I sent the following to a client who was asking if I would have their 2003 tax returns finished by the 12/15/04 extended due date:

I am hoping to have your returns done by the 15th.  If not, I’ll file another extension.

I hope you’ve had a chance to catch the recent info on my blog about why it is so important to take our time to do the original returns as perfectly as possible.  IRS has started a policy of opening full blown audits on anyone who files an amended return requesting a refund.  This has changed my mind set that just getting a tax return in on time is fine because we then have three years to correct any mistakes.  With this new IRS policy, we really only have one chance to get it  right. 

One of the big reasons I have been running so far behind with 2003 tax returns is the fact that I have had to work on audits that started from very basic amended tax returns, and IRS decided to go on fishing expeditions into other years and issues that weren’t even part of the amended returns themselves.  I am doing my best to protect all of us from having any more of these occur.

Kerry

I also added the following to be printed on the cover letter that accompanies all 1040s I prepare.

Please review the enclosed tax returns closely and notify us if you find any significant errors before you send the returns in.  It is in all of our best interests to make sure the original tax returns we submit are as close to perfect as possible because IRS has recently started a policy of initiating full blown audits of any person who files an amended return requesting a refund.  This has changed the mind set that just getting a tax return in on time is fine because we then have three years to correct any mistakes.  With this new IRS policy, we really only have one chance to get it  right.

As someone who has been advising people for over thirty years as to the futility of trusting in the Social Security system for our retirement protection, I got a kick out of the quotes from California Congresswoman Nancy Pelosi (aka Miss America) as played on Rush’s show yesterday. 

 
PELOSI: There are those who set out to undermine Social Security and one of their tactics was to introduce privatization of Social Security, introducing these private accounts. I have questions about them, but as I said, I’m willing to go to the table with no preconditions. You know what the right wing of our country did on this subject. About a generation ago, in their interest to eliminate Social Security, they developed an age warfare. They undertook a multi-multi-multi-million dollar initiative to convince young people that they wouldn’t see a dime of Social Security [sic].

I never considered myself to be part of any conspiracy.  I have just been stating the black and white facts as a financial professional.  As I’ve mentioned on several occasions, I can still remember the financial analysis we did of the Social Security program in my very first accounting class in college back in the Fall of 1973.  It was proven to be a terrible investment back then, and all of the changes made to the system since then have made it even worse.  It’s no conspiracy. It’s just the truth.  As I’ve long said, any financial pros who advise that their clients pay in as much as possible to the SS system and don’t help them use the many legal methods of avoiding flushing money down this rat-hole are guilty of professional malpractice.

Rush explained it very well:

“They undertook a multi-multi-multi-million dollar initiative to convince young people they wouldn’t see…” You know who figured this out first? The young people! When they get into the job market and they start to see what their FICA deduction is and they start adding things up and Ms. Pelosi, this is not a multi-multi-million dollar effort. This is one of the cheapest efforts in the world. It’s called “the truth.” It’s un-fundable now. People paying into Social Security are not getting their own money back; they’re getting the money paid by current taxpayers. Now, let me give you the numbers. Right now, it takes the payroll taxes of four workers in this country to provide benefits for one Social Security recipient. It used to be 12. It used to be 15. It used to be that no taxpayer had to fund a recipient’s Social Security because his own contributions came back to him. But that ended years ago when the numbers of workers and retired got to a certain level where there were more retirees than workers and bammo! The truth is the truth. Right now the burden of providing benefits per beneficiary is four workers. In 20 or 30 years, without changes, that burden is going to be down to two workers.

A Republican Senator pushes Social Security tax increases – Attack of the RINOs