Friday, March 28, 2008

Stimulating discussion about the IRS

Dave, of Rather Than Working, had this interesting post the other day about how the Internal Revenue Service says that the cost of personal calls an employee makes on a company-issued cell phone should be considered (read: taxed) as income to the employee.

Wonderful idea, really. And sooooooooooo easy to keep track of and enforce. Such a brilliant idea will no doubt balance the budget overnight. (And, yes, if my tongue were any further in my cheek I'd injure myself.)

Coincidentally -- I hope -- I recently received a notice from the IRS advising that I'd been late on a monthly payroll deposit -- which was true (and entirely unintentional, believe you me) -- and what the penalty for my tardiness would be. That is, the notice stated what my penalty would be if the IRS chose to impose it. Which, after reading it through a few times, I gathered it is not.

Why should the IRS spend the money at all to tell me I messed up if it wasn't going to extract its pound of flesh? Am I supposed to save the letter just in case the IRS changes its bureaucratic mind? Would that really do me any good?

Maybe the notice was to make me feel better about the IRS. Like the tiger smiling at its victim just before it pounces.

Still, that's my working hypothesis, particularly after the notices we received at home from the kinder, gentler IRS.

American readers, at least, will recall that the Bush administration has decided to combat the recession that they say isn't a recession with a "stimulus package." They would print some extra money and give it to taxpayers so we can spend it and stimulate the economy out of the not-recession.

Congress immediately went along with the idea. Giving money away to voters has to help at re-election time. And you must remember the basic truth of American congressional politics. When push comes to shove, there are no Democrats, there are no Republicans -- there are only Incumbents.

Anyway, this was all a couple of months ago. Americans are still waiting for their checks so they can buy Chinese goods at Wal-Mart or Japanese electronics or shirts made in Bangladesh or Costa Rica or Thailand... how is this supposed to help the American economy again?

So the kinder, gentler IRS recently sent notices to everyone who's filed a tax return. In our house, that was six out of seven of us. That meant six notices in the mail. Each one the same -- each one telling us that we have to file a tax return this to get our one-time stimulus payment. It even purports to tell us how much we can expect.

I've read mine several times and still haven't the first clue.

In the meantime, how much did mailing these notices cost?


Shelby said...

"In the meantime, how much did mailing these notices cost?"

well, a hole lawwwwwt.

Dave said...

Taxation suffered a blow this week in Nevada though. The state Supreme Court ruled that casinos don't have to pay state sales tax on the value of a comped meal. They decided that since raw food isn't taxable and there was no sale, there was no taxable event. My bet is that the Nevada revenue department will impose a rule that says they have to collect the use tax.

Linda said...

Here's a thought - let's declare one year every ten years to be a tax-free year - meaning that no one has to pay any income tax at all during that one year and they must in turn promise to use that money to stimulate the economy. Think how much money the IRS could save by not having to work extra hours to process returns, the amount of money spent on mailings and paperwork, and the savings on health care for stressed out employees!

Of course, H&R Block would be appalled at such an idea but it would sure boost the morale of the rest of the country! We're already a nation horribly in debt and paying taxes out the wazoo so why not give us all a break for just one year?

I know it would never fly but it's a thought ... maybe I could get one of our office-seeking politicians behind it!

Jean-Luc Picard said...

It's those that don't pay the taxes we need to catch!

Patti said...

A tax-free year! What a concept Linda has there.

And the mailing cost...must have been enough to feed the hungry for a year, no?

Kacey said...

Your questioning of the cost of the mailings matches the things rumbling about the edges of my mind. If you give a charity a check, they oblige you by spending all the money in future mailings asking you for more money. The AARP already has us for Health insurance supplement, car and truck insurance and homeowner's insurance--- yet, they send piles of mail advertising their insurances monthly and inch thick booklets about drugs annually. We could have cheaper premiums if they would cease with the multiple mailings. I think we should buy stock in paper mills whenever the government announces any new program.

TroyBoy said...

So true that it hurts. Curmy, if you get a chance, would you please come over and read today's post. I'd sppreciate your opnion on the topic.

Barb said...

I heard somewhere how much the notices were supposed to cost, but I've forgotten. Or blocked it.

Lahdeedah said...

We got the notice.

It was confusing. We filed our tax return, and asked at H and R Block, just what it meant, what would we, a family with one income and three kids, be likely to get?

She said,

No One Knows. They have no information on how it's going to be doled out.

It was the single most useless piece of mail to come through my door.

Ellee Seymour said...

I haven't heard of this problem re the phones yet in the UK, though I expect it is to be expected.

Let's hope that voters can see through the financial enticements from Bush et al. I agree with your concern too about imported goods, I've asked the same question about UK manufactured goods when people ask where is our Britishness today.