Bill Gates Gets Special Computer at IRS

February 1, 2006

Yesterday at a conference in Spain, Microsoft founder Bill Gates claimed that his tax return is so complex and so filled with large numbers that a special computer is required at the IRS in order to process his return. From Agency France Press:

Microsoft founder Bill Gates, the world’s richest man, said the tax office in the US has to store his financial data on a special computer because his fortune is so vast.

“My tax return in the United States has to be kept on a special computer because their normal computers can’t deal with the numbers,” he said at a Microsoft conference held in Lisbon.

“So I am constantly getting these notices telling me I haven’t paid something when really it is just on the wrong computer,” he added in comments broadcast on television.

“Then they will send me another notice telling me how bad they feel they that they sent me a notice that was a mistake,” he said. (Full Story)

It appears as if Bill Gates is personally responsible for a large fraction of the compliance costs of our income tax system, including the required purchase of a special computer. There is a simple solution to much of the problem – have a simple income tax with a low rate that treats all income equally with few exemptions or deductions. The charitable deduction alone for Bill and his wife, Melinda, probably consumes the bulk of this problem for the IRS and his army of accountants.

Here’s a few interesting questions to ponder regarding Bill Gates’ tax return: Did Gates pay cash for his mansion or borrow and thereby claim the home mortgage interest deduction? Do Bill and Melinda file jointly or separately? Is he hit with AMT? And finally, is this special IRS computer a Mac or Windows PC?

For more on tax complexity, the charitable deduction, and simplifying our tax code, check out the links provided.

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