Tax Hell

This is the monster we have created.

Ten people who entered the country illegally were busted in North Carolina for running a tax preparation business that claimed 22 million dollars in phony tax refunds for their clients between 2006 and November 2009. One tax credit improperly claimed on a majority of the false returns was for child care expenses, prosecutors said. The credit can result in a refund even if no taxes were paid. About 13 million in refunds were paid before the IRS discovered the fraud. A number of the guilty parties would “assist” their clients in cashing the refund checks, presumably pocketing a healthy cut of the refund.

Ask yourself why international criminal gangs would come here to target our tax system as a means to make a living.  The number one reason you should already know is that the tax code is so complex that even the IRS can’t figure out who owes what.

The second thing you should think about is whether it is really worth it to you to go through so much work and agony to get each tax break or credit the law allows.

While my retirement income is pretty straight-forward, I spent sixty bucks on a tax program to help me organize my records and calculate profit and loss on a pitiful publishing business and a significantly more successful bit of stock market gambling. In both cases, the software left me in the lurch to read multiple volumes of tax rules and instructions from the IRS. I had to file three different forms on a 75 dollar capital gains reduction that saved me close to 20 bucks. But I spent six hours scratching my head while reading the instructions in four different IRS publications. In other words, H&R Block either didn’t know what I should do, or their paid software engineers could not write software that could calculate it.  I would gladly have paid the 20 bucks just to avoid reading all that legalese garbage, but I didn’t want the IRS to throw me in jail for not filing three pages of forms which each had a single line item saying the form they required the oil company to submit did not apply to me or mean a damn thing.

If we re-write the tax code to cut out the wrangling over what we can deduct or whether the government ought to give us money for taking care of our own kids, I could have saved the 60 bucks on software, a net savings of 40 bucks without the reduced taxes. Imagine what I could have saved if I had hired a tax consultant to figure out I didn’t owe twenty bucks.

The IRS could have saved us 13 million bucks in fraudulent refunds, and we would have a few less illegals who come here to steal from us because our tax system is insane. Now, why in the world am I paying you to take care of your kids?

This entry was posted on April 4, 2010 at 06:16 and is filed under Contributing Authors. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.