The U.S. tax code has become so incredibly complex that taxpayers are increasingly making unintentional mistakes -- and then being hit by penalties and interest from the Internal Revenue Service. "Penalties and interest are out of control," says former IRS Commissioner Fred Goldberg, charging that they "are just crushing people."

• In 1955, the tax code contained just 14 penalties -- but now has 150.
• In 1980, the IRS imposed $1.6 billion in penalties, a figure which climbed to nearly $7.5 in 1996.
• Some penalties are as much as 25 percent of the tax owed -- not including civil fraud penalties, which can hit 75 percent.
• Experts say that by the time the IRS tracks down tax procrastinators, often taking up to a year and a half or two years, the penalties and interest can be huge.

Political observers report Congress added tax penalties and interest to the tax code in the 1980s in an effort to raise money, demolish tax shelters and punish those seeking to avoid taxes. But those harsher penalties are hurting filers who simply make mistakes as they wade through the increasingly complex forms.

Until 1986, there was no difference between the rate the IRS charged delinquent taxpayers and the rate it paid taxpayers when it was late with refunds. Then Congress mandated a 1 percentage point difference. Currently, the IRS pays individuals 7 percent a year and charges 8 percent.

For businesses, the gap between the IRS's interest charges and the interest rate it pays can be as high as 4.5 percentage points.

Bills now before the House and Senate would do away with the interest differential for individual taxpayers.

Source: Paul Wiseman, "Critics Say the Burden is 'Breaking People's Backs,'" USA Today, April 15, 1998.