Log In


Reset Password

Tax freedom

Today's the deadline for filing your federal, state and local income taxes. After today, if you owe taxes, you will be hit with a penalty.

Of course, if you owe a lot of tax money, you will be hit with an under-payment penalty even if you meet the filing deadline.Next Monday, April 21, is Tax Freedom Day. But is there such a thing as "tax freedom"?Tax Freedom Day is the day when the nation as a whole has earned enough money to pay off its total tax bill for the year. Don't be confused. It doesn't mean the nation's indebtedness has ceased.Tax Freedom Day 2014 is three days later than last year.In reality, though, there's no such thing as tax freedom.First, even though Tax Freedom Day takes into account your federal, state and local taxes, people throughout the year pay sales taxes, gas taxes, exorbitant real estate taxes, excise taxes, phone taxes, occupation taxes, etc., etc., etc.Second, even if your taxes are filed, it isn't tax freedom. Filing taxes anymore has become akin to turning in a school homework sheet. Are the answers correct? Tax laws are so complex that you can only hope your filing is accurate; that you're not selected for an audit whereby your computations are challenged.Then there's the authoritarian power of taxing authorities at all levels.On the local level, last year countless senior citizens, who didn't have to file, got notices that they didn't file and would have to pay $25 penalties. Many of those same individuals filed this year, only to be told there's no need to file because they have no income. How many of those people paid their penalties unnecessarily last year? How many wasted money hiring preparers this year because of those belligerent notices?A Washington Post article mentioned how the IRS was confiscating returns from individuals, with no advance notice, whose relatives might have been overpaid Social Security benefits decades ago. In some cases, those penalized had no idea to whom the benefits were paid, thus being defenseless in the matter. An Associated Press article today says Congress has halted this practice.Tax practitioners are now faced with "due diligence" regulations, especially over the Earned Income Credit. Preparers are supposed to demand from their customers proof of residency for children in which the Earned Income Credit is applied. There is a long checklist of EIC requirements for preparers. The IRS can fine preparers $1,000 per return for improperly doing the paperwork. Instead of being mere preparers, tax practitioners are being forced to become enforcers.The IRS this year has created a policy whereby it will no longer answer legal questions on the telephone. Isn't any question related to your tax return a legal question since penalties can be imposed?Then there's ObamaCare, which is enforced by the IRS. Somehow, insurance and the IRS don't seem compatible. When you file your taxes next year, you'll find out the impact for sure.Tax Freedom Day?There's no such thing.By RON GOWERrgower@tnonline.com