IRS Meltdown

Ideas and Issues
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  New Orleans     For regular taxpayers, April 15th means something.  For employers, this time of year means making sure that you’ve filed your quarterly payments for December, and, more important to all your workers, that you are shoulder-to-the-wheel to get them their tax statements as soon as possible, and no later than the end of the month, so they can file pronto.  The incentives and motivations are usually pretty clear when it comes to taxes.  The earlier you file, the quicker you get a refund, if you’re in that lucky group.

            Not so fast, cowboys and cowgirls.  The IRS this year has pulled out the crying towel, and it’s not just the pandemic.  You have problems, “call, Saul!”  The IRS seems unable to pick up the phone.  An old and revered ACORN leader used to define a rationale “as a lie in the skin of a reason.”  This year the IRS has some real reasons in the skin of a pandemic rationale.  As the story in the Times reports,

Although the population of the United States has grown by about 60 percent since 1970 and the tax code has become more complex, the size of the work force at the I.R.S. has been flat. The agency has fewer auditors now than it has employed at any time since World War II.

Furthermore, in the USA, it’s not like there are going to be a bunch of volunteers showing up at their offices to lend a hand helping them collect either.

            Actually, it’s not exactly collection that falls down, but processing.  On January 8th, the Times also reported that, “The IRS website says that as of December 18th, the agency still had 6.3 million unprocessed individual tax returns from last year.”  That’s a lot of returns.

Recently in a twisting tale, I found myself in that number.  Inquiring about a loan, the bank asked for my permission to request a statement from the IRS verifying my return from 2020, the “last year” the IRS is reporting having fallen behind.  When the bank got the report from the IRS, they said they had no record of my having even bothered to file, inferring that I was some kind of billionaire scofflaw deadbeat.  I couldn’t get my bank statements from Capital One online, but that’s another long story.  When I got back into town, miraculously, I was able to find statements that I hadn’t thrown away for a couple of months in the spring and summer.  Darned if it didn’t find the proof that I had written the checks to the IRS, and that the money had been withdrawn by the IRS, in one case within three days, and the other within some weeks.  I now even had a physical copy of the cancelled checks from the IRS.  My point being for those of us in the over 6 million stuck in the system, they are still good at making deposits, just not so quick at actually moving the paperwork down the line.

            Congress, under the thumb of an army of well-heeled lobbyists and other enablers, is at fault here.  They have been refusing to increase funding from the IRS, even if, and perhaps especially if, it means more money and workers to go get the money.  Some of the Republicans claim they are not just toadying to the rich, but that they had their feelings hurt some years ago about how the IRS issued nonprofit status determinations for Tea Party groups.  That’s a perfect example of a rationale under the earlier definition, as a “lie in the skin of a reason.”

            It turns out that only death is certain.  Taxes, not so much.