Taxes and the IRS
There is a saying that 2 inevitables in life are death and taxes. If that is so, it is just man’s nature to try their darnedest to avoid either.
I don’t want to die (yet), but when the end comes, I go. Regarding taxes, believe it or not, I don’t mind paying. If I benefit from the roads, bureaucracy order, police, firemen, post office, clean air and water regulations, freedom of choice, democracy, etc, etc., I do so gratefully, knowing that I am paying a share of the price of admission, just as I pay to go see a movie. There is a song about paving paradise with the phrase “you don’t know what you’ve got ’til it’s gone” that I think of when I hear people belly aching about their taxes – they don’t know how good we have it, and it really shouldn’t be for free or a bargain.
Rich Dad Poor Dad author Robert Kiyosaki says the income quadrant that pays the highest rate of taxes – with no control is if you are an employee. You have no choice because your paycheck is the net income after taxes.
People in business or with investments have much more flexibility, and get to spend the income first, and whatever is left over is what is taxed. MUCH better than being taxed as an employee – everyone should at least start a business and see the difference in their pocketbook as well as their spending habits.
Aunty is both an employee as well as a person in business (real estate investing). I don’t file my own taxes because I am not a tax expert. I use a very capable CPA, Diane Sandlin out in Kailua. I count on her to do the best at filing for us efficiently and properly.
However, I was going through a recent loan application process, and the underwriter wanted to see proof of our filing status as an S Corp. I searched and searched my papers and could not find the notice of record from the IRS from a year ago. I was forced to call the IRS, and I did so with a predetermined sense of weariness and dread.
Before you get to speak with a live person in the IRS, you must go through a series of menus by pressing this number, or that. I got connected to a Miss Howie who needed to verify Uncle’s identity and then get authorization from him to speak to me. Uncle put up a bit of humbug but did manage to grumpily answer the questions that were sufficient to Miss Howie and then she and I got down to the knitty gritty of obtaining proof of filing status.
Somewhere along the way, 3 years ago, our filing status was messed up and the communication and documents required to fix our status was quite overwhelming. This form and that form and this explanation and that explanation, and I got off the phone with a lot of homework on my hands.
Within the hour, though, I received a call back from the IRS, same agent, and with a better solution to our dilemma. What a relief! I thanked her profusely. She went over and beyond what I thought a government employee would do to help.
After the call ended, I thought about all the other calls I ever made to the IRS. In 100% of the time, I was treated with respect, patience, and got the answers I needed. In fact, the very first time I had a conversation with an IRS agent was 18 years ago when the house next door was being foreclosed upon because the owner refused to pay capital gains tax on a property she had sold for a profit. The agent felt bad about what he had to do, but he did his job professionally. His job was to get what the government was owed and give the delinquent owner time and opportunity to clear their outstanding balance. When it was obvious she was not going to comply because she was waiting for God to banish away her “enemies”, the home was auction off, delinquencies paid, and the former homeowner walked away with a tidy sum with which she could purchase a smaller home to live. The IRS did what it had to do, and did it well.
The IRS is not the boogey man. They aren’t the bad guys. They can be reasonable, and they are human. I’ll gladly pay my taxes after spending for expenses related to business. It is actually a very fair system but you have to make sure you put in your estimated tax payments on time and consistently so you don’t get whammied in April.
The next time you ever have to call the IRS, I hope you also feel the need to say thank you to them because they helped you. They do a job that is not easy, and they do it well for our benefit.
Treat them with respect if you want to get respect in return. Do what is legal to save on taxes, and pay what you owe. That is fair, don’t you think?