IRS: “Tell Us About Your Prayers” — Do Tax-Sheltered Organizations Even Make Sense?

By now, you certainly know the story.  The IRS was targeting certain groups that were applying for a special and coveted designation as a tax-free organization.  When we say targeting, it means that they flagged these organizations applications as ones that needed a closer look.  The groups happened to be Tea Party or otherwise conservative groups, obviously enraging Republicans everywhere.  The scandal has gone through the major news, with even liberal news sources grudgingly having to report it.  That alone shows the scandal is real.  Now, there is even more disturbing information about the IRS asking a pro-life group to “describe the nature of their prayers.”  A lot of people are crying about freedom of religion here.  Well, while Common Sense Conspiracy has published plenty of articles over the years about the tongue-in-cheek extermination of religion that is currently underway in our nation, we do want to point out a few things about this.

images-88Was it specifically appropriate for the IRS to ask a question like that?  Well, it seems silly, more than anything, but they are tasked with the problem of trying to determine whether an organization is really what it says it is.  If anyone could declare themselves a church or religious organization and then enjoy full protection under the “freedom of religion” mantra from any scrutiny whatsoever, then don’t you think there would be a lot more churches.  As a matter of fact, any tax accountant in America would recommend that a business become a “religious organization” to avoid millions upon millions in tax payments.  So, while it does seem unorthodox and over-the-top, the reality is that the IRS has to ask some kind of question of these groups to find out whether they are the real deal or posers.  And, believe you me, there are many, many posers that they have to try to root out.

We tend to look at this from another angle.  Why have these designations to begin with?  It’s not that we have a real problem with churches or charitable organizations being tax-free.  It certainly encourages these organizations to begin and helps them carry on about their good work.  However, if the tax system were simpler with less loopholes for billionaires to get out of paying millions just because they can afford the advice to get them around it, then everyone would be paying their fair share of the pie.  And that would mean that everyone would then therefore pay less.  Is it possible that tax-free organizations wouldn’t even be necessary if the system were reformed to something that made some kind of sense.  Common sense, that is.

We all remember Mitt Romney with a straight face saying that he didn’t see what the big deal was about his tax returns.  After all, he knows there was never a year he paid less than 13% of his income.  With a straight face.  An average single American with no children can expect to pay at least 25% of their income on any given year.  So, no Mitt, no one was impressed with that.  However, it’s not his fault.  It is the fault of a corrupt system that exists only to cater to the rich, leave the bottom of the ladder paying absolutely nothing, and to create a whole faux industry in the process.  That’s right, we said it.  Tax law and tax accounting are faux industries.  They only exist because the tax system is as convoluted as it is.  The IRS only exists because the system has to have an organization to sort out everything when even it isn’t sure half of the time who owes what.

People get up in arms about a flat tax, but setting a percentage would be so consistent that it should probably be called a fair tax, not a flat tax.  And every American could take pride in knowing that regardless of their income, they made the same contribution to the country relative to their living situation that the richest person in America did.  No more getting out of it.  No more loopholes.  Poor, rich, or in between, everyone would just simply have to pay what they owe.  Payroll deductions like they have it now.  No need to file a return, because there’s never a refund and there’s never a need to pay.  Billions saved on the IRS.  A lot of tax lawyers go out of business, but with that kind of education, they can certainly find work in an even more convoluted and backwards system:  the justice one.  Even if they can’t, they’ve probably enjoyed making quite a few bucks in their profession for years, and it goes without saying that they knew how to make sure they pay the least tax possible.  Who really likes lawyers anyway?

business-tax-lawSo, if you’re up in arms about the IRS questioning a pro-life group’s prayers as being authentic, just ask yourself what brings us to this pass?  Why do they have to play games like this?  Could it be that the entire process is unnecessary?  We should certainly be enthusiastic about defending our Constitutional rights, but we should also rail against a system that is broken and in desperate need of reform.  And, as usual, neither President Barack Obama nor Mitt Romney, had he somehow won the election, were presenting the most obvious plan to fix the system:  nuke it and start over.  The lines of corruption run so deep in this business that it is unrepairable.

As our parting shot here, consider this.  From the second the tax code began, the very first deduction/exemption came from someone thinking they had a legitimate reason to not have to pay the same tax as everyone else.  And when that first entity got its deduction, what do you think happened?  The next one, and the next one, and well, here we are today, with a snakey system of deductions of exemptions that you have to have a legal education to unravel.