Kosmo would like to give readers of Lazy Man and Money a discount at his store. For the next month, use the coupon code LAZYMAN20 to get a 20% discount on all items (excluding writers’ tip jars).]
Michael Hays tried to avoid talking about his job whenever possible. When the question inevitably arose, he said that he worked as a compliance specialist within the Treasury Department.
This was technically true. The Internal Revenue Service was within the Treasury Department, and an auditor could be thought of as a compliance specialist. This was Michael’s way of evading the slings and arrows that might otherwise come his way, while still staying on the angelic side of the truth.
Michael plopped into his chair and looked at the work ahead of him today.
First on the list were follow-ups to some letters than had been sent to taxpayers to ask for evidence of certain deductions. Many of the taxpayers had deftly shunted the letter on to their tax professional. Most of the tax professionals had written coherent responses and attached the necessary documentation.
Some of the others had decided to respond without the assistance of professionals. Several of them had done very competent jobs, allowing Michael to cross their names off his list as well. Several others had responded in a manner that made it very clear that they did not fully comprehend Michael’s request. Michael set these aside for the moment.
Next on his list was the dispute with Mr. Anthony Davis. Mr. Davis had taken advantage of an investment opportunity that was determined by the IRS to be a tax shelter. The amount was so small that Mr. Davis was getting minimal benefit from the shelter. Michael had the impression that Davis was simply trying to pick a fight with the IRS. Michael hoped that Mr. Davis would soon realize how foolish it was to risk jail time over this dispute.
The next batch of letters contained the interesting ones. Most of these were from the people who had ignored the W2s and 1099s that had been sent to them, under the firm belief that the IRS did not have the authority to collect taxes. The standard array of arguments arose from the letters. The tax system was voluntary, the sixteenth amendment was never properly ratified, the only people subject to income tax are employees of the federal governments. Some of the other letters involved disputes about bogus credits that the taxpayers had claimed on their returns.
Michael spent time carefully crafting his responses to these letters, citing the relevant case law in each situation. Michael was a bit surprised that so many people were still conned by quacks selling fraudulent tax evasion schemes. Time after time, courts had affirmed the authority of the IRS to collect taxes. So many frivolous claims had been argued, and so many had been dismissed by judges. The IRS had even posted a list of these arguments with details of the cases ““ but many of these people simply didn’t want to hear the truth.
The final letter on Michael’s desk was the most pleasant. A recent audit had tripped up a wealthy business owner who had used a variety of shell corporations and foreign bank accounts to evade taxes. Michael had eventually unraveled the mess, and the IRS had laid the facts out in front of the man. They offered a deal ““ pay the back taxes, plus interest and penalties, and the IRS would back down and not pursue a fraud case. Michael pulled the check out of the envelope and stared at the amount for a moment – $13,312,872.42. It was not uncommon to receive checks to settle disputes, but Michael was always happy to see such a large check.
Michael wondered where these dollars would end up going. The construction project near Michael’s home had been stalled due to a lack of federal funding. Perhaps now the road could be widened and the traffic lights installed. The current state of the road was not adequate for the volume of traffic. The changes would make it much safer.
Perhaps the war on terror could afford more advanced screening tools that would allow for detection of dangerous items that currently evaded the scans at the airport. Maybe this money would prevent a hijacking.
Michael was a volunteer at one of the Head Start programs in town. The program was always a bit short of funds. Maybe this money would allow these kids to be more prepared for elementary school.
Of course, Michael knew that this thirteen million dollars wouldn’t be earmarked for any of these projects. However, he also knew that actively pursuing all tax revenue legally owed to the government would allow a higher level of funding for many great programs. Michael knew that nobody enjoyed paying taxes, and realized that large amounts of federal funds were unfortunately wasted ““ but also knew that without the funds provided by income taxes, the United States would be a much worse place to live.[If you liked the story above… or even if you didn’t… I urge you to visit The Casual Observer and extol the virtues of the designated hitter.]