Wednesday, April 4, 2012

This Takes A Little Explaining. But . . . It Helps Explain Why Taxes Have Gotten Such a Bad Name.

Hang in there with me and you will see the deviousness of human character.

A retired friend just returned from three months in Florida’s warmth carrying a brochure from a tax preparation company offering to assist low income (or NO income) people in filing for “Earned Income” tax refunds of up to $4,000. The brochure promised “Same Day” payment of the refund.

The friend appeared incensed that one could get an “Earned Income” refund if they had earned no income. His outrage is understandable. And it is also doubtful that they could – even in Florida.

Upon reflection I think this may be the explanation:

1.        The offer is bogus. Most people who respond will be told that, regrettably, they don’t qualify for the unbelievable $4,000 refund but since they are already there in the tax preparer’s office they can take advantage of other services he offers and file for a much smaller refund. And they can receive their refund on the same day. 

2.        The offer of “Same Day” refunds is available as advertized, but only if the customer signs over their refund to the tax preparation company, in which case the company will give them the amount of their refund immediately, deducting, of course, a commission (say, 25% or more) for their services. 

3.        The result is that the taxpayer (alias, Sucker) that thought he would get something for nothing ends up giving up something for nothing in return. 

The moral I would take away from this story is that if it looks like a REALLY GOOD DEAL it probably is. But not for you, Sucker! For the guy in the shabby office on Franklin Street who ran off the brochure at Zip Print Store next door. 

And if you are really unlucky he will screw up your tax return and you’ll have to hire H&R Block, two doors further down the street, to get you out of the mess.

One final observation. This appears to be a case of corporate (or at least business) welfare at work. Money allocated to aid the working poor finds its way into the pockets of opportunists who seize every dollar of government aid that they can, even if they have to rip it away from some poor schmuck for whom it was intended. There aughta be a law to close that loophole.

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