Congress keeps yapping about the "Tax Gap", the gap between what people should pay in taxes according to the tax code and what the Treasury ultimately collects.
Want to know one thing they could do; get rid of the Earned Income Credit. If you are not familiar with the credit, it's essentially welfare for lower wage working people.
Apparently, people in poor neighborhoods have determined that the cost of getting caught claiming Earned Income Credit they do not qualify for is out weighed by the credit itself. As a result, you have a proliferation of tax cheats and an entire industry of local tax prep companies helping people commit fraud.
The IRS knows political correctness, so they don't want to touch it with a ten foot pole because it looks like they're not sensitive to the needs of the "poor".
But if you throw a few people in jail for this crap, you'll see this activity dry up in no time.
1 comment:
I am self-employed, and one year claimed the EIC. Although I paid no taxes that year, I got money back from the Feds.
Could this be part of the tax gap?
I almost told my tax preparer to refigure my taxes so I didn't get anything back...but my senses quickly snapped back into my head and I took the money.
Post a Comment