Wow

I saw a bumpersticker today that said “I love my country: I fear my government,” and it got me thinking about my identity as an American. I thought about the lack of faith I have in other Americans, and I thought about our government, and I thought about all the things that are wrong with this country, and then I got to the post office, where the last piece of paperwork I needed to file my taxes was waiting, so I decided to file my taxes when I got home.

As someone who is self-employed, I was well aware this year that I could end up owing the IRS a substantial amount of money, but I also wanted to pay down my debt. So I worked. Very, very hard. I put a fair amount of money in savings, and I paid off part of my debt, and I lived reasonably frugally. I got rid of my car to save money. I didn’t travel. I was proud of the money I had set aside in savings, although a bit depressed to think that it would all vanish come April, but I was thinking ahead, trying to be responsible, trying to do the right thing, something we oh-so-earnest Americans do so love to do.

The thing about this country is that people always tell you you can be anything when you grow up, but that’s bullshit. You can be anything if you come from money. You can be anything if you don’t have to take out tens of thousands of dollars in student loans. If you don’t run up credit card debt trying to stay afloat during lean periods. You can be anything if you get lucky, and most Americans count on that luck as they live paycheck to paycheck, hoping they don’t get sick, hoping their cars don’t break, hoping that nothing happens.

And not everyone’s lucky, apparently. Today, it would appear that my luck has run out. Despite being fiscally responsible, despite trying really hard to get ahead, I owe the IRS $10,000 that I don’t have. Oh, I have part of it, in the meagre savings account I was so proud of this morning. But I won’t have anywhere near that by 15 April, and I know that if I apply for a payment plan or an extension, I still won’t have it. And I won’t have it next year when I owe it all over again.

And this means that I am fucked. Well and truly fucked. You may have noticed that less of my posts have a personal aspect these days, for a variety of reasons, but I am so depressed and horrified right now that I’m writing this, and posting it. Because what I really want to do is go and beat my head against a wall while shredding my garments and kicking cupcakes across the yard, but I can’t do that, because I have to work, now more so than ever. So I am going to write about my frustration and anger, because that means that in 10 minutes, I will be able to go back to work, and then at 4:00 I will turn on NPR and listen to pathetic political candidates making empty mealy mouthed statements about how they will fix America.

People wonder why they can’t get ahead in this country, and I think this is a prime illustration of why. I can’t afford to be American. And I don’t mean in the sense of having to shift money around and feeling stretched, I just plain can’t afford it, and I could never afford it. It’s not like I drive a Porsche, drink Veuve Cliquot, and throw lavish parties every weekend. I’m just trying to keep my head above water in the only way I know. The IRS wants over a quarter of my income, because I am working hard to get ahead, and I don’t make enough to hide my money. I don’t even want to give them my money in the first place, since they’re just going to waste it, but the government is set up in such a way that I have no choice. I have to comply with the IRS or they. Will. Take. Everything. In Confessions of a Tax Collector, the author writes about confiscating everything from a woodworking shop, every scrap of lumber, every nail, and selling it. That is what will happen to me unless I somehow magically figure something out in two months.

When people ask you what’s wrong with America, this is wrong with America. College graduates busting their balls to keep up on their debt and then running up against a brick wall in April is what’s wrong with America. People trying to be enterprising and branching out to work for themselves, and being totally unable to do so is what’s wrong with America. People evading their taxes because they can’t pay them and losing everything, every chance at success: this is what’s wrong with America.

Fuck.

8 Replies to “Wow”

  1. I deducted the heck out of it. That tax return was deducted like it had never been deducted before. There were so many deductions, I felt like I was turning into a giant minus sign! This is just the way the cookie crumbles, apparently. I’m going to have a little, ahem, chat with the IRS tomorrow.

  2. Well, I was going to tell you about the most depressing bumper sticker I ever saw, which happened to be on a pick-up in Fort Bragg, but my retrospective horror at that has been eclipsed by the horror of your tax dilemma. I know you’re plenty smart, so I won’t insult you by asking you if you’ve taken full advantage of all the deductions available to freelancers. But if you haven’t already, you might want to invest in a good accountant, because in my freelancing past they saved me way more than what they cost. Apart from that suggestion I am just speechless with sympathy. Good luck with this. I’ll tell you about the bumper sticker later.

  3. I am so sorry to hear that, and i do hope you and the IRS can figure something out. I know they are set up to deal with payment plans and the like, to help people out. It also might be worth talking to an accountant to see if they can help with anything – it could be that one of the reasons you got hit so hard is for not filing quarterly estimated tax payments. I’m not sure if there are penalties for self-employed people not making quarterlies, or only corporations, but it seems that the IRS may be set up to be lenient if you explain that this is the first year you were expected to do that, and didn’t realize you needed to be paying every three months, etc., etc.

