Taxes

'Tis the (Tax) Season

This year's even more painful than last.

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It's tax season again, and all across the country, taxpayers and tax accountants are feeling the effects of filing a return or an extension so they don't end up on the wrong side of the IRS, get audited or, worse, get put in prison. It's never easy, but this year is even more painful than ever.

The U.S. tax code has become so complicated that taxpayers have a hard time figuring out how to even comply with the whole thing. This has a terrible cost in terms of time, money and mental anguish. According to my colleagues Jason Fichtner and Jacob Feldman, "tax code complexity costs Americans anywhere between $215 billion and $987 billion in accounting and economic costs." In 2011, they note, Americans spent more than 6 billion hours filing taxes. "This is equivalent to an annual workforce of 3.4 million, a population that could be the third largest city in the United States."

This year is also the first season for the Affordable Care Act. The law requires most Americans to have health insurance or pay a penalty, which will be handled by the IRS. However, anxious taxpayers shouldn't expect any help from the agency. According to IRS officials, taxpayers will now have a more difficult time getting to the agency's customer service representatives to answer their questions.

The "lucky" ones who get through will have to wait longer on the phone and shouldn't expect an answer to complicated tax problems, seeing as the agency announced that it would field only "basic" tax questions. In other words, if you have a hard question, find someone else, because the IRS will not help you. And if you were hoping to get your refund on time, think again. Meanwhile, if you mess up your tax forms, the IRS won't hesitate to call you for answers.

IRS officials blame the mess on shrinking budgets. However, the IRS didn't seem to lack resources a few years ago when it was caught unfairly scrutinizing nonprofit organizations applying for tax-exempt status, simply on the basis of their names or assumed political leanings.

It also had enough resources when, in 2012, it tried to force small tax-prep companies out of business by imposing onerous and useless education and licensing requirements. That's right; the same IRS that can't answer complicated tax questions during tax season wanted to make it harder for us to get an answer from independent tax preparers. Luckily for us, the District of Columbia U.S. Circuit Court of Appeals ruled against the IRS.

Last but not least, it didn't lack resources when it worked with the Treasury Department to exceed its jurisdiction by authorizing Affordable Care Act-related taxes for the payment of premium subsidies in states that declined to establish their own exchange.

This action isn't just potentially illegal; it could have serious financial consequences for the country. The Cato Institute's Michael Cannon explained that Treasury, IRS and Department of Health and Human Services "officials simply rewrote the law to create a new, unauthorized entitlement program whose cost 'may exceed $500 billion … over 10 years.'" (My own estimate puts the 10-year cost closer to $700 billion.)

The Supreme Court took Cannon's warning seriously, and it is weighing a legal challenge that could strike down the subsidies in about three dozen states. For now, however, taxpayers must comply with the extra requirement while filing their taxes.

A Supreme Court ruling against the government would be a step in the right direction. However, the complexity faced by millions of taxpayers each year will continue until Congress engages in fundamental tax reform.

© Copyright 2015 by Creators Syndicate Inc.

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  1. how sadistic do you have to be to work at the irs?

  2. how sadistic do you have to be to work at the irs?

  3. how sadistic do you have to be to work at the irs?

    1. Less sadistic than a server squirrel?

      1. Well, you have to be nuts.

    2. How long can Reason resist Disqus. Even blogs use it now.

      1. Disqus sucks though. I hear it’s better on the back end, but commenting with it is unreliable.

        1. Fuck Disqus with a rusty spike and then give it a molten metal enema.

  4. Just got an email re: reforming CA pension system and protesters.
    Guy carrying sign claiming the reform is ‘good for Wall Street’ (why didn’t he just wite Koch Bros?) and ‘bad for everyone else’ (except, oh, taxpayers).
    I’m sure the union ignoramuses buy beef that thin, and brag about it.

  5. It’s that time of year to remind folks of this: If you get a tax refund, this is evidence of your ignorance.

    1. Exactly. It’s evidence of “structuring” to avoid an audit.

    2. Maine penalizes you for owing money at the end of the year.

  6. “tax code complexity costs Americans anywhere between $215 billion and $987 billion in accounting and economic costs.” In 2011, they note, Americans spent more than 6 billion hours filing taxes. “This is equivalent to an annual workforce of 3.4 million, a population that could be the third largest city in the United States.”

    It’s a jobs program you ninnys. Obama called for hiring 16,000 new IRS agents with the passage of O’care.

    That is jobs created and jobs saved you naysayers.

  7. We will be paying an extra large bill to the Man this year because we bought and flipped a house (we are part time evil speculators). I would love to see a serious push to end withholding in this country. Taxpayers should have to write a check. It is a huge psychological difference between having money withheld (and getting some back) than in signing over your hard earned dollars to the gub.

  8. How much taxes do you pay? I would think it over 50% if you include all. Fed, state, property, SSI, sales, excise, etc.

  9. I opened my tax program Wednesday. I was going to add a $2,000 deduction (in honor of the turn-in-an-AW idea floated) to see what it would do to the bottom line.

    I got distracted when the program downloaded an IRS “updated” Form 1040.

    “Updated” in April? [expletive]

  10. my friend’s aunt makes $61 /hour on the internet . She has been without a job for 6 months but last month her payment was $14749 just working on the internet for a few hours. read the article
    …………. http://WWW.MONEYKIN.COM

  11. I got fucked for $12K this year. That’s ON TOP of withholding.

    The imbecile at the tax preparer’s just cavalierly responds “Oh that’s because your wife died. You’re single now.”

    Losing a loved one, for the IRS is just a nice excuse to fuck you.

    1. Sorry to hear about the loss of your wife. And of your money.

    2. Bill,

      Sorry for your loss.

      If your wife died in 2014 then you can still file as married filing jointly for that tax year. Do you have any dependent children? If so, then you can file for two years after the year of your spouse’s death as “qualifying widow(er)”; which gets you the same tax rates as MFJ. If there are no dependent children then you will file as single for the tax year following your spouse’s death(assuming you do not re-marry).

      Lastly, if your wife died before 2014, did your tax preparer last year tell you about the potential changes in your filing status? If not, then they are beyond incompetent.

      1. If your wife died in 2014 then you can still file as married filing jointly for that tax year.

        Thanks for letting me know this. And for your condolences.

  12. We need to go to a flat tax with the only deduction allowed: the personal exemption for the filer and his or her family members. Then, we need to cut way back on funding for the IRS, with no refunds allowed, thereby cutting down on the paperwork and staffing requirements. (Any overpayments can be applied to the next years taxes) We can argue until hell freezes over about what constitutes income, but the simplicity of a flat tax far outweighs any shortcomings. As for the corporate income tax, it should be totally eliminated. Doing so would result in the repatriation of huge amounts of capital into the US economy.

  13. And you probably still pay less taxes than in my country The Netherlands (sigh).

  14. Google pay 97$ per hour my last pay check was $8500 working 1o hours a week online. My younger brother friend has been averaging 12k for months now and he works about 22 hours a week. I cant believe how easy it was once I tried it out.
    This is wha- I do…… ?????? http://www.netjob80.com

  15. Google pay 97$ per hour my last pay check was $8500 working 1o hours a week online. My younger brother friend has been averaging 12k for months now and he works about 22 hours a week. I cant believe how easy it was once I tried it out.
    This is wha- I do…… ?????? http://www.netjob80.com

  16. I get paid over $87 per hour working from home with 2 kids at home. I never thought I’d be able to do it but my best friend earns over 10k a month doing this and she convinced me to try. The potential with this is endless. Heres what I’ve been doing,

    ———– http://www.work-cash.com

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