I have never filed a late tax return.
It is not uncommon for state, local and federal tax departments to send my corporation a letter, asking for some explanation or asserting that I had not filed correctly or filed and paid on time, etc. I run a very tight ship and these matters usually get cleared up with a prompt letter and excessive documentation proving the date of filing, the date the check cleared and whatever else is needed to satisfy the anomaly.
I hire very good people. They have never been wrong.
It used to be that we would get a random letter every other year or so. It happens. Tax departments are very complicated with a lot of gears and levers and people pushing and pulling those levers. But lately, I’ve noticed that we are receiving letters almost quarterly from every tax department; from Ohio Department of Taxation to Ohio’s Health and Human Services to The City of Vandalia to the Internal Revenue Service. As of today, we have five outstanding tax issues.
I have no doubt that all of these will be resolved, but I have to ask: What the hell is going on here? Are these tax departments understaffed? I’d like to think that is the problem because the other alternatives is they are either stupid or malicious. That is not a road I’m willing to go down.
I have noticed, though, that no matter the outcome, the tax department always insists on assessing a late filing fee, even though the return was not late. Yes, we fight that but it is one more step in the process.
Maybe public sector cuts are not the answer. Small government may just mean that critical services gets rushed and too many mistakes happen. Mistakes like this cost private business a lot of money in extra payroll, time away from development, paranoid documentation practices and just needless pain-in-the-ass. All of this is real money.
As a private business, you can’t just ignore a tax letter. Really, not wise. It doesn’t matter how small you are, it has to be attended to right away.
This isn’t a “I hate paying taxes” rant. I get why we pay taxes. Like everyone else (except Warren Buffet) I would like to pay less. But mostly, I would like to not be on the crap end of these letters that seem to come in without rhyme or reason. If that means we should be increasing taxes to hire a few more people to make sure these mistakes don’t happen, I’m for that.
But this random “wheel of fortune” game we seem to now be on ticks me off more than higher taxes. This makes me feel like a sitting duck.