Tax time is coming. If "Ding-Dong" is your motto, look out
for the IRS.
My mother got a call from the IRS on her cellphone awhile
back. She was on a 10-day vacation with three retired friends and staying
at the Best Western Motel in Padre Island, Texas. Of course, the Best Western,
with its high-priced rooms ($44.95 snowbird special with kitchenette) and
high-security enclave (Sheetrock and sliding glass doors), is a notorious
hangout for tax cheats and high-flying criminals.
At 66 years old, mom receives Social Security and other fixed
income from bonds. She has worked part-time as an Avon lady for 40 years.
Her gross income is low. Her taxes are small and completed by a local, professional
accountant. All of her fixed income is stated clearly. She is, I have found
out, a prime IRS target.
Syracuse University in New York houses a government watchdog
center, the Transactional Records Access Clearinghouse, which monitors the
IRS. TRAC is funded by nonpartisan, nonprofit foundations. On its website
(www.trac.syr.edu), TRAC reveals the
following three- year trends:
** The number of federal tax prosecutions is half of the average
of the 10 preceding years.
** Securities fraud prosecutions have averaged a total of
10 per year.
** Negligence and fraud penalties against corporations by
the IRS "have collapsed" and are now one-fifth of the preceding 10-year average.
** Small businesses are four times more likely to be audited
than larger corporations.
** Among the small business entities where fraud is most likely
to occur - partnerships, S-corporations and fiduciary trusts - the number
of audits is one-third of the preceding 10-year average.
** The total audit rate for individuals is one-third of 10
years ago.
** Low-income taxpayers earning $25,000 are just as likely
to be audited as higher-income taxpayers earning more than $100,000.
About these three-year trends, TRAC says that "criminal enforcement
is in shambles"; that there are problems with "corporate responsibility and
the Bush administration"; and that the IRS is currently "going after the little
guys."
Hmmm. Why my mom? The IRS randomly picks 1.5 percent of taxpayers
and then looks for "discrepancies" in the taxpayer's return and bank account.
In mom's case, discrepancies did exist. Here's the kicker: My dad died in
2001, and in 2002 my mom and I sold all of his accumulated stuff - his truck,
small airplane, motorcycles, and lots and lots of shop tools and toys. Mom
also sold their house and bought a condo in town. Money came from all these
sales, went into mom's bank account, and then into fixed-income bonds. The
IRS is auditing mom because she had "unusual activity in her bank account."
Her accountant explained this "unusual activity" to the IRS agent. "Sorry,"
the agent said, "the audit continues."
At first, mom was very nervous. The IRS agent told her she
needed a receipt with the name and phone number of the buyer for each of the
hundreds of items from dad's estate. She lives in a small town, and miraculously
after many phone calls and nervous days, she has most of this.
Now, mom's getting mad. The more people she talks to and the
more stories she sees on television about corporate scandals and Halliburton
kickbacks, the madder she gets. "It's stupid," she tells me later on the phone,
her voice rattling. "Surely the IRS has better things to do. It's like they've
been told to waste time auditing retired widows so that real corporate crooks
can get off scot-free."
"Mom," I say, "that's a ridiculous conspiracy theory. The
problem was that you were staying at the Best Western in Padre Island, a tip-off
for affluence and embezzlement. You should have stayed at the Motel 6."
"But they don't have kitchenettes," she shoots back.
"I know it," I say. "And so does the IRS."
I ask her another question. "How did the IRS get your cellphone
number when you were on vacation?"
"I don't know," she says. "I guess they got it off my answering
machine at home."
Mom got a cellphone so the nursing home could keep in constant
contact with her in case something happened to my grandma, who has Alzheimer's.
On her answering machine, mom has this message: "Hi. I'm not home right now.
If this is an emergency, you can contact me on my cellphone at .. ."
It certainly is an emergency, and reminds me of another one,
at the ballot box in November.
Ding-Dong, indeed.
_______________________
Gary Wockner (www.garywockner.com)
is a wildlife ecologist at Colorado State University.