Obama looks to cut budget deficit, considers tax overhaul

If President Obama is serious about finding ways to cut the budget deficit, he should start with the Internal Revenue Service. With its entrenched bureaucracy, the IRS is thwarting whistleblower cases that if pursued would allow the government to recover billions in unpaid taxes from Wall Street banks, hedge funds and corporations.

As a possible means of cutting the budget deficit, Obama has indicated that he would like to begin a conversation about overhauling the U.S. tax code, by directing his economic team to begin considering options for tax code reform.

As Obama is considering a report by his commission on reducing the federal deficit, Congress is preparing to vote on extending Bush-era tax cuts.

White House task force formed to examine tax system

The Obama administration is looking for ways to reform the U.S. tax system and to aggressively reduce the tax gap, such as by attacking tax evasion.

Administration officials announced March 25 that a task force headed by former Federal Reserve Chairman Paul Volcker will study options and make recommendations to the President by Dec. 4. Volcker is now head of Obama's new Economic Recovery Advisory Board.

For comments by Office of Management and Budget Director Peter Orszag about the tax reform task force, see Reuters' story, Volcker panel to study tax reform, report to Obama.