Wednesday, April 13, 2005

INTERNAL REVENUE DISSERVICE

As a follow-up on telefiling tax returns, it’s worth noting a peculiar disagreement between state and federal philosophies on revenue collection.

Federally, this is the last year for telefiling, a service used by about 3.8 million people with simple tax returns — which usually means little income. Along with the end of this service goes many hours of tax help by telephone and 105 of the 367 walk-in tax-help centers. The cuts will save between $17 million and $21 million, according to coverage in The New York Times, far less than one-half of 1 percent of the annual budget of the Internal Revenue Service.

But upon completion of telefiling in Massachusetts, a recording thanks taxpayers for using the service ... because it saves money.

There’s no real confusion here. Telefiling does not save money in Massachusetts but cost money federally. Mark W. Everson, commissioner of the Internal Revenue Services acknowledges that it’s “crazy,” but the budget pushed through by the White House and Congress is cutting services known to make money.

It’s just a coincidence, surely, that the cuts hurt only low-income earners.

And just a coincidence it makes filing taxes more complex. And frustrates taxpayers so they’ll support simplification of the tax code, even if the simplification takes the form of something even more injurious to low-income earners, such as a flat tax or consumption tax.

It’s just a coincidence.

There’s no accounting for it.

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