I’m sure I have lifetime employment, and this story is yet another confirmation of that. A Detroit attorney received a bill for 5¢ from the IRS. He then received a letter noting that he was owed a 4¢ refund, but he would have to request the refund because the IRS doesn’t normally send out such refunds. But which is correct—the 5¢ he is required to pay or the 4¢ the IRS is not required to refund?
He called the IRS and was on hold for so long he gave up. AP reported that an IRS spokesman refused comment.
In all seriousness this story does lead to a question that really should be answered. Why does the IRS bill anyone for such a small amount? It has to cost the IRS at least $2 to send out a notice. To spend $2 to collect 5¢ is ridiculous.
Of course, this whole thing is ridiculous but there is some good news on the horizon. In theory, sometime later this year you will be able to go online and access your IRS account information. Professionals already can (with authorization from the taxpayer) through the IRS’ e-services; the system works very well.
In any case, if I hear about the resolution of the 5¢/4¢ conundrum I’ll be sure to let you know.
My girlfriend’s mother owes $15k, and is owed $40k. They won’t release the 40k until she pays the 15k. WTF.
I guess the logic is something like this: “If everyone knew that the IRS wouldn’t bill you for the last $2 you owed, they would all pay $1.99 less on their taxes every year. $1.99 times 100 million+ taxpayers equals $200 million per year lost. The occasional (and it is occasional!) tiny bill is worth it for that.” It isn’t that simple, but I think that explains part of it.