Tax complexity: Problem or opportunity?

When laws are complex ol ambiguous, compliance and enforcement suffer In th e United States, the federal income tax is a familiar example of this. Ofte n, neither the taxpayer nor the Internal Revenue Service (IRS) can perfectl y determine a tax-payer's tote tax liability Uncertainty ignorance, and bur densome documentation requirements deter some taxpayers from taking advanta ge of legitimate deductions and credits, whereas others find opportunities for creative tar avoidance in ambiguous provisions. Complexity undermines t he IRS's ability to distinguish among intentional evasion, honest misinterp retation of the tan code, and legitimate tax avoidance. This model shows th at the IRS cannot always profitably exploit complexity.