Rule Five Friday

2015_02_06_Rule Five Friday (1)Granted, for any right-of-center blogger, the IRS is pretty much low-hanging fruit for a good rant.

But let’s go for it anyway.  Here are ten tax facts the IRS doesn’t want you to know.  The first two:

This is shaping up to be a tough year for the Internal Revenue Service…and, potentially, for taxpayers. Not only is the agency hobbled by budget cuts, but it faces more demands due to Obamacare and rampant tax-related identity theft. Customer service will be worse than ever.

The IRS ideally projects an image of efficiency and fairness. But as a government agency, it also has to inform citizens about its inner workings. Gleaned from its public documents, here are 10 facts the IRS would probably rather the American public did not know:

2015_02_06_Rule Five Friday (2)Related: 10 Surprising Tax Deductions in 2015

1. It’s unlikely that you’ll get audited. The IRS audited fewer than 1 percent of individual returns last year and this number is likely to drop again this year due to budget cuts. The IRS budget approved by Congress this fiscal year is $10.9 billion, down from $12 billion in 2012. The agency has about 17,000 fewer staffers than it did in 2010. Meantime, it has to deal with a surge in tax refund identity theft (see No. 6, below) as well as complex new filing requirements related to Obamacare.

Of course, the odds of getting audited are a lot higher for some taxpayers. If your income is over $1 million, your chances of getting audited jumps to 11 percent. And there are plenty of additional red flags that can trigger an IRS audit.

2015_02_06_Rule Five Friday (3)2. Calling us for help is a crapshoot. If you need to speak to an IRS agent, you may be out of luck. Last year, 35.6 percent of phone calls went unanswered by customer service representatives. But this year the IRS projects only 43 percent of callers will get through to an agent after a wait of 30 minutes. That’s an average, notes National Taxpayer Advocate Nina E. Olson, in a January report to Congress. That means some days will be “truly abysmal,” she says.

Well, hell, thanks to the IRS and the bureaucrats and politicians that pass the laws and make the regulations that comprise tax policy, plenty of days are “truly abysmal” for taxpayers, too.

The U.S. tax code is, at last and best information, somewhere close to 80,000 pages.  The truth of it is that nobody understands this monstrosity, not even the IRS agents who are supposed to advise the citizenry on their tax returns.  My own dear Mrs. Animal can testify to that; she has been doing our taxes for twenty years, and as our business has grown, gone international and become more complex, so has our tax filing.  When our kids were growing up, they knew Mom was a little cranky around tax time and made allowances.

2015_02_06_Rule Five Friday (4)Why should that be the case?

A truly fair tax code should be simple.  A truly fair tax filing should be along the lines of “Enter your income form all sources on line A.  Multiply your income by .065 and enter that on line B.  This is your tax liability.”  I’d be willing to exclude, say, the first $30,000 (or whatever number makes sense) from taxation.

I’d much rather have the Fair Tax, but I’d settle for an honestly flat tax.

2015_02_06_Rule Five Friday (5)Instead, we have an 80,000 page monstrosity that manages to punish success, reward failure, and support a fair-sized army of tax accountants and lobbyists.

In what way is this anything but a catastrophe?

President Obama has made noises about tax reform, which in his lingo means raising tax rates and coming up with new taxes and fees.  The new GOP Congress has made similar noises, which in their case almost certainly means putting a fresh coat of lipstick on the same old pig.

Why isn’t there a Presidential candidate out there willing to talk about this?

2015_02_06_Rule Five Friday (6)