Conflict of Interest, the American Tax Collector

irs-435cs091212By Raoul Lowery Contreras

Millions of Hispanic immigrants and American Hispanics who faithfully file income tax returns have access to free tax preparation through the efforts of private American business. Great news..!

Today, 16 private sector companies make their software available free to anyone to prepare federal tax forms and offer free electronic filing directly to the Internal Revenue service (IRS). Postage is unnecessary.

So why, are the federal government and IRS trying to screw this up; by converting the IRS from tax collector to “free tax preparer?”  More government payroll, more bureaucrats for programs the government can’t make work. The IRS program of “Ready Return” California’s IRS pilot program cost $211,000 to produce tax returns for just 11,500 people. This cost fell directly on taxpayers.

What’s the saying that always makes me laugh and cry at the same time; “I’m from the government and I’m here to help you!”

Holy cow, what is the country coming to, a government that we have to deal with 24 hours-a-day, seven-days-a-week? For many Hispanic Americans that could amount to a full-time job.

There are two methods for less-than-average income Hispanics to file free tax returns now. They can use the free software provided by the 16 companies (like Turbo Tax) on their family computers or, they can go to a local “notario’s” office (In Latin America “notaries-notarios” help people fill out government forms, write letters and deal on behalf of their clients with government agencies) and have tax forms prepared on the free software for a small fee to the “notario.” Every Hispanic neighborhood in the country has “notario” offices that do tax returns. They are neighbors, friends and people to count on for help filing government forms.

If the government has its way, “free” tax return preparation by the IRS tax collectors would eliminate many of these small business offices, the local “notaries.” Neighborhood “negocios de madres y padres” – mom and pop businesses will disappear..

That is at the local neighborhood level. On the federal level, the government would have to spend billions of dollars it doesn’t have to upgrade outmoded computer systems to handle an assignment being currently handled for free, “para nada,  gratis” for nothing by the private sector.

Worse yet is the miserable IRS record of accuracy and ineptitude. The Government Accountability Office (GAO) released a 2012 report stating that 69% of the IRS’s previously noted security flaws remain unfixed and continue to jeopardize the confidentiality, integrity, and reliability of IRS systems. The GAO also states that the IRS answers 1 in every 5 tax questions incorrectly.

To top this ineptitude the IRS just plain screws people over. Example: One year I made a ton of money and had huge taxes withheld. Using a Certified Public Accountant (CPA) I filed a complete multi-page return on the first day in January I could. I had a huge refund coming from overpayment. Within days we received a letter that all was in order and a refund was forthcoming “immediately.” I left on vacation and was shocked when I returned to find an IRS letter stating my refund would not be sent while the IRS checked to see if I had any other tax obligations. That was with me using a tax expert.

Can anyone imagine how an agency that can’t give 100% correct answers and is rife with security flaws will handle millions of new and low-income Hispanic taxpayers?

Look at our cousins in Great Britain. The United Kingdom’s government’s filing program has been plagued by technical and operational failures, and British taxpayers have faced security breaches, overpayments, lost tax notices and countless delays in returns. Flustered British authorities are looking to our system of private companies offering free tax preparation ability in the home.

The issues here are clear for all Americans.

For new Americans and for those who can’t afford tax preparers with initials after their names, free tax preparation offered through public/private partnerships is a great opportunity. It is far superior to a federal government that can hardly process a few hundred thousand immigration applications and carries immigration backlogs for up to twenty years. Or that has only an 80% accuracy rate in answering questions from taxpayers. Or holds on to taxpayer refunds whenever it wants and is, in the final analysis, out to collect maximum taxes, not to calculate maximum refunds for its “clients.”

The only “client” of the IRS is the federal government, not the taxpayer – the Hispanic small business owner or otherwise whether low-income or rich.

“I am from the government and I am here to help you!”

Leave a Reply

Your email address will not be published. Required fields are marked *