example of the problem of giving even an inch to government. They’ll use that inch to gain as much more as they can, and they’ll never let up.