Tax Agency Errs By Millions

Dear Ann Landers: You certainly went easy on the Internal Revenue Service in your recent reply to “Los Angeles Taxpayer.” He described a tale of red-tape madness. You replied, “It’s a miracle the IRS doesn’t screw up more often.” Frankly, Ann, you need a reality check on just how incompetent the IRS really is.

The IRS DOES screw up more often. How about the 3,000 people notified by the IRS in 1993 that they each owed $4 billion in back taxes? How about the Philadelphia chemical firm that was penalized nearly $47,000 because the IRS determined that its tax payment of $4,448,112.88 was a dime short?

The IRS recently spent $8 billion to overhaul its computer programs. What it got for all that money, a top official admitted, are systems that “do not work in the real world.” The federal tax agency sends out some 30 million tax penalty notices every year. Nearly half are erroneous.

As the tax deadline approaches each year, the IRS invites taxpayers to call its toll-free number with questions. When they do call in, millions are given the wrong answers. Then when those callers rely on those wrong answers, they are slapped with interest, penalties and liens on their property. The Heritage Foundation compiled nine pages of numbers underscoring IRS ineptitude. Here are just a few examples:

The number of times the IRS gave the wrong answer in 1993 to taxpayers seeking assistance with their tax forms: 8.5 million.

The percentage of its own budget for which the IRS could not account in an audit: 64 percent.

The number of correction notices sent out by the IRS each year that turn out to be wrong: 5 million.

The number of women wrongly fined each year because they get divorced or remarried: 3 million.

The number of taxpayers whose old-age benefits will be cut because the IRS doesn’t properly record their tax payments: 10 million.

As the IRS Code grows ever more complex, it becomes easier for agents to find something wrong with any tax return. The existing tax code has become a source of unfathomable power for IRS agents - and that power corrupts. In a survey of IRS officials in 1991, three-fourths said they would probably not be “completely honest” if they had to testify before Congress. Nearly half admitted they would use their position to harass personal enemies.

So take a few lashes with the wet noodle, Ann. Then add your voice to the cry for a simpler, slimmer, saner tax code. Do it for your readers. Believe me, Ann, they need your help. - Jeff Jacoby, columnist, Boston Globe

Dear Jeff Jacoby: You’ve made a pretty solid case against the Internal Revenue Service and knocked some credible holes in what now appears to be my rather lame defense. I’m getting out the wet noodle in anticipation of 40 lashes. I found especially unsettling the survey of IRS officials in 1991 who said they probably would not be completely honest if they had to testify before Congress.

If anyone from the IRS would like to respond to Jeff’s charges, I will gladly step aside and let him or her use my podium. Any takers?

Gem of the Day (Credit Mae West): They say money is the root of all evil, but I’ll take money over being broke any old day of the week.

P.S. This is now Ann talking. Actually, the saying is “the LOVE of money is the root of all evil” - which makes better sense.