Despite what certain voices would claim over the internets, the truth is that we don’t have the choice to “not file” or “not pay” what the tax laws say we owe. That’s why the IRS audits returns and has all sorts of mechanisms (liens, refund offsets) to encourage us to file by each April 15, and to do so correctly.
But even with payroll deductions, etc. we U.S. taxpayers are trusted to fill out the forms, ensure the correct amount was withheld and let the IRS know what our true final bill was. That’s called tax filing. And if we discover that we owe the U.S. Treasury, then our system, as it stands now, relies on us to send in the necessary payments. This, of course, is what we spend much of our time on around here at Team Kaufman — helping YOU do this ethically, but ensuring you’re not overpaying.
But Congress seems to encourage tax cheating.
They do this — probably unintentionally — by tinkering with our tax laws so much. They change them, sometimes slightly, sometimes quite a bit, and they do so constantly. What’s worse is the annual rite of procrastination in the House and Senate. I see this all the time. As a regular course of business.
And these delays in tax changes — or the decision to make some laws retroactive months later (extenders, estate tax, etc.) — totally screw up basic tax planning, sometimes negating options that could have been used to legally lower a tax bill.
(Which, incidentally, is why I have to pay so much attention to what’s happening in the legislation NOW, during the offseason. I do this so you don’t have to!)
So some people cheat. And, unfortunately, they feel justified in doing so.
One recent example was the first-time homebuyer credit that was created back in 2008 … then revised … and revised again. Many homebuyers had to “pay back” a credit that was taken under existing law — then later canceled.
And, I know (from conversations) how many felt justified in finding ways to “skim back” (read: cheat) that $500 into their returns because they were annoyed by how Congress handled it.
And there are plenty other tax laws with similar histories that tick off filers enough so that they look for ways of getting payback when they fill out their 1040s.
Now I’m not AT ALL condoning these taxpayers’ decisions to “even up” the tax code where they may find it unfair. Life is unfair and taxes are a huge part of life.
But Congress can do a lot to prevent such “they hurt me, so I’ll hurt the tax system right back” attitudes, by doing its tax-writing job in a more rational and professional manner.
Until it does, then Capitol Hill is going to keep creating tax cheats.
But here’s where the hope comes in…
For my clients and contacts, you can rest assured that we are paying attention … and will be on top of (even) the procrastinating legislators. We’ll do all we can to make sure you don’t make moves that you’ll regret after the fact.
Please do let us help you. It’s what we’re here for.