In 1951, a 70-year-old Syracuse, New York couple made news by returning a $27 tax refund cheque to the IRS. What is their reasoning? Gratitude for "the opportunity to continue working." Their accompanying letter said that they considered themselves lucky to be employed and thought the government should put the money to greater use. This act of patriotism and selflessness was extensively publicized, with publications emphasizing the couple's unusual viewpoint during a period when most people would gladly take any cash reward.
In the early 1950s, the Bureau of Internal Revenue (now the IRS) hired people to sift through newspapers and publications for possible tax evasion leads. One such accomplishment involves a "boy wonder" who was profiled in The New York Times and supposedly collected $15 million quickly after graduation. Tax collectors were aware of the individual's advertised riches, and it was discovered that he had failed to pay his taxes. Surprisingly, a tax collector at the time observed, "The most helpful snitches are divorced wives," underlining how personal problems often led to tax fraud disclosures.
Taxpayers have always tried to stretch the bounds of deductible costs.
dependant Dog: In the 1950s, a man registered his dog, Butch, as a dependant, claiming that "it costs as much to keep Butch as to keep myself." While creative, the IRS did not recognize dogs as dependents, rendering this deduction ineffective.
Another person argued that food costs should be deductible, characterizing meals as "fuel for my engine." This argument fell flat since personal living costs are often not tax deductible.
These examples highlight how far some people will go to lower their tax responsibilities, sometimes blurring the line between innovation and compliance.
A certified public accountant remembers drafting a tax return for a single mother who remembered her child's Social Security number. When the return was denied because of an inaccurate number, the mother said, "I was only off by one number!" This instance emphasizes the significance of precision in tax files, since even tiny mistakes may result in processing delays and fines.
In 1988, the IRS's Albany, New York, branch received an unexpected query. A guy inquired, "I do not reside in New York, nor do I work there. Last year, however, I went on vacation to New York. "Am I required to pay New York taxes?" The perplexed answer was: "Only if you want to." This conversation demonstrates the uncertainty that some taxpayers have about their state tax duties, as well as the need of knowing tax regulations governing travel and temporary stays.
Not only do individuals experience stress throughout tax season, but so do those who handle returns. Employees at Albany's tax processing offices prepared in the 1980s by practicing CPR. According to the spokeswoman, "Last year, the ambulance took away eight people for stress." This proactive approach highlights the high-pressure atmosphere in which tax experts work during peak filing seasons.
While tax season is full with problems, these anecdotes serve as a reminder that even the most thorough procedures can be amusing. Allow these tales to give a small break, as well as a lesson in what not to do, while you prepare returns for your customers. While originality is often rewarded in other aspects of life, when it comes to taxes, it is preferable to follow the rules.