What’s All This Then!

On Friday, I listened as Michele Norris of NPR interviewed you, Mr. Obama. As you spoke of your noble plan to tax more money from those greedy oil companies, I couldn’t help but to be moved by your eloquent words. Actually, my car moved me. I was just enthralled by your ideas as I traveled along the road. I drive over a 100 miles a day to and from work. Naturally, I would love cheaper gas (and not just the kind you get from fast food). So, go get ‘em, Mr. Obama … I think … well, that was my mistake — to think about your ideas.

Your interview left the impression that oil companies aren’t taxed at all. Yet, I know that our thrifty governments already take almost 50% of the oil companies’ earnings. So record profits mean record revenues for you and your congressional cohorts, don’t they? Yet, the way you talked made me wonder if you guys have already squandered this year’s oil tax windfall. I realize that you made the list as one of the top pork spenders in Congress. But this isn’t one of those types of lists to be proud of or to remain on.

Let’s look at this little audacity of hope, shall we? According to the Tax Foundation, Exxon earned over $20 billion in the first quarter of this year. Out of that, government took over $9 billion. Then there is all the additional sales taxes, excise taxes, severance taxes, and property taxes that Exxon had to collect from motorists on behalf of our lawgivers — which worked out to $20 billion more in tax revenue. All-in-all, for $1 in after-tax oil profit, you politicians took almost $3. WOW!! And yet, Mr. Obama, you want to take more? Who’s being greedy? Kind of like the pot calling the kettle black. Or in this case, the candidate calling the oil … well, you know.

Have you forgotten that those evil oil companies take some of what’s left of their profits and pay investors — in other words, my lowly 401(k). Given Congresses’ wonderful management of the Social Security system, I’m going to need every penny of that 401(k) when (and if) I retire.

So, Sir, I’m not sure of your noble desires to relieve those ill gotten record profits from Exxon and the like. And when you put those billions of dollars into more bureaucratic programs, I’m not sure that the pennies that somehow trickle down will really benefit us poor folk of America.

Hmmmm, here’s a thought: do you think you and Mr. McCain can first put a stop to the wasteful spending that you boys and girls are doing in Congress before trying taxing the rest of us into poverty?

… sort of. What happens when the government owes you your overpaid tax money and they don’t get it to you in a timely manner? No, your congressional representative does not send you flowers and a thank you note. Better yet, you’re entitled to interest on your money. According to the internal revenue service’s “Notice 746″, they are supposed to pay you interest at the same rate as they charge when you don’t surrender your money to them in a timely manner. The rate, compounded daily, varies from year-to-year. Over the past decade, it’s been between 4 and 8%. But what the rules say and what the irs does aren’t necessarily the same thing. Surprised?

Back in 2001, the irs made a slight mistake and took $12,000 more from me than they should have. Thank goodness, they are so conscientious about righting wrongs. Otherwise, I wouldn’t have been fighting to get it back ever since. Oh what! Yes, I have! You would think that the interest on this financial faux pas would be a good chunk of change (almost $6,000 by my calculations). Instead, last month I finally received a check as an interest payment for … wait for it … almost $600. Yesterday, I received another letter from the IRS. But instead of another check for interest or the rest of the money they still owe me or a dinner invitation, they graciously had sent a 1099 form. In other words, they want me to declare the $600 as income so they can tax that as well. It’s as if they said, “Sorry about holding onto your money for so long and making it difficult to get back. But you know that pittance we sent to you last month? We want some of it back! Got to pay off that trillion dollar deficit somehow.”

You know, if I had put that $12,000 in a bank at 3% interest back in 2001, I would’ve earned over $2700 by now. In that case, I could understand the government wanting to take its cut of my money. Yet, how can they take money that they owed me to begin with? It’s not like I willingly gave the irs $12,000 to hold for me as an investment. (And I’ve made some bad investment decisions in the past.) So I don’t understand how the scenario is even possible. The worst part about all of this? I don’t really seem to have any recourse in this matter … unless somebody out there knows otherwise. Maybe I’ll get luck and they’ll put me on the “Jelly of the Month” club — this month’s flavor: KY.

