My father once told me that during his Army basic training at Fort Dix, N.J., in the early 1950s, his platoon was, on one blistering July day, preparing to embark on a 10-mile hike when his drill sergeant barked out that if there were any plumbers in the barracks who wished to volunteer for a special job, they could sidestep the grueling maneuvers. About four or five hands shot up, and those smirking volunteers were quickly led away to perform their anointed task - cleaning out the clogged latrine pipes.It was at that moment that he gleaned a life-long lesson about volunteering at a time when it seems too good to be true.
While on the subject of curious times to volunteer, the Internal Revenue Service recently outlined a strategy to help shrink the oft-mentioned tax gap, which currently hovers at roughly $290 billion.
The broad gist of it is to "encourage" more individual taxpayers and businesses to voluntarily pay what they owe, and toward that end, the IRS Oversight Board has established a rather ambitious voluntary compliance goal of 86 percent by 2009. Sen. Max Baucus, D-Mont., chair of the Senate Finance Committee, wants that number to hit 90 percent by 2017.
It's fair to say that the IRS faces an uphill battle. I don't know many people or businesses who are just going to volunteer to give the Treasury more of their money. They would probably first opt for the latrine-cleansing mandate. Therefore, to complement what many might critique as a rather Pollyannish hope, the IRS is taking the proactive route and paring down the opportunities for tax evasion in the first place.
Its 2008 budget proposal carries some 16 initiatives to target non-compliance, including requiring taxpayer identification numbers from more contractors, increasing the penalties for non-compliance, requiring that a greater number of larger businesses and organizations e-file, and mandating that securities brokers increase disclosures about sales and consignments. The service also plans to continue the upgrades to its technology system. While on paper its plan to hone its IT processes should aid in its quest to help narrow the tax gap and improve overall service, remember that its technology upgrade project seems to have gone on longer than Boston's Big Dig or New York's eternal plans for a Second Avenue Subway.
Along with that, the IRS said it was stepping up its coordination efforts with both state and foreign governments to "share information and compliance strategies." I wish them luck with that one when they begin calling officials in the Caymans.
Unfortunately, as someone who has been tax-compliant since first receiving my Social Security card, I'm afraid I can't offer sage advice on corralling those who are somewhat less diligent about filing 1040s. While well intentioned, I don't think volunteering is part of the equation. After all, look what happened when we entrusted so many to file voluntarily in the first place.
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