By DENNIS HUANG
It is alarming to hear that the IRS has proposed a plan to Congress that will take away our independence as tax filers and instead force us to rely on the IRS to do it for us.
The IRS claims that it can handle the enormous task of preparing tax returns for every single American tax-payer, taking away individually prepared returns and managing it on a massive, federalized scale. But their record as collectors has so far proven to be a failure. According to the Government Accountability Office, the IRS answers 1 in 5 tax-related questions incorrectly, and has not fixed the majority of the return mistakes made 2 years ago. These are facts we cannot ignore.
The IRS’s plan will have a major impact on businesses across the country. The program will require businesses to report employee payroll information to the IRS on a regular basis, as often as payroll, which will create additional work and mean heavy costs to manage.
According to the United States Census Bureau, there are well over 1.5 million Asian-owned businesses across the country. Many of us will feel the direct financial burden of the IRS’s plan on a monthly or bi-monthly basis. Not only will we have to spend more to file and report our employees’ information, but we will also spend more time paying taxes, and receive less of a refund each year. As business owners, we rely on the federal government to support our chances of success and financial freedom, not punish us with a bad system that will cost us money and time, and take away professionally-skilled jobs such as accountants, bookkeepers, and many more.
Accountants are critical to the prosperity and function of any business. Because there are various types of businesses, accounting professionals play a crucial role in helping these businesses navigate through a complex tax system. Retail business is a different business model than a professional service firm. One deals with cash and credit cards, while the others deal with terms. Would the IRS know the difference? Would the IRS be able to take into account the advantages and disadvantages between straight line, double declining balance or units of production depreciation method?
As business owners know, the details of our year make a big difference when we file our taxes. Our ability to document car expenses, business travel, new equipment, and many other exemptions lowers the burden of taxes. And when our taxes are filed accurately by an expert, we may actually get a better refund. The IRS has no plan for including information that will make running our businesses easier, and will limit our ability to grow.
Many small businesses in our communities exist to help us file our taxes. Many of these accountants offer their free expertise to make sure that we get the most out of our refund and pay the least in taxes to the government. Sixteen major corporations offer completely free tax-filing services to our elderly and lower-to-moderate income neighbors. This new program will bankrupt these businesses and take away the expert support we need to get the best refund. Our communities rely on these services, the jobs they provide, and the financial strength we gain from having our taxes filed properly.
The IRS has no history to support any chance of success with this new program. Instead, we are left confused and concerned as to why a federal government agency would want to do something so bad for Americans and the American economy. As concerned citizens and business leaders, we must take a stand and make sure that this plan is never approved. The costs we will suffer as a result will have long-term consequences on our businesses, the national economy, and our communities that rely upon them both.
Dennis Huang is the executive director of the Asian Business Association of Los Angeles, which is the premier non-profit organization that serves the needs of Asian Pacific Islander business owners and professionals. ABA has been proactively assisting these businesses gain access to economic opportunities and advancement since 1976. ABA has an active membership base of over 500, and offers programs to help these businesses grow.