It’s almost spring, a time when we shake off the winter doldrums, dust off the hiking boots, fill our bosoms with hope as flowers begin to bloom, and have the profound realization, “I gotta do my taxes! Pronto!”
Yes. Just as we start to fill a renewed sense of optimism and hope, April 15 comes along to nip that buoyancy right in the bud.
Of course, even if you owe money, tax season doesn’t have to be a time for gloom and despair.
Who was it who said, “It’s an honor and privilege to pay taxes and I consider paying my fair share my patriotic duty”?
Oh, yeah, someone with a lousy accountant!
Because while most of us would agree with the above statement in theory, the reality is that, as a country, our attitude towards government services and taxes is similar to venturing into a big-box store. We want to Get More & Pay Less. And we walk in armed with coupons, aka deductions, so that we dispense with as little out of pocket as possible.
Well, I don’t know about this year, but there may be an opportunity to cough up fewer dollars on money you owe from past years. Because now that the economy has substantially recovered, the unemployment rate is nearing “full employment” status, and more people have money in their wallets, the IRS has decided that this is a great time to collect the dough it didn’t get from you when you, ahem, claimed you didn’t have it.
Yep. The word on the street is that the IRS is in the mood to make a deal. Its Offer in Compromise program, which allows wayward taxpayers to offer to pay a percentage of the actual taxes owed, has gone from an under 25 percent acceptance rate by the agency in 2010 to 42 percent in 2013. In that way, it’s kind of like Priceline for taxes: If you make an offer that’s accepted, your immediate reaction is not happiness or relief, but “Shoot! I bet I could have offered less!”
Still, according to Todd Unger, a New Jersey tax lawyer quoted in The New York Times, “There’s probably never been a better time to cut a deal with the tax agency.” The IRS has up to two years to accept or reject your offer, during which time it can review your situation to see if it’s improved. So if you make an offer to the IRS, the best strategy is to make sure your circumstances remain dire for the next 24 months.
That last sentence? Not actual advice. Just in case you’re wondering.
But the rest is true, and, as you might expect with anything connected to the IRS, there’s a bunch of small print and conditions (not to mention an application fee, because, as the old adage says, “You have to spend money to make money”). So don’t just stuff a wad of tens into an envelope addressed to the IRS with a note reading, “Here you go, bloodsuckers. Take it or leave it.” The IRS is a little sensitive about being treated disdainfully. A little boning up on the topic ahead of time is advised.
The other good news is that, while filing your taxes may not be more pleasant, the fact that you can do them on your tablet and even smartphone certainly makes it more convenient, which means that you could fill out your 1040 while reclining on a lounge chair at the beach. Although depending on your situation, I personally wouldn’t recommend calculating how much taxes you owe so near the vicinity of a large body of water.
Also, why ruin a day at the beach?
Or, put another way: taxes no longer have to be taxing.
IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.