Thursday, April 19, 2012
This is an editorial on the IRS (that's the Internal Revenue Service for those of you who don't pay taxes).
As a self employed business owner I am required to make quarterly estimated payments to the IRS for taxes on income that I may or may not have earned. This includes both the employer and employees parts for Social Security which is called self employment taxes. The government wants to be sure to grab my money whether I have actually earned income or not.
Those who work for me are sub-contractors, which also qualifies them as self employed businessmen. This means that they must also pay their taxes the same way I do. I am therefore exempt from paying their taxes because they are not my employees.
However, the IRS is now using a new tactic to collect taxes that are owed. Two of my sub-contractors have neglected to pay any of their Federal or self employment taxes. The IRS has now sent me tax levies for each of these sub-contractors expecting me to withhold any future payments to my contractors and sending it in to the government. So they figure that by sending me a bill for $28,300 for someone else's taxes that I will do them the big favor of somehow coming up with the money for them. These tax bills go back to 2008. This prompts me to ask the question as to why they didn't go after these business owners earlier.
Anyway, One of the contractors I was able to call and he called the IRS and got set up on a payment plan. I got off the hook on that one. But this recent one for $28,300 I am unable to do so because the contractor hasn't subbed for me for over two years. I don't know where this is going to go.
But here's the point(s). First of all, by garnishing someone's contract pay I am putting the safety of myself, my wife, and my property at risk. Obviously the IRS doesn't care about that. They're all about the money and they have no conscience. Secondly, I do not believe that they can legally require me to collect another businessman's taxes. Thirdly, all of the tax preparers that I have talked to agree with me and say that this is simply a method of intimidation.
The last point is probably the most important point. Our government has shifted from being "for the people" to a government of "penalties and intimidation." They are all about the money to keep themselves running. If there is a fourth point it is this: The taxes that we pay are intrusive and overbearing. Lower tax rates would lead to more willing tax payers. Lower taxes would stimulate the economy. I know one thing for sure.... I'd be building more decks, installing more doors, buying more materials. The government doesn't care about that. They just want more money to pay their salaries so that they can upgrade their own houses. They don't care about your house.
My advice. Abolish the IRS. Go to a system where everyone pays taxes (40% of Americans don't). A consumption tax is fairest. Basic necessities exempt, and that doesn't mean beer and dog food. Eliminate the Federal tax on gasoline; low income people have to go to work, too. Create a 12 step program for IRS workers as they withdraw from their addiction to government checks and integrate into the world that the rest of us live in.
Still committed to crazy advice (although this advice is not so crazy)