Yes, I know ‘irs’ is supposed to be capitalized. I tend to capitalize what I respect…

I started writing this post last year. Now that the political races are underway, I think that I better finish this in time for that wonderful night of the year; that magical time when you throw safety to the autumn winds and purposely send your children out to take candy from strangers. (For some harangued parents, they are just hoping to tempt fate with their angelic brats.) That’s right. I am suggesting that you take the Halloween experience and use it to teach your loving children a lesson on the toll that taxation will take on their lives. You’re probably thinking that this is a job for teachers. But don’t forget, there are many teachers who think that you’re not paying enough in taxes already. So it is up to you to prepare your offspring for the harsh realities of the working world.

When your little monsters (of course I’m referring to after they have taken their costume off) arrive home with their large bag of candy — take-home candy as it were — sit them down in the middle of the living room floor and pour out their loot in front of them. Give them a few minutes to salivate over their hard earned treasures. Just as they achieve maximum drool, let the lesson begin. Immediately take almost half of the candy from them. Tell them that this is what adults politely call income tax. Next, let them know that you care enough to want to watch out for them in their old age. Take away another large share of the candy as social security tax. Tell them that you will put it away for when they get too old to go trick-or-treating. In 50 years or so, they can get it back. After the thought of eating 50 year old candy sinks in, fess up to them and tell them that it’s actually for granddad. To get them to stop crying at this point, be sure to reassure them that they might have grandchildren someday who will also be taxed into this coercive charity. Finally, when you take out portions for Medicare and for state taxes, there should be only one candy bar left. If possible, make sure that it’s a Payday candy bar. As you start to hand it to them, pause and then unwrap the bar. Take a bite, say “sales tax” and hand it to them.

Of course, this little lesson may have repercussions when Halloween rolls around the next year. You may find your children sitting around the house on that festive night. When you ask if they are going treat-or-treating, they may reach their grubby little hands into the candy bowl, scoop out a large handful of treats and say, “Nope, I’m on the Halloween welfare.”

Almost $12,000! At least that’s my estimate right now. I don’t know how I missed this, but yet it happened. My CPA was supposed to be taking care of this. But this time last year, I was finishing up a five-year divorce battle and a major down and dirty with the IRS. Somehow this detail got lost in the avalanche of events of this past year. That is until today.

To get my freedom from the wicked witch of the West, I had to over-pay the IRS. My CPA assured me that he would be able to get the money back and pay my 2005 tax bill. Here I am a year later. My CPA forgot or lost track or is incompetent — in any case, I never got my money back. The tax bill is waiting.

So in February I went to the bosses of the IRS — Congress. I wrote to my peeps: Richard Burr, Bob Etheridge, and Elizabeth Dole. Apparently, I matter to Ms. Dole only during election time because I haven’t heard a single word from her. On the other hand, Mr. Burr and Mr. Etheridge immediately answered my correspondence.

Today I received an interesting package from Senator Burr. It contained my tax account transcripts and a letter from the IRS to Senator Burr. The letter basically said they were sorry that they overcharged me but that they were within their rights to keep all the monies. So I spent the day going through the transcripts. Not only did I find where they did not credit a couple of my payments to them, but I also discovered that they mistakenly keyed in my 2001 return. I had brought this matter up to my CPA two years ago. He said that he would take care of it and I trust him to do so. If he did so, no one in the IRS took care of it. That in itself is a $12,000 error in my favor. I’ve also learned in this fight with the IRS that, not only can they charge you interest, but they also have to pay you interest on money they don’t refund in a timely manner. If they follow their own procedure, I will be a very happy man. Of course, if they had followed their own procedures to begin with, I would not have begun a battle with them 10 years ago. Oh well, you know the creed of tax collection agencies everywhere: “if we can bring one little smile to one little face today — then somebody slipped up somewhere.”

If you’ve ever wondered what happened to the bullies that terrorized you in school, rest assured. They’ve gone on to professional status. Some work for criminal organizations. And the rest try to legitimize their actions by working for government tax collection agencies. Thank goodness we live in a free society….