Tax Guru – Ker$tetter Letter

IRS Gives Out Free Money

When there is an accurate way to do something and a haphazard way, you can be sure that the government geniuses will pick the sloppy way. Their track record is almost perfect in this regard.

The upcoming tax rebate could be handled in the proper way, which is to allow the appropriate taxpayers to apply the credit against their tax when they prepare their 2001 1040s. That way, only the people who are entitled to the credit will receive it.

The other way, with much better PR value, is to just send out checks to everyone who could conceivably be entitled to the credit. If it turns out they shouldn’t have received it, consider it a gift. As this article describes, they are already expecting, before sending out the first check, as much as $1.5 billion of erroneous rebates to be sent out. Again, historically, when they are predicting a lot of mistakes before even starting a project, you can be sure that the final result will be much worse.

I realize that IRS has been working hard to project its new kinder & gentler image to replace the old Gestapo one we are all so familiar with. Maybe I’m old fashioned; but just tossing away $1.5 billion dollars willy-nilly seems wrong to me. There used to be a time when a billion dollars was considered to be a lot of money. However, with the ever increasing size of the central government, that is now considered a drop in the bucket and we shouldn’t be concerned about it.

I realize it’s a bad character trait I have, but I can’t stop thinking about the people who paid in the $1.5 billion that IRS will be throwing way. Am I off-base here? Just remember these IRS gifts whenever you have to send them a check. Maybe your blood pressure will go as high as mine is right now.

KMK