Tuesday, June 1, 2010

Citizen Squeeze

Governments at all level are putting the squeeze on their citizens by inventing new ways to charge, tax, fine, assess, ticket, and inflate the money out of them. I’ve previously referred to Denver’s ridiculous OPT (Occupational “Privilege” Tax) and the new registration fee imposed on those paying this tax. Here’s a new one.

I am the owner of a small business I started in 1980. We are a Chapter S Corporation. We have to file an annual 1120S Federal Income Tax Form, which is due, illogically, on March 15.

For the past few years, this business has lost money. In the past, if nothing was owed, it did not matter if it was filed late. That has changed.

I received a notice from the IRS that I owed a penalty of $356.00 for filing late. This was calculated at $89.00 per shareholder for each month the filing was late, and they erroneously calculated that it was 2 months late. (We only have two shareholders, but image the penalty if you had 1000 shareholders.)

I knew it was only one month late, because in order to file the rest of my IRS forms on April 15, after the local post office had closed, I had to drive out to the old Stapleton Postal Center in order to get it in before midnight. Remember when they used to make a big deal about how you could file after hours downtown? They would have news crews downtown to catch procrastinators filing at the last minute.

Well, no more. No staying open late to accommodate procrastinators. So we had to drive an extra 5 miles to pay after 5:00 pm. Hundreds of cars were flooding into the Postal Center that night.

Today I called the IRS to question the penalty for not filing a form stating I owed nothing. The agent explained that yes, this was a change from last year. Now you will be penalized for a late filing even if you owe nothing. But she hastened to add that there was also a First Time Penalty Removal option that I could get by merely asking for it.

I asked for it, she removed the penalty, and now I owe nothing. Good outcome this year, but be forewarned – late filing of a form, even if you owe nothing, you will be penalized.

The Citizen Squeeze is on. Expect more of the same at every level.

The Taxman - The Beatles


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