Chronicle Report: The IRS Makes the Vulture Look Like a Hummingbird

by Minority Fortune

irsWith all the financial corruption and botched accounting books, there must be plenty to keep the IRS legitimately busy. So why are they going around auditing single mothers who live beyond the poverty line? A recent story was reported by AlterNet about a single mother of two with an income of $18,000 being audited due to suspicion. The accountant hired by the family explained the IRS auditor’s reasoning behind the probe:

“They showed us a spreadsheet of incomes in the Seattle area,” says Dante Driver, an accountant at Seattle’s G.A. Michael and Co. “The auditor said, ‘You made eighteen thousand, and our data show a family of three needs at least thirty-six thousand to get by in Seattle.”

“They thought she must have unreported income. That she was hiding something. Basically they were auditing her for not making enough money.”

Then it gets worse:

She had a yearlong odyssey into the maw of the IRS. After being told she couldn’t survive in Seattle on so little, she was notified her returns for both 2006 and 2007 had been found “deficient.” She owed the government more than $16,000 — almost an entire year’s pay.

She couldn’t pay it. Her dad, Rob, has run a local painting business, Porcaro Power Painting, for 30 years. He asked his accountant, Driver, for help.

Rachel’s returns weren’t all that complicated. At issue, though, was that she and her two sons, ages 10 and 8, were all living at her parents’ house in Rainier Beach (she pays $400 a month rent). So the IRS concluded she wasn’t providing for her children and therefore couldn’t claim them as dependents.

She stood to lose what is called earned income tax credit, a refund targeted to help low-income workers. You qualify only if you’re working, as Rachel has been.

The story goes on to get even worse. The IRS decided to audit her parents because they were determined that the household must have hidden income. It turns out that the parents were cleared but left holding a $10,000 accounting bill. Their daughter could no longer claim her children as dependents and had to pay back the year’s gains of $1,438 by claiming them. So, all of that trouble boiled down to an estimated $1400 in immoral and illegal gains for the IRS.

IRS Robbing the Poor

Thanks IRS for being a complete waste of taxpayer’s dollars. I’m sure you’ll be duly rewarded with a big, fat bonus from CitiGroup, Goldman Sachs, or JP Morgan. Oh, wait. You won’t be getting one. So, while you’re going around trying to audit small businesses and taxpayers with marginal earnings and scraping to find pennies, you could be going after the big dogs who hoard billions in offshore tax havens!

Then again, that’s where the real work would begin. It’s too easy harassing the middle and lower classes for money. It’s even easier to prey on the poor that straddle the poverty line. Instead of accepting the blatant dire poverty that exists in this country, you go out of your way to harass them and claim that they’re too poor to exist.

Rachel’s story is evidence that the IRS works against the common people. For a woman who needs the tax credits the most, she won’t be entitled to it. Yet, Bank of America, AIG, Exxon-Mobile, Haliburton, and other corporations can create tax credits out of thin air with no problem. Classist and prejudice much? This story serves as a wakeup call to the average American to sleep with one eye open because the IRS appear to be combing over regular Americans tax reports with a fine needle.

IRS, you really suck.

*Image courtesy of Thinkstock
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