The taxman in sheep’s clothing

Geof wollerman
gwollerm@mscd.edu

   When I first heard about taxes—at around the age of seven—my initial reaction was they’re unfair, and I’ll never pay them. As I grew older, I began to realize that taxes are an inevitable, necessary evil: they provide services we take for granted (and many we’re not aware of), and we have to pay them.
   But, who will know if you don’t pay, you ask? Isn’t the IRS too busy to pay attention to little old me? Isn’t the IRS more of a deterrent? Think again, wage earner. According to Jeff Schnepper, writing for MSN’s financial Web site, the IRS has been offering sizeable bonuses since the 1960s to those who are willing to rat on their tax-shirking neighbors.
   According to the article, every year the IRS “collects more than $100 million (in unpaid taxes) and pays out from $2 million to $5 million to snitches.”
   Is this program just government-sponsored harassment, or is it actually benefiting the IRS? Schnepper, referencing a report by USA Today, states, “In 2003, the IRS paid out $4 million to informants who helped the IRS pursue 190 cases, which together recouped more than $61 million in taxes.”
   You might say, “Yeah, OK, but who are these people secretly working for the IRS? Certainly no one I know.” Unfortunately, they might be closer to home than you think. According to the Associated Press, “more than three out of five people surveyed by the IRS Oversight Board,” said tax-cheats should be turned in by their neighbors. In Las Vegas, three out of five is pretty good odds—only this is in favor of the house.
   Tax evasion is a major problem. Schnepper points out “the IRS estimates that the gap between taxes owed and taxes paid is $127 billion.” Or, to put it in perspective, two-thirds of running the war in Iraq—every year.
   For anyone tempted to turn in a tax-evader, just remember all rewards given out by the IRS are considered taxable.
   As if worrying about your neighbors weren’t enough, the IRS announced in 2004 that it will outsource tax collection to three private firms—firms guaranteed to be more diligent than the government in coming after you—especially with a 25 percent commission for successful collection. In an online article by tax journalist Kay Bell, she reports, “the IRS argued that such outsourcing would involve primarily uncontested tax debts and it would free up agency employees to more aggressively pursue more egregious, and richer, violators.”
   “ When all is said and done,” Bell continued, “the IRS expects private debt collectors will bring the U.S. Treasury an additional $1.4 billion in outstanding taxes.”
   Don’t sweat it. (Well, unless you’re cheating on your taxes). Volunteer Income Tax Assistance (VITA), is offering free tax service for anyone earning less than $35,000 a year. But, time is running out. The last days to receive the assistance will be April 4 at the Emily Griffith Opportunity School, and April 11 at Auraria Campus in the Tivoli Student Lounge.
   The VITA staff can help you determine what you owe, or, hopefully, what the government owes you. They’ll and even file it for you—for free. Services are open to any resident, nonresident and international student who made less than $35,000 last year. Remember to bring a valid photo ID, W-2s and a Social Security card, a copy of your prior year’s tax return and bank information if you’re looking for a direct deposit on your return.
   America may have been founded by a bunch of rich white guys who didn’t want to pay them, but taxes have made America what it is today.
   So, leave your calculator at home and make your way down to a VITA station near you before April 11, and before your neighbors get suspicious. You might think you’re safe, but the call of cash can often trump the tenuous relationship between a tax-evader and his one-time nosy neighbor.