For a tax system to enjoy widespread compliance and relatively little cheating, it needs to be fair.
However, recent revelations about the IRS have blemished its appearance of fairness.
A recent study showed that Black taxpayers are at least three times as likely to be audited by the IRS as other taxpayers.
There is no evidence that this one group engages in more tax evasion than others.
It appears the discrimination is digital in nature and the fault of a computer algorithm.
Also, in December, six years of Donald Trump’s federal tax returns were released and show the former president paid very little, if any, in federal income taxes some years. This unveiling once again demonstrated that the very wealthy don't pay what many would consider their fair share of taxes compared to the middle class.
Recently Republican lawmakers have criticized the IRS for expanding its workforce dedicated to catching tax cheats and scofflaws. This politically motivated attack also served to reduce the public's confidence in the federal revenue collecting agency.
Meanwhile, the cost to pay federal income tax is unnecessarily large and especially burdensome to the middle-class, whose tax paying needs are quite simple. Data shows that the costs of complying are regressive—lower, as a share of income, for wealthier taxpayers.
The cost of having your taxes filed by a professional tax preparer can vary greatly depending on several factors, including the complexity of your tax situation, where you live, and the tax preparer's experience and qualifications. On average, it can cost anywhere from $100 to $500 or more to have a professional prepare and file your tax return.
In addition, many tax preparation software programs are available that can help you file your taxes electronically, which can be a cost-effective alternative to hiring a tax preparer. These software programs can cost approximately $100 or more, depending on the features and level of service they offer.
It's worth noting that many low-income taxpayers are eligible for free tax preparation services through programs like the Volunteer Income Tax Assistance (VITA) program, which is run by the IRS.
Guests:
- Valerie Sanchez, Volunteer Income Tax Assistance (VITA) program, Impact Manager of the Strong Individuals and Families Impact Council for United Way of San Antonio and Bexar County
- Beverly Moran, Professor of Law and Sociology, Emerita at Vanderbilt University, co-author - Basic Federal Income Taxation of Individuals
"The Source" is a live call-in program airing Mondays through Thursdays from 12-1 p.m. Leave a message before the program at (210) 615-8982. During the live show, call 833-877-8255, email thesource@tpr.org or tweet@TPRSource.
*This interview was recorded on Thursday, February 9.
