The IRS Likes Your Undies More Than You

Sad to say, but I am worth less than my old underwear.

Don’t chortle. You are worth less than my old underwear too.

All of us are. And it’s not that my underwear is special. I’m worth less than your underwear.

Tomorrow is tax day--the moment when we dwell on details like this.

Why are we worth less than our underwear? I called the IRS.

“I can refer you to Publication 526,” said the voice.

Sure enough, Publication 526 says this: You can deduct from your federal taxes the fair market value of things that “can be seen or touched” when you donate them to charity.

So we bundle up our old T-shirts, put them in a bag and drop them off at Goodwill. Generous us.

At, say, $1 apiece, I’ve got about $50 worth of charity taking up space in my garage. Add in all those trousers that no longer fit, and the frayed shirts, and the cold-weather parka that I no longer use, and I’m almost ready to become a philanthropist.

Publication 526 goes on, however, to explain that insofar as our own selves and our talents, we are allowed no deductions for charitable deeds.

The goodness in one’s heart can be neither seen nor touched, and therefore does not measure up to a pile of old of T-shirts.

So, if I get up early and volunteer as a writer-in-the-classroom and teach two classes of journalism at my neighborhood public high school, as I just did, I have not made a contribution to my community in the eyes of the Internal Revenue Service. The same if you volunteer to be a nurse’s assistant at the Red Cross. Or if you help out by serving soup at a shelter for the homeless or read to the blind.

Your labor, your energy, your 30 years of expertise--zip.

“You cannot deduct the value of your time or services,” says Publication 526.

Seems to me that George W. Bush’s twin goals of cutting taxes and spurring charity would be served by starting with Publication 526 before leaping to put church groups on the federal dole.

But, in fairness, the IRS is not nearly as bad as Wall Street when it comes to the value of ourselves. At least the IRS does not consider you a liability.

If you work for a publicly held corporation, that’s just how Wall Street views you. That’s why we’ve been seeing six weeks of headlines about ever-growing layoffs, followed by the cheery approval of Wall Street and a corresponding blip upward in stock value.

These kinds of news reports get the morning blood pumping in ways that even strong coffee cannot.

The sad truth is that the United States clings to a corporate accounting system in which the knowledge, experience, relationships, Rolodexes, loyalty, skill and insight of workers cannot be computed as assets.

They are--we are--alas, mere liabilities. Those are the exact words used on financial statements: assets and liabilities.

Even if your services are highly valued, The Firm has no way to report that. Wall Street has no means to weigh it.

In a recent expose on the subject, the magazine Smart Business assembled research studies and experts to make a powerful argument that the failure to fairly account for the intangibles of “knowledge capital” is responsible for stock market volatility, self-defeating business decisions and counterproductive tax policies.

Some experts believe that the assets of a modern company’s work force and other such intangibles, like brand names and patents, are worth three times as much, on average, as traditional brick-and-mortar assets.

As it now stands, a company with an empty chair can report an asset. Put a worker in the chair, and it is saddled with an expense. A newspaper with 10 reporters has more value on the balance sheet than one with 100, given the same circulation.

“We’ve got this ossified accounting system that got us fine through the Industrial Age but which isn’t really adequate for a service economy,” one researcher explained.

Surely, our good deeds are worth more than our underwear. Surely, when we go to work tomorrow, we bring something more than liabilities to the chair. Surely, we can figure ways to account for us.