Saturday, March 26, 2011

The IRS isn't *all* bad...

When the deposit into my bank account for my federal tax refund was approximately $200 higher than what I filed on my tax return (using free file fillable forms, because I don't think that I should have to pay money to file my taxes electronically), I was a little suspicious.  But not suspicious enough to complain to anybody about it.

A little later, when I was doing my mother's tax return (with TaxAct, because she's willing to pay their fees for e-filing the state return), I noticed that TaxAct let her claim the Making Work Pay credit.  I again became suspicious, because I was unfamiliar with this credit, and figured that I should have qualified for it as well.

It was not until I received a letter from the Internal Revenue Service a few days ago that I put all the pieces together.  The IRS explained that they had adjusted my refund by giving me that tax credit, even though I had never claimed it.  How generous of them!  It's nice to see that they make adjustments to our benefit from time to time, not only the other way around.

This doesn't mean that I've changed my mind that the IRS is a mostly unnecessary organization, though.  If it were up to me, the tax code would be grossly simplified, and most (if not all) deductions, credits, exemptions, and adjustments would be removed.  I think that the purpose of taxes is simply to raise only as much money as is necessary to run the government, not to also encourage or discourage certain behaviors.