Friday, June 17, 2011

Open Source the Tax Code

This week, the U.S. government released a major update to the online version of the Tax Code. For some reason this didn't make headlines.
Here, and in future posts, I will discuss why the text of the Tax Code needs to be "open sourced", and how we're approaching this challenge at Tabulaw with tax26.com. The work to introduce structural metadata to California's laws (ongoing, now open sourced on Github, and available at calaw.tabulaw.com), was a warm-up for this discussion.

This week's update of the Tax Code illustrates the challenge ahead: The update, by the Law Revision Counsel, a small, dedicated office of Congress, incorporates all of the changes that Congress has made to the Code from 2006 through the end of 2010. The Internal Revenue Code is the Federal law that arguably has the greatest impact on the lives of most Americans. And for the time being, the public has an up-to-date version* of this law.

The impact of the nearly 10,000 sections of this law is one reason that President Obama emphasized the need to simplify the Tax Code in his State of the Union Address, saying, "It makes no sense, and it has to change."

Yet this lack of clarity is itself a major impediment to change. If and when Congress takes up the battle over what the tax code should say, we will need as much clarity as possible about what current tax law actually says. The effort will raise a fierce debate about important issues of tax policy, fairness and the future of this country. However, these issues become clouded by a mire of laws, regulations and guidance that even leading experts (and the IRS) struggle to understand and explain. Technology cannot cut through all of the fog, but there are non-partisan, technical solutions that can help make the task easier. An Open Government bill introduced today by Representative Darrell Issa (R), includes an important open data provision that would impact IRS (and other) agency rulings and guidance. I believe that open-sourcing the law itself is a natural corollary to this bill.

By open sourcing, I mean to:
  1. Introduce meaningful metadata into the text.
  2. Parse or draft new tax-related bills in so that they can be:
    1. instantly compared to existing laws and, when passed,
    2. used to immediately update a public, online version of the new law.
  3. Create an platform that experts and professionals can use to research, debate and explain the law.
The first two principles are essentially a subset of common-sense "open data" principles such as these from the Sunlight Foundation or these from the law.gov initiative. The third is a focus of our work at Tabulaw to improve online tools for legal professionals (more on this soon). We are at an exciting time for initiatives to reinvent participation in government (e.g. PopVox, OpenCongress, Sunlight Foundation's OpenStates etc.). I believe that, especially wrt the Internal Revenue Code, there is much groundwork that needs to be done by the professional tax community--in clarifying, explaining and simplifying the Code--in order to make public participation in the policy-making process more meaningful.

*The LRC version is up-to-date through January 2011.