News Item (ABA Journal):
Too bad—if only your family tragedy had gotten more publicity, the IRS might have given a damn.
“After Monday’s fatal bombing near the finish line of the Boston Marathon, the Internal Revenue Service has announce that the April 15 income tax filing deadline will be extended by three months for those affected by the crime…”
Oh! Does this mean that the Internal Revenue Service has a new policy that grants penalty-free extensions to taxpayers who experienced a personal tragedy on or about April 15? Well, no, it doesn’t. Does it mean that all the other victims of crimes and tragedies across the nation will get similar compassionate treatment? No, it doesn’t mean this either. What it means is that someone—I wonder who?—is using a Federal Agency to make political hay and get positive publicity from journalists who are incapable of thought.
This is an ethics foul, a significant one, and I would think an obvious one as well. The government’s tax-collecting agency must display absolute integrity and consistency at all times, and must not be influenced or driven by politics or public relations. There are citizens across our land who had family members raped on April 15, or who were raped themselves; who had children or parents die, who were in horrible accidents, whose home or business burned down, who lost their jobs, or who were diagnosed with dread diseases that will change their lives forever. Why are the Boston victims receiving compassionate treatment,while these citizens are not? You know why: because this was a high-profile tragedy, to which I say, so what? What is the ethical principle being articulated here that is worth sacrificing the IRS’s integrity? That high-profile victims deserve more compassion than other victims? No, the principle is that a government gets better PR brownie points by making beneficent gestures to well-publicized victims who are on TV than it does, say, to a tax-paying father whose kid was gunned down in a drive-by on tax day.
Well, it’s a cynical, sloppy, incoherent, irresponsible ad hoc principle that operates on a double standard, and is inherently unfair and unjust. It also necessarily raises the questions, how else does the IRS play favorites? What other political activities does the IRS perform for its masters?
That’s how trust in the government erodes, and the IRS is asking for it.
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Pointer and Facts: ABA Journal
Ethics Alarms 
I can’t wait to see the IRS form one fills out to qualify for this extension. Where do you get one? Do you need a note from your mother? What if your’ mother’s dead? If I live in Boston, do I qualify? Medford? Providence, RI? If I flew there from Seattle to watch the marathon, do I qualify? If I have already filed and I qualify for the extension, is there a form pursuant to which I apply to get interest on my payment for the three months I paid early? If I was right there when the bombs went off, but I don’t consider myself “affected” (because I’m a sociopath), am I still eligible for the extension?
That IRS policy really is cynical and sleazy, faux compassion. Perhaps more cynical still, would be to link the policy to operating budget and staff limitations due to sequestration – or, to deny such linkage – or, to link the policy to some “survivor guilt” feigned by some IRS employees.
Good pointed questions, too, Other Bill.
A cheap PR gimmick. I don’t know of any other way to describe it. In fact, hasn’t the entire federal government devolved to just this?
Yes. (I’m trying to be more concise…)
I agree with your points, but I think you have only part of the reason. It’s not just that the IRS “gets better PR brownie points by making beneficent gestures to well-publicized victims who are on TV than it does, say, to a tax-paying father whose kid was gunned down in a drive-by on tax day.” It’s also that if the father with the dead kid complains about paying a late filing penalty, no one in the media will care, which is not unreasonable. But if someone in a Boston Marathon Bombing Family complains, or better, if several of them do, that’s a story or opinion piece for any journalist that wants it.
(This reminds me that it must have been a special slap in the face to have lost a beloved family member on 9/11…in a liquor store holdup, or a drunk driving accident, or a house fire…and discover that your loss just doesn’t count. This is going to be more of the same.)
That said, this is the IRS we’re talking about. They’re extending the deadline for filing tax paperwork, not the deadline for paying taxes. Boston Marathon bombing survivors who owe additional income taxes will still face penalties for late payment if they didn’t send a check on April 15th But for bombing survivors who have a refund coming, the IRS will graciously hang onto the money a little longer. Because the government is here to help.
Even the tax filing extension isn’t a big deal. Every taxpayer has the right to an automatic extension by filing a form they can download online, as long as they mail it before April 15. If they wait until after the due date, they can still avoid filing penalties if they can offer a reasonable explanation, which generally includes accidents, natural disasters, serious illness, and generally anything which indicates that your failure to file on time was not due to bad faith or carelessness on your part. So anyone in Boston on the day would probably have a reasonable excuse that’s hard to check on. In essence, the IRS is saying that if you lived in Boston on April 15th, don’t even bother calling, we’ll just assume you meant to file your taxes. It’s probably going to save the IRS some paperwork.
Finally, I can’t find any mention of a penalty anywhere that isn’t based on the amount of taxes owed. So if the IRS owes you a refund, as they do most taxpayers, there is no penalty for filing late. They don’t really care if you never file. So this bit of compassion only applies to the small number of Boston taxpayers who both failed to file and owe taxes.
Exactly correct. All this does is expedite relief that would be available to anyone with reasonable cause, and it’s certainly not the first time the IRS has given a blanket extension to taxpayers in a disaster-affected region.
That said, for a person in Los Angeles instead of Boston whose kid died on Monday in a less noteworthy fashion, obtaining that relief is not a small hassle. Admittedly I work with businesses rather than individuals, and those that can afford a top-tier accounting firm at that, but I can attest that the process is slow and, if unlucky, requires multiple rounds with the IRS.
But this isn’t an earthquake or a flood. This is a trauma, but nothing is physically preventing someone from getting their taxes done. Every one of those getting extensions could have completed the process days or months ago. Indeed, this is WHY you don’t wait until the last minute. The tragedy is not the cause of their taxes being late, unlike the natural disasters where the IRS has extended leniency elsewhere. Why is their plight different from a person in Los Angeles instead of Boston whose kid died on Monday in a less noteworthy fashion? It’s not. And, of course, the hassle of getting a waiver is only slightly less onerous than finishing the taxes.
I think for the average taxpayer you’re pretty much right. The guy on the street who put off filing until the last minute, down to going to see the marathon and planning to finish that night, only to get caught up in the chaos – yeah, he should have filed earlier. And people who live in Boston but were nowhere near the event certainly could have filed, one would assume.
On the other hand, at the risk of potentially giving away my employer, our Boston office is close to the site and was forced to evacuate. I have no idea how many returns we were supposed to efile for clients that didn’t get done on time, but I’d be willing to bet it’s not negligible. And it’s not because people waited for the last minute, but because the sheer volume of work means we sometimes work right up to the day and someone has to be the last one done.
Does the blanket extension mean some people are getting grace that don’t need or deserve it? Sure – as was the case with each of the hurricane extensions I’ve dealt with. And yes, my point was that the plight of the Boston and LA taxpayers is the same with uneven results – that although the relief is technically available to both, it is a lot more difficult for the LA taxpayer to obtain. As Windy suggests, it’s more efficient for the IRS to handle it this way rather than trying to deal with a case by case basis. Given that they operate with scarce government resources, I find it preferable that a small amount of penalties be waived that didn’t deserve to be – partially offset by the government’s ability to earn interest by holding the unclaimed refunds over the same period – rather than strictly enforcing the deadline in the interest of fairness.
(I should disclose that I am also sympathetic to the traumatized procrastinator, having been up late working on a paper on Chaucer that was due in the morning when the Texas A&M Bonfire stack fell and killed 12 in 1999. Although I did not know anyone personally who was involved, the paper was turned in late, with no penalty thanks to an understanding professor.)
The poor people in West, Texas had their town blow up 2 days too late. How long would their tax deadline have been extended?
That kind of offer doesn’t extend to red states, Michael. Texas, in particular!