As Midnight Approaches ...
We’re not suggesting anybody actually procrastinates on their income taxes before today’s midnight deadline. But if they did, and if they went to the Internal Revenue Service website and searched for, say, the word “hilarious,” they’d come up with no results. Same for “fun.” Nothing either for “gotcha.” On the other hand, just for hilarious fun, a search for the word “prison” produced 192 results. By the way, the IRS is stressing enforcement anew these days.
That’s a key part of the message delivered by IRS Commissioner Mark W. Everson during a pre-deadline media tour: Equitable enforcement is crucial to overall compliance. It’s important because humans tend to obey in direct proportion to the threat of getting caught. Also, no one likes feeling they belong to the sucker sector that pays taxes while the clever types escape. And tax enforcement remains delicate in a country where the perception of unfair taxation had something to do with the founding revolution.
The fact that increased audits also produce more revenue is a bonus. Importantly, the IRS estimates the difference between what taxpayers should and do pay at between $257 billion and $298 billion annually, about a 15% noncompliance rate. The rest of us and our children pay those dodgers’ shares for years as the shortfall boosts national debt.
But amid the predictable annual moaning as the deadline nears, significant changes are underway. This year, for the first time, a majority of tax returns will be filed electronically, which reduces IRS costs, refund time and TV news video of overflowing mailboxes.
Not that anyone tears up over the workload of the IRS and its 100,000 employees, but it is colossal. Spending $10.2 billion, the IRS rounds up $2.054 trillion a year, not a bad return on investment. This year about 133 million tax returns, more than 15 million of them Californian, will be filed, about 52% of them electronically and about 40% in the last three weeks. About 8.9 million people will seek extensions. Last year, 53 unusual -- and generous -- individuals chipped in an extra $120,065 total to help the government make ends meet.
Nearly 80% of tax filers get refunds, averaging $2,100 each. In California that’s about 12 million individuals and $25 billion flowing back.
Thinking “trust but verify,” the IRS this year will audit one in six large corporations, about 200,000 people earning more than $100,000 and in excess of 1 million other individuals. FYI, just to verify the professed renewed attention to audits, someone recently audited the IRS website for “audit.” The search stopped after 50 pages of results.
