Maybe you have a dozen credit cards in your wallet. Maybe you have none. But if you owe the government money, and especially if you’re a small business, I’ll be you didn’t know you have one labeled IRS. It’s true. No, it’s not a physical card, but thanks to our wonderful legislature, the IRS uses the same usurious practices that credit card companies do in order to generate even more revenue than the tax code originally authorized them to collect. Even more troubling is the massive increase in the IRS’s uncompromising use of collections tools at a time when tax payers can least afford it.
According to testimony in April 2011 by National Taxpayer Advocate Nina Olson, before the House Committee on Small Business, from FY 2006 to 2010 (i.e. the heart of the Great Recession) IRS Notices of Federal Tax Liens increased 55%. Actual liens increased a whopping 172%! (Footnote 74, page 21—pdf) The scary part is, once taxes become delinquent, the IRS is authorized by Congress to charge A) late fees, B) interest, and C) for every ‘breech of agreement’, a penalty. Tactics eerily familiar to those who’ve had to deal with credit card companies.
Is this fair? Is it right?
Is it right that even though unemployment is higher that at any time since the Great Depression; even though home foreclosures are higher than they’ve ever been in our nation’s history; even though construction related unemployment, many of whom are self employed small business (contractors), is at 34%; that according to Reuters, in FY 2010 the IRS accepted only 13,886 offers in compromise and “just 95,000 installment agreements on business-related tax delinquencies, which typically involve small-business taxpayers?” Is it right that “less than 4 percent of the delinquent accounts were reported [by the IRS] as noncollectable due to economic hardship?”
One would think that, given the historic nature of the hard times in which we find ourselves, and given that both the Congress and the President want to see more jobs created, that both the Executive and the Legislature would suspend the fines and penalties and other usurious practices they have authorized the IRS to engage in. One would think they would be instructing the IRS to be as flexible as possible in working with citizens who wish to do their part for their country, but find themselves on hard times. As Olson said: “The government needs to offer a taxpayer who cannot pay in full realistic options to pay what he or she can, so that voluntary compliance is practical.”
Unfortunately, practical and greed don’t mix, and our government’s appetite for money is nothing if not insatiable. Apparently that means damn the little people who get hurt along the way.