CONLEY COMMENTARY (WSAU) – Let’s imagine that I’m the biggest tax cheat ever. I take deductions that I’m not entitled to. I inflate expenses. I report charitable giving that I don’t give. I lie about the profits and losses from my investment.
If I was honest, my tax refund would come to about $5,000. But because I’m an immoral cheat, I get a refund that’s double that. Shame on me.
But I’m not the person that IRS should be going after. Auditing the $5,000 tax cheat is a breathtaking waste of resources. The IRS takes in $5.3-trillion in revenue. Our country runs a $3.7-trillion dollar budget shortfall each year. So, a stolen $5,000 means… nothing. The only reason for such an audit is as a deterrent – don’t do it, you might get caught.
Now suppose another case. I never knowingly cheat on my taxes. I use a software program where I enter numbers and answer questions. And yet each year the questions are more complicated, and my taxes are more detailed. Even more-so this year. I have to account for mileage for my part-time job doing high school sports. When I drive to a game site, I’m entitled to 76-cents a mile. It’s legal, and I’ve been keeping track. But I’d still turn white as a ghost if I was ever audited.
That’s why I’m pleased to learn about the IRS’s Fresh Start program that’s being revamped for this year. If you are a regular filer and you pay on time, you won’t be subject to penalties and fees. The IRS will just send you a notice, “we’ve noticed you made a mistake on your tax return. You’re entitled to this much more, or less, and we’re adjusting your return automatically. There is nothing more you need to do.”
That is rare wisdom from our government. Most tax mistakes are honest errors. Just fix them and adjust refund checks accordingly. Even the penalties and fees amount to nothing to the government, and a whole lot to you and me.
Go after the big tax cheats. Leave the little guys alone.
Chris Conley
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