Warehouse E

Fox Guarding The Henhouse

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Would You Trust The IRS With Your Tax Form?

By James Donahue

A bill introduced by Rep. Anthony Weiner would give taxpayers the option of letting the Internal Revenue Service handle their 1040EZ and 1040A tax forms instead of hiring private tax preparers, or attempting to tackle that maze on their own.

Weiner’s reasoning, expressed in a story reported by the New York Daily News: “More people would file. Fewer people will have to spend money on tax firms or on computer software. And we’ll be improving the relationship between the IRS and taxpayers for whom April 15 is a big headache.”

It sounds like a good idea, but those of us who have been dealing with the IRS over the years, and have either come up short of enough cash to pay what was due on deadline, or been audited and hit with an unexpected financial and mental dilemma in mid-year, entertain a certain distrust for the IRS agents in our neighborhoods.

What we have discovered is that once an IRS agent starts scanning our specific tax form, we can expect to get nailed for more cash no matter how honestly we tried to fill in the blanks.

We also learned that the left hand does not know what the right hand is doing in that agency. What one agent will approve, another will prohibit. The tax laws are so convoluted that even the so-called “professional” government IRS agents do not understand them. So how can we expect them to be fair when “helping” us with filling out or annual income tax forms?

We have found over the years that hiring experienced private tax consultants is the best way of dealing with income tax. These people make a business out of studying the law, and calculating what is generally acceptable by the IRS, and what is not. They also know what kinds of deductions raise red flags in the government computer system that scans our data. Sometimes, even when we have what we believe is a legitimate deduction, we don’t claim it just to make sure we don’t trip any alarms.

It is worse to be audited by the IRS, even if you are right, than it is to give up the few dollars in deductions you might be able to claim.

For me, the idea of trusting these calculations to the very agency that is holding a shotgun to my head, and forcing me to help fund the president’s wasteful war budget, is like letting the fox guard the hen house. We can expect to be hit with a bigger than expected tax debt, and without paying for a second opinion, we will have no way to defend ourselves.

Not that the IRS would listen to any argument presented once the decision as to our tax debt for the year will be. They usually don’t.

There was one exception, however. Some years back I was audited. That was when I hired H&R Bloc to do my returns, and the tax agency agreed to participate and help defend me. (I don’t think they do this anymore.) We spent a long hot afternoon in that IRS office, some 60 miles from home, pouring over numbers and calculations until my head was swimming. But we got lucky and met with an honest agent. In the end, I was told I overpaid. There was a REFUND.

It wasn’t a big refund, but enough that I was able to treat the tax agent that helped me that day to a nice meal in a local restaurant during the long trip home that evening.