More Overlooked But Needed Tax Reforms

More Overlooked But Needed Tax Reforms

Continuing with my list of reforms I think would help our tax system (see prior lists of 8/29/21 and 6/21/21), here are three more.

  1. 1. Consolidating education provisions further. Need to better identify purpose of these provisions and if their “cost” is appropriate and in line with direct spending such as Pell grants.
  2. 2. If higher education incentives are retained, be sure they also cover post-secondary trade schools and only for reasonable costs.
  3. 3. Make the IRC gender neutral – “his” is often used in the Code, sometimes even to describe a business (such as at §446(a)). Also, references to husband and wife should be changed to spouses.


  • §213 – Medical, dental, etc., expenses. (a) Allowance of deduction. There shall be allowed as a deduction the expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof), to the extent that such expenses exceed 7.5 percent of adjusted gross income.
  • §446(a) – General Rule. Taxable income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes his income in keeping his books.
  • §7701(a)(17) defines “husband and wife”.
  • §121(d)(1) – “If a husband and wife made a joint return for the taxable year of the sale or exchange of the property, ….”

While Rev. Rul. 2013-17 suggests a gender-neutral reading of the Internal Revenue Code, changes have not been made throughout.[1] This ruling was obsoleted by TD 9785 (9/8/16), adding Reg. 301.7701-18 defining spouse, husband and wife, husband, wife and marriage. No changes are made to the Code or other regulations to make them gender neutral.

H.R. 3833, Equal Dignity for Married Taxpayers Act of 2021, proposed to make numerous changes to the IRC to, for example replace “himself” with “self” and “husband and wife” with “married couple.” It would also repeal §7701(a)(17) that defines “husband and wife” and modify §7701(a)(38) that defines “joint return” to say it is by a “married couple” rather than a “husband and wife.”

There should also be a requirement to update regulations.


[1] For example, Rev. Rul. 2013-17 states: “consistent with the statutory context, the Supreme Court’s decision in Windsor, Revenue Ruling 58-66, and effective tax administration generally, the Service concludes that, for Federal tax purposes, the terms “husband and wife,” “husband,” and “wife” include an individual married to a person of the same sex if they were lawfully married in a state whose laws authorize the marriage of two individuals of the same sex, and the term “marriage” includes such marriages of individuals of the same sex.”

What do you think? Annette Nellen, San Jose State University.

Annette Nellen, CPA, Esq., is a professor in and director of San Jose State University’s graduate tax program (MST), teaching courses in tax research, accounting methods, property transactions, state taxation, employment tax, ethics, tax policy, tax reform, and high technology tax issues.

Annette is the immediate past chair of the AICPA Individual Taxation Technical Resource Panel and a current member of the Executive Committee of the Tax Section of the California Bar. Annette is a regular contributor to the AICPA Tax Insider and Corporate Taxation Insider e-newsletters. She is the author of BNA Portfolio #533, Amortization of Intangibles.

Annette has testified before the House Ways & Means Committee, Senate Finance Committee, California Assembly Revenue & Taxation Committee, and tax reform commissions and committees on various aspects of federal and state tax reform.

Prior to joining SJSU, Annette was with Ernst & Young and the IRS.

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