    While I respect the viewpoint given in Confessions, and I understand not wanting to risk non-payment, I would also suggest at least looking at that alternative. The IRS is, in fact, mandated with some fairly harsh restrictions on what they can claim, as much as they would like to make people believe otherwise with their various scare tactics.

    Since 1992 the IRS has taken two cars, and one house from war tax resisters, of which there are tens of thousands in this country. There is no risk of jail time simply for refusal to pay – that choice is made much further down the line if the IRS does come knocking with all benefits; exactly one person, in the 1940s, was jailed for war tax resistance. Quite simply, it is not worth it from a financial standpoint for the IRS to raid personal possessions of resisters (and even if they wanted to, they are required to leave certain assets, such as those required for the resister to continue their profession; read: business computer). They have the choice to seize titles, but even that is rarely worth the payment, and they will negotiate a settlement long before.

    I’m not going to get in to the reasons why war tax resistance may make sense from many other perspectives, but I do want to at least put the option on the table to not pay. The IRS has one of the best fear-based propaganda machines of any governmental body – and they have to, because their actual power to punish and collect is incredibly, incredibly, incredibly limited. They publish books, print posters, do interviews, and make examples of the high-profile tax fraud (which is different) cases they prosecute against drug runners and the like, all to keep us in line.

    I am not saying you should refuse to pay your taxes, I want to make that clear (not to protect myself, but just to make it clear I’m really not preaching here). I am just trying to give my little voice to counter the fear the IRS spreads.

    Whatever you choose, I hope with all my heart this somehow works out okay in the end – be it by payment plan, a missed loophole, or resistance – and I will be thinking of you.

  4. I understand your feelings completely. I’ve been in the same sinking boat before, though I have to say, not that deep. That is the reason why I try to avoid doing to much work that involves contracting and such. And yes the American Dream is long dead. Though it would be good to remember that Horatio Alger’s stories of boot strap pulling were fictional to begin with.

  5. In general, if you owe $10,000 or less, you may qualify for an automatic installment agreement on the back taxes, if the amount you propose to pay per month will satisfy the debt over a certain time period (go to irs.gov for more information on installment agreements). It will also depend on you paying your estimated payments for 2008. Like you, I am also self-employed, and I gnash my teeth like everybody else when my quarterly payments are due. But I also recognize, as I preached to people just like you for twelve years, that I cannot count my GROSS income as my NET or “living income.” That takes discipline. That takes a certain psychological resiliency. And a mindset: Taxes are as much a part of your budget as groceries or gas. Calculate how much taxes are EACH month and set aside that amount EACH month (in an interest-bearing savings account is best) and then send it off when the quarterly payments are due. People were always shocked when I showed them (and they owed and earned MUCH MORE than you) how little, in comparison to their other expenses, this monthly outlay usually was. In other words, they discovered, much to their chagrin, that they were nickle-and-dimeing THEMSELVES into tax debt.
    I don’t know if you owe for any other years, but there are programs (offers-in-compromise) that offer amnesty to people who cannot pay their taxes by any other means than a lump-sum amount. You can check out that program at irs.gov as well.
    Death and taxes are inevitable, but simply because they are inevitable doesn’t mean we should let them ruin our lives. Nobody is fucked while they still draw breath.

  6. In answer to Rick, I actually do set aside substantial amounts in an interest bearing savings account for the IRS every month. Maybe if we had single payer healthcare, I wouldn’t have been forced to use that money for medical treatment in the middle of last year. Also, I wouldn’t rush to judgment on how much money I make, since as far as I know, you don’t happen to have that information. But I am honored to see you here, since Confessions happens to be one of my favorite books.

    Ideasinca, I am considering hiring an accountant, because I know that they know how to maximize my deductions. The issue is that because most of my transactions take place online, gathering supporting documentation for those deductions is going to be a real challenge; I know because of my own internal records, but I don’t have a stack of receipts or a neat accounting program to point to, because that’s not how I function. If you have recommendations for a local accountant, though, I would very much like to hear them, as it’s worth it to at least talk to one.

    Anonymous, I am aware that is an option. However, by not paying my taxes, I will never be able to buy a house (assuming I am ever in a financial position to do so, which I never will be when 1/4 of my income goes to the IRS, what a catch-22). This may also make it impossible to apply for student loans if I decide to go to graduate school. These two issues make me very reluctant to consider that option.

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