Dateline–Tax Day

E-filing scams, and a candidate for Nevada State Assembly who wants elections held on tax day unsettle America’s time-honored institution.

The Internal Revenue Service reports that the number of Americans who have already filed their tax returns is down almost 25 percent from previous years. Officials speculate that rumors circulating on the Internet regarding the Y2K computer bug and the IRS may to blame. According to Adam Masuel who writes an online column on money matters, the most prevalent version of the IRS-Y2K story suggests that the federal agency will experience a significant computer failure on July 1, 1999, the first day of the fiscal year 2000. Says Masuel, “People are receiving e-mails telling them that they don’t have to file taxes because the IRS won’t know who’s paid up and who’s delinquent when its computers reach the 2000.” The IRS contends that it is nearly 80 percent Y2K-compliant and expects no data loss to occur in its central computer systems.

Authorities in Alabama, Colorado, Washington, and Illinois are investigating reports of widespread fraud associated with electronic tax filing services. In a number of cases, businesses that offer consumers instant cash returns have knowingly filed erroneous tax returns on behalf of unwitting clients. According to investigators, the use of electronic forms helps fraudulent tax-preparers to disguise their paperless trail. In one instance, a couple who should have received an $8,000 refund was instead given only $3,000 with the e-scammer pocketing the difference. Steven Schlarb, a spokesperson for H&R Block, the nation’s largest tax-preparation franchise, considers the instances of fraud to be “an insignificant aberration in the growing e-filing industry.” The number of Americans who will file electronically is expected to increase by nearly 20 percent this year.

Byron Luper, a libertarian candidate for the Nevada State Assembly, is campaigning on a radical platform that would allow state residents to vote while filing their taxes. While similar to the “motor voter” initiatives of the early 90’s, Luper’s controversial proposal has already overcome several challenges from state officials. “The people and Byron Luper see eye-to-eye on this issue” said Luper, a former boxing referee, “and we believe there is no legitimate constitutional limitation on when elections can be held.” Polls suggest that the plan is growing in popularity among Nevada residents. Anne Hutchinson, a professor of political science at the University of Nevada Las Vegas, believes Luper has hit a nerve with his new tax-vote scheme. “It’s taxation with representation,” quips Hutchinson, “while too many voters are staying away from the polls for precisely the same reasons they grumble about paying taxes, in the end they have to pay. [Luper’s] plan ties up the loose ends, however heavy-handedly.”

An immigrant rights organization in Los Angeles is urging legal aliens to withhold their state taxes this year in protest of recent legislation that barrs them from receiving tax-supported services like public health care and schooling. Sandra Lista, an attorney from the Immigrant Legal Defense Fund, claims the act of fiscal disobedence will cost the state of California nearly $1 million. Says Lista, “these are hard-working, legal residents of the U.S. who have pumped tens of millions of dollars into the state economy only to be scapegoated time and again by unscrupulous politicians.” A statement issued by the California Treasurer’s Office discouraged residents from engaging in “any politically motivated tax protest” and warned that violations of state tax code would be prosecuted to the full extent of the law.