Vintage 1960s Era Film Shows IRS Defending Its Use of Computers 146
coondoggie (973519) writes "It's impossible to imagine the Internal Revenue Service or most other number-crunching agencies or companies working without computers. But when the IRS went to computers — the Automatic Data Processing system --there was an uproar. The agency went so far as to produce a short film on the topic called Right On The Button, to convince the public computers were a good thing."
Re:Uproar? (Score:0, Interesting)
Maybe something to do with my beef against Mitt Romney (speaking as a MA resident).
As Governor, he made the trains run on time (e.g. I'm obliged to file my MA taxes online on pain of a $100 penalty),
but in totally the wrong direction - he increased spending on, well, crap; and corrupt crap at that.
(Don't get me started on Romneycare which has doubled my premia since inception: thanks cronies.)
So, what people were bitching about in the 60's was probably that effort should have been spent to cut taxes, rather increasing the efficiency of collection.
Save your breath now: just stock up on ammo and wait for the implosion.
Re:Uproar? (Score:5, Interesting)
Re:I guess they were wrong (Score:4, Interesting)
I do taxes professionally for part of my income, and it's a mix of personal or estate returns and corps, up to a couple of companies with 500+ full time employees.
The tax code is pretty simple for many people, but I certainly would not say the vast majority of either individuals or small businesses. I can make quick, easy money by examining a few typical returns done on a free website or $ 39 software. About 6 out of 10 will have done something wrong or missed something entirely. That's higher than the industry average reported (which is about 33%), but I'm presorting by cases where the person has either a schedule D, E, or F, or got a K1. I could probably find significant mistakes on 45% or so of the self filed Schedule A's or EITC forms out there, but those are usually dealt with by people who have only been with the firm I work for for a few years before I ever see them.
Three mistakes I see that can have extreme consequences are:
1. people filing schedule E for rental property and thinking amortizing the property is optional (yes, it is technically optional as the tax code is phrased, but if you don't do it, the law wiill treat it as if you did, and 'recover' some of the money you never got in the first place. when you sell the property - it's 'optional' in the same sense as a parachute is optional in skydiving). I also see the vast majority of people who have other things than rent to report on an E (authorial royalties, natural gas wells, and such), have absolutely no idea what to do.
2. people filing a schedule D for sale of stock. The minor mistake about 50% of the self filers make is to spend up to 30 hours or so filling in tons of individual lines for each transaction - almost nobody who isn't a pro knows how to report groups of transactions the way the IRS wants, and the personal software will gladly let you type in every single entry from a typical 15 page brokerage statement manually if you want. By they way, I have heard from IRS agents that going to all this extra trouble increases your chance of an audit - they figure that anybody giving them all those details just might be trying to hide something among them. The major mistake is not knowing the difference between long term and short term and/or covered and non-covered transactions, and all those things that are not sales of stocks but involve capital gains and so get reported with stocks. And I have never, ever, not once in my career, seen a case where someone got a K-1 that led to an entry on schedule D, and they got it right filing with Turbo-tax or similar.
3. Schedule C for self employed income. I see people getting a 1099-Misc with some other box than 7 filled in and thinking they have to do a C, all the time. I also see young people who get paid with a 1099 that does require Schedule C for the first time and think it's basically just like a W2 and report it that way. In both cases, this puts the person in a mess immediately, because if self employment taxes get done wrongly that means the IRS and the Social Security administration both have issues with the filer, and any corrections have to propagate to both agencies before it is really fixed. I've seen way too many cases where someone spends months or even years paying off their self employment taxes, gets straight with the IRS, and then 5 years later the person gets injured, needs to collect disability and, finds out they never got credit with the Social Security Administration for working some years, and so are considered not elligibile. But the biggest mistake I see on Sched C is people claiming meals when they don't travel outside their local area or entertain clients - that happens way more often with young people new to the construction industry, than most people think, and the IRS treats every case like the taxpayer is a con artist and couldn't possibly be really that stupid. (And there's no polite way to put it, but a lot of these people are). The IRS also tends to treat this error as though the taxpayer thinks the IRS agent
Anecdote: you're wrong about the IRS... (Score:4, Interesting)
Turns out I was due a two hundred dollar refund that year. The IRS had a check in my hand within a month for over three hundred dollars - even though the error was entirely mine, my money earned interest while in the government's coffers. Upon detecting my error, the IRS promptly corrected the situation in accordance with their rules.
A tiny, anecdotal example: but I have to say that the IRS is, on the whole, honest. What they do may (IMHO) be offensive, but the agency itself is merely an aspect of the current US Government. It is not inherently good or evil by itself. Closing caveat - this is a personal anecdote, your mileage may vary, past performance should not be taken as an indicator for future performance, etc.