Part of running a fair tax system involves being able and willing to catch tax cheaters. The Internal Revenue Service vows that it is going to be doing a better job of that this year than in the recent past.
That's good news for honest taxpayers in every way but one: It means there are going to be more audits and nobody wants to be audited.
But nobody wants to be cheated either, and two stories out of Washington, D.C., during this tax-deadline week illustrated the need for vigilance and fairness.
The first story noted that the IRS has now acknowledged that during the year 2000 and the first four months of 2001, it blithely paid out more than $30 million dollars to taxpayers who claimed bogus slavery reparation tax credits.
Nowhere in the tax codes are such credits authorized, but a growing number of black taxpayers are being misled by scams falsely claiming that, for a fee, they can get tax credits or refunds as reparations for slavery.
The IRS claims that it catches more than 95 percent of these claims right off the bat. But last year 77,000 such claims were filed and some were honored. Each one that got through has the effect of encouraging more taxpayers to try the scam.
Given that these bogus claims are made in the amount of $43,000 -- an amount said to be equal today to the value of 40 acres and a mule given to some freed slaves at the end of the Civil War -- none should get through the IRS without being challenged.
The second story centered on the Senate testimony of Treasury Secretary Paul O'Neill. In a fit of pettiness a few years ago, the Republican Congress ordered the Internal Revenue Service to step up audits of taxpayers claiming the earned income tax credit, a refundable tax credit aimed at helping the working poor. O'Neill testified as to the result: One out of 50 low income taxpayers gets audited by the IRS, three times the rate for taxpayers earning over $100,000. The plain-talking O'Neill didn't hide his disdain. "You think I like that?" O'Neill asked a House Appropriations subcommittee. "I hate it."
He added that all the firepower put into those audits recovered little money for the government because -- surprise -- people claiming the tax credit are poor and pay little or no income taxes.
Some of those claims may be fraudulent, but there's a good argument for confusion. There are 54 pages of instructions for claiming the credit.
Congress should look at those 54 pages and the other 9,500 pages, much of which O'Neill said is "gibberish."
A clear code would make it easier for everyone to make legitimate claims, and easier for the IRS to catch the cheaters.