Other than actually owing nothing abroad because the sums are so small, I do get an insight into tax filing practices in Sweden and Denmark. The tax forms of both countries consist of a single sheet of paper. No, they dont say: 1) write down everything you earned, and, 2) send it. They do have high rates for those who earn enough to pay, but thats another story.
Every year we go through the same routine with the IRS. Since I am the president of a struggling, miniscule corporation and have a losing business, I have more forms than the usual 1040EZ return to fill out. There are schedules A & B, C, D and E. Theres even a fiction the IRS has for a Foreign Tax Credit, a 1119, but by the time you go through all the arcane formulas it turns out the credit is zero anyway, so unless you are a puzzle freak its not worth the effort.
Even with a Ph.D. in language and literature and a work record of teaching technical writing (not accounting), the IRS instructions could as well be written in Sanskrit.
Convinced that the companies that are paid to prepare your taxes are in collusion with Congress and the IRS to make filing taxes so difficult that you have to provide them with lifetime employment, I refuse to hire them or buy the tax software. The result is that every year I make mistakes. Ah, well, its to be expected. The loyal civil servants at the Internal Revenue need me. I provide them with employment leading to hefty pensions. Like the old Smith Barney TV ad, We make money the old fashioned way: we earn it, I insist that the IRS earn their money by recalculating my returns.
These are not frivolous returns, mind you. I do my best, at least as well as the rest of the 50% of the American adult population which is functionally illiterate.
So last year when I filed for my refund, I miscalculated again. The IRS ran the numbers and decided that I had asked for too small a refund. They sent more money than I asked for. Then someone else calculated it again, and sent me another $22. I thought that after being reviewed twice I was done.
Ah, silly me. Now someone at the IRS has decided that I left something out and they want another $4,700; this on an income so small Im too embarrassed to reveal it. Its incredible. Seems I didnt say how much the purchase price was of the stock my mother gave my wife about 30 years ago. All we know is that the sale netted us a capital gain of $11. Thats taxed, if I understand this correctly, at 15% as a long term capital gain. Thats $1.65, hardly worth the time it took the clerk to point this out.
Two other investments lost us a total of $653.27, which is more than my 2006 total income tax before this new bill. So how can I owe $4,700?
Its beginning to smell like harassment.
I always invite the IRS to come and audit, bring a fishing rod, and plan to stay a few weeks. They wont collect any more money than I already paid, which this year is nothing, but they will be paid handsomely for their time, be provided transportation and per diem, and if they buy a Michigan license may legally catch some fish in season.
And of course if it is harassment, theres always our congressman to write and the head of the IRS and the civil service commission suggesting that the nasty persons find other, more gainful employment. Blackwater pays a hefty salary for those mercenary security jobs in Iraq. Of course, in those jobs, instead of getting office paper cuts, you can get your head blown off. To each his own.
Some people do the New York Times crossword. I do my taxes, but never get them right. Ah, well.
Now, whats your tax story?
Harley Sachs writes the Express ‘Technology‘ column.