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Kasi’s Korner: Paying your fair share
April 15, will be rolling around in no time. Tax forms, information, tables and booklets are floating around most American homes by this time of year. Now I’m sure that you all pay your fair share of the tax burden. You report all the tips, cash payments and actual gains you make as an individual or sole proprietor. What is amazing is something I heard the other day on the tube. The amount that people don’t report, mis-report, under-report and just plain don’t pay in taxes, if paid, would reduce our national debt more than significantly in a year. Of course, with the usual timetable of government entities, the most recent year that the I.R.S. has figured as to how much taxpayers didn’t pay is 2001. Don’t ask me why, you would think that by 2006, they might know what didn’t get paid in at least 2004. But that’s the government. In 2001, taxpayers should have paid an additional $345 billion in taxes. Now they say that that falls at the high end of what doesn’t get paid each year. In other words, they figure that taxpayers will cheat them out of between $312 and $353 billion every year. They also believe that of individual tax payers, those making more than $100,000 per year are the ones that, well, let’s say underpay the most often. Now the I.R.S. are putting more new and revised enforcement activities to catch even more of those who are trying to keep a little too much in their pockets. They recovered about $55 billion in un- or under-paid taxes for 2001. (By the way, they seem inordinately pleased about that tiny amount when it seems to me they only collected about 16 percent, the way I figure it. According to their Web site, that’s a 20 percent improvement over past years!) In addition, a press release states, “The amount lost due to complex international transactions engaged in by corporations and wealthy individuals is unclear and could be much greater than IRS estimates suggest. The Tax Justice Network (a coalition of researchers and advocates that campaigns on behalf of better enforcement of tax law by governments) gauges the extent of wealth outside the view of tax authorities at over $11 trillion.” Now I have always tried to find every single deduction in my tax that is legal, they expect you to do that. I don’t believe I have ever taken any extra amounts. I also have not been audited. (Whew) But I know those who have. It is not as unpleasant as you might think. So I should say here that they are increasing audits this year by 20 percent. Another thing that is interesting is that there are a lot of folks who don’t file that have money coming back. For instance, this is the last year that you can file for your 2001 tax refund. You have until April 15, 2006. In Minnesota there are 22,900 people with $24,842 in refunds available. The I.R.S. says that the average refund due to Minnesotans for 2001 is $484. There is more than $2 billion that are unclaimed for 2001. The unclaimed funds are taken over by the government.