June 6, 2013
IRS’ ‘return free’ bad for most vulnerable
As April 15 nears each year, American taxpayers take inventory of their income and expenses and hand over a year’s worth of detail to the Internal Revenue Service (IRS). Many of us utilize the expertise of accountants to prepare what will become a complex analysis of the many life happenings that impact the sum of the taxes we owe or our refund. Our financial lives are often inherently complex, and they become even more complex when they must be reported and evaluated according to federal and state tax codes. Tuition payments for our children’s education, contributions we have made to various charities and the cost of caring for our elderly parents are just a few of the deductible expenses that we communicate to our tax preparer. These factors are particularly relevant to our Jewish communities, where education, tzedakah, and caring for the sick and elderly serve as religious and cultural imperatives.
I am deeply concerned to learn about the IRS’ latest fight in Congress. The same federal agency responsible for collecting our taxes and issuing our refunds wants to be responsible for processing our filing information. This means that instead of communicating the countless details of our annual economics to accountants, the IRS wants us to hand over that information directly to them and await their response in the form of a refund and/or a collection notice. I devote several months to the process of filing my taxes. As a spouse, rabbi, homeowner and contributor to multiple charities, my tax-filing experience is loaded with nuance, and I count on the tremendous detail and accuracy of my preparer to assure that I pay what I owe according to law and not more or less than that. I cannot imagine a scenario where those specific factors become unimportant in a system so large and disorganized that it cannot possibly process my truly individual return.
As an ethicist, I look beyond my own experience and shudder at the impact this program will have on the most vulnerable people in American society. Lower-income, minority, senior, veteran and disabled people rely on their refunds more than anyone. I am blessed to be concerned about how my charitable contributions will be accurately processed, but there are folks across this city and our nation who rely on their tax refund to pay the mortgage, cover medical expenses, and even keep the electricity and water on at home.
The IRS’ proposed “Return Free” program proposes to experiment with its new concept on the lowest income bracket of our nation, guaranteeing that the fallout will impact those who need the most support. Many of the same individuals and families who will suffer as a result of being issued inaccurate refunds under this program are also the people who will encounter the most significant barriers in rectifying that unfairness.
If Congress allows the IRS to go through with this plan, I will likely have to hire accountants and attorneys to revise what will be an inaccurate return and then to get the IRS to accept the revisions. I am fortunate enough to have the money and knowledge to do that, but there are so many Americans who will never be able to repair the mistakes of the IRS. Language barriers, mistrust of government and centuries of discrimination will make reparation impossible for the most targeted and at-risk victims of this proposal.
What is the motivation of a United States federal agency to pursue such a flagrant conflict of interest as making the tax collector also the tax preparer? Doing so will compromise the accuracy and integrity of the American tax system and will, according to the Government Accountability Office, open the doors to the most frightening economic and privacy issues the United States has ever faced. As it stands, the IRS answers at least one in five tax-related questions incorrectly. As is stands, the IRS often returns error-ridden tax paperwork, with sensitive personal identification information, to the wrong address. With stakes as high as basic annual budgeting and the security of our private information, how could the IRS possibly imagine that they could handle the accurate processing of every single American tax return?
We need to contact our Congressional representatives to urge them to stop this IRS plan before it starts.
Rabbi Elliot Dorff is rector and professor of philosophy at American Jewish University.