Let’S Give Average Folks A Turn At Getting Decent Breaks

The old joke, “I’m from the government and I’m here to help you” always brought a snicker and a shake of the head.

Well, a few weeks ago, some agents from the Internal Revenue Service, the least trusted of all branches of the government, opened their doors (behind metal detectors and security officers) and welcomed taxpayers into their offices with promises to help with tax problems.

It was a strange feeling to have these agents acting like they truly were trying to help. I think they were genuine in their efforts, but they had viewed us, the taxpayers, as some kind of tax cheats if we were unable to come up with the additional taxes owed. We had viewed them as something akin to leftovers from Gestapo days. It is hard to change each other’s views.

From what I gather, the only help the brave taxpayers got was what the laws already allow. No dispensations were bestowed. The IRS was finally telling taxpayers what they really could do under their particular circumstances.

One couple left feeling even more betrayed. It seems they were contacted by the IRS a few months back under threat of a levy on their wages, which would have put the couple into financial turmoil. The agent was able over the phone to get the taxpayers to agree to squeeze $95 per month out of an already tight budget to pay toward the taxes owed.

First, to keep from having their wages garnisheed, they had to sign an extension of 10 years. Twenty percent of the taxes, interest and penalties would have been written off the next year.

These people hadn’t been dodging the revenue agents. In fact, they had made contact with them every year. Based on a financial statement, the IRS determined they didn’t have enough income to pay taxes at that time. These were law-abiding citizens; they just were living hand to mouth, trying to raise two kids and hoping some day to have their own home.

When they told their saga, the agent shook his head in disbelief that someone had stiffed them with a 10-year extension. It seems that a shorter extension, or none at all, would not have violated any rules.

So much for building trust.

The agent worked for several days after the night meeting at the Federal Building. He determined they could pay $100 per month. He tried hard, using every legal means he could think of, to reduce the amount but it always came out the same - $100 per month.

The formula goes something like this: Amount taxpayer is able to pay per month over five years is the amount the government can settle for. It doesn’t have any bearing on the amount of taxes owed. Easy math: $100 times 60 months is equal to $6,000, which was within $200 of what the couple owed. They had no assets and were making payments on the one car they had.

The agent said it was too bad they weren’t making payments on a second car. It would have been nice, as they worked at opposite ends of Spokane. But they couldn’t afford another payment. No help here and their previous contact had shafted them for another 10 years.

Let’s take a look at the same couple, with the same income and assets, except instead of owing just $6,000 in taxes, let’s say they owe $100,000. Nothing would have been different. The government could have settled for the same $6,000 and offer a compromise. The IRS would write off $94,000 in back taxes.

Could they compromise even a couple thousand dollars for this couple? No.

What is wrong with this situation? If you owe lots of taxes, you get a break. But if you owe just a few thousand dollars, you get no break. If the government could write off $94,000 under one circumstance, why not do the same for just $3,000 or $4,000, allowing the citizens to get out from under the burden?

This kind of scenario doesn’t build trust in the little guy’s mind. Once again, the breaks go to the big guys, not the common, working-class citizen.

Let’s take a look at another aspect of the IRS that brings a cold shiver to the heart: the audit.

I can hear some saying, as I do, “I don’t have to worry; I don’t make enough money.”

You’re dead wrong.

According to the General Accounting Office, 85 percent of people audited over the last three years made less than $25,000. That won’t even qualify you to buy a $95,000 dollar house. (With the average home price in Spokane around $125,000, where are you going to live?)

Most people who have this kind of income are hourly wage earners with little if any other income. If you receive $12 an hour - and how many jobs pay that? - you make $25,000 per year. Remember, the 85 percent audited make less than $12 per hour - per household.

It goes against all we hold to be fair in this country to be audited unless the government has some strong reason to believe you are cheating. When you make barely $2,000 a month, after paying for your rent, car payment, utilities and groceries, just how much do you have left to cheat with?

If the IRS wants to help us, it should set the rule book aside and truly help working-class taxpayers. IRS people have to turn the auditing guidelines around and have 85 percent of the audited make well over 12 bucks an hour.

It was a nice gesture, but the people who were going away smiling could have had the same smiles if they had just been told the right moves to make in the first place.

If a 5-year-old boy can’t pick up the written tax code book, it’s out of control. Let’s make paying taxes fair and simple for once. After all, I was told in high school history class that the income tax we pay every year was originally a temporary tax to pay off our war debt - the Civil War!