Monday, February 5, 2007

Read in triplicate

The IRS should cut the coyness and outfit its agents with hockey masks, chainsaws and meat hooks. Like the hacker movie villains who make their homes in vacant summer camps and creaky abandoned mansions, the collectors are determined to get you. And right now you can practically hear the music well up and a few bodies drop out of closets, because they have a new scare in the works for restaurateurs.

As The New York Times reported this morning, the tax agency, the Treasury Department and the now-Democratic Congress are intensifying efforts to collect on the estimated $109 billion that restaurants and other sole-proprietor businesses tend to under-report every year on their annual income-tax filings. Treasury has proposed that the IRS collect what the government is due by comparing the enterprises’ credit-card sales receipts with what’s reported on their tax returns. If your restaurants’ stated revenues are less than what’s been charged, or the reported sales seem low given how much was put on credit cards, you’ll soon be sitting across the desk from some guy with a mechanical pencil and an IRS Agents Do It By a Schedule poster on the wall above his leather-bound tax texts.

As the article noted, the Bush Administration proposed a nearly identical measure last year, but it died from lack of interest. But now the Democrats control Capitol Hill, and they need cash because of self-assumed new zero-net approach. If you want to launch a new program or extend the services of an existing one, you have to take the funds from somewhere else or generate the dollars through spending cuts. Each provision is pay-as-you-go—no increase in spending without an increase in tax revenues or spending cuts. And new taxes are right out in this political environment.

Capturing what proponents estimate as $100 million in uncollected taxes would pay for plenty of play in the new Congress. But it’s not as if those dollars are zero-sum from restaurateurs’ standpoint. They’re not paying the money now, and if the IRS hits them with a bill, for all extents and purposes it’s a new tax. And a potentially staggering one, even without the added costs of lawyers and accountants.

Makes a Halloween Night trip down to Camp Cut-‘em-up seem almost inviting.

1 Comments:

Anonymous Anonymous said...

So you're saying it's OK to cheat on your taxes as long as you're a restaurateur? Isn't that pandering?

February 14, 2007 at 11:45 AM  

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