Posted on 02/12/2004 9:43:23 AM PST by ancient_geezer
A slave for the IRS
Posted: February 12, 2004
I've got a problem, and I need a business Ann Landers with a social conscience. During the past four months, I've been working as an unpaid slave for the federal government. This happened because earlier in the year I decided to open a small business. The type of business is unimportant – it could be the same one you're working in or the espresso stand you frequent on your morning drive into work. Anything that provides a needed service and some gainful employment for area residents.
My servitude began with the arrival of a large white envelope from the Internal Revenue Service. It was followed by a similar-sized green and white envelope from the state tax collectors. My accountant helped me fill out the forms, for which he was well-compensated. Unlike me. I sent in the money, bought payroll software, hired employees and we were in business.
For those of you who do not have employees, payroll software is necessary to figure out how much of the salary you pay your employees actually can be given to them, and how much goes to the federal and state governments in the form of withholding, much of which you are required to match and then pass on without regard for your profitability. Think of "matching" as having a separate employee for each few you hire, one who never comes to work, never contributes anything, but has his hand out each and every month.
Being small, our servitude at first seemed modest. I only had to send off the money that I withheld – along with my matching amounts – once each month. Tax reports detailing the withholding must be filed quarterly. Not understanding these, and not having the time to both run the business and learn, I employed an accountant to calculate the amounts and fill in the forms, which I sent along.
During October, my servitude began in earnest. The accountant explained that he would soon have no time to help me with bookkeeping, so we had best get at it now. Invoices were tracked down and sorted, amounts and vendors entered into computer software, and books ultimately balanced to the accountant's satisfaction. That took the bulk of my day, several times a week, for three months. The accountant's bill for all this will likely exceed what is due in taxes.
Yesterday, I received a love note from the IRS informing me that although I'd sent in all the payroll taxes and the amounts were correct, I had mailed them to the wrong address, depriving the government of the use of the money for up to three full days. They never told me the "crime" for which I was being penalized; I spent a day figuring it out. For this bureaucratic travesty, I was assessed a 10 percent penalty. By my calculations, 10 percent for three days equates to 100 percent per month, or 1,200 percent per year. A tidy little interest rate that could only make the mob envious.
My accountant commiserated with me, wondering how I'd been foolish enough to think that I could actually send the monthly withholding checks to the same address where I sent the quarterly tax withholding reports and payments.
"No, they can't take the payments there," he said. "Best to deposit them at the bank." I suggested that advice would have been more useful a year ago. "You could always ask to have the penalty removed," he said.
Maybe. But I could also consider it a cheap education and do what much of the rest of American business seems to be doing. I could fire my employees, hire half of them back through an employee-leasing firm, and outsource the rest of my work to China, Taiwan or Mexico. Then I could dump the accountant and hire a tax lawyer to help me invest the savings and make sure the IRS never gets another penny out of me. What's your advice?
John Linder in the House & Saxby Chambliss Senate, offer a comprehensive bill to kill all income and payroll taxes outright, and provide a IRS free replacement in the form of a pure consumption tax:
H.R.25
SPONSOR: Rep Linder, John (introduced 01/7/2003)
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.S.1493
Sponsor: Sen Chambliss, Saxby [GA] (introduced 7/30/2003)
Title: A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.
So Ron Paul's amendment has a chance at enactment & ratification:
H.J.RES.15
Sponsor: Rep Paul, Ron [TX-14] (introduced 1/28/2003)
Title: Proposing an amendment to the Constitution of the United States relative to abolishing personal income, estate, and gift taxes and prohibiting the United States Government from engaging in business in competition with its citizens.
(But lets modified it to prohibit all income, payroll, gift estate taxes as HR25 calls for, or we will see European VAT style hidden taxes along with payroll excises to take over in the place of the of the current individual income tax(i.e. personal income tax) that Ron Paul amendment prohibits.)
When folks take four minutes to review HR25, they like it. And as they find out more, they wonder why it hasn't yet happened!
Well, it's time to make it happen with your votes! Support the candidate who supports HR 25. It works.
Just ask Bob Barr.
Well, it's time to make it happen with your votes! Support the candidate who supports HR 25. It works.
Like the following Congress Critter's & Wannabees In the News
Senate
House
Vernon Robinson running for North Carolina's 5th Congressional District
Payroll taxes must be either deposited at a bank or transferred via EFT. He should read the instructions next time...
No, as long as it's legit, and survives the tests. (Who sets the hours? Who determines the way in which the work will be done? Does the alleged sub-contractor bear risk of economic loss? Does he hold forth his services to the public? etc.)
Nay! L O N G past time in my estimation!
BTW have you two geezers met?
I agree with you on that point. Most people have no idea of the regulatory burden on business, because most people are employees. But both this guy and his accountant clearly dropped the ball on the payroll tax issue. The acountant should have noticed if the checks were made out to the IRS, and there was a delay in clearing.
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