Tax targets

The IRS shouldn't tolerate anyone cheating on his taxes. But to go after the working poor instead of those in higher tax brackets seems improper and mean-spirited.

The IRS says American earners at all levels cheat on their taxes. Groups with some of the highest totals of unpaid taxes include those who have stashed their money in offshore accounts. Corporations fail to pay $46-billion in taxes, according to IRS estimates.

So who is the IRS going after in a new campaign to stop errors and cheating? The working poor.

Many taxpayers who claim the earned-income tax credit will face new, demanding requirements to prove they are eligible for the tax break, the New York Times reported. Most of the 4-million Americans affected will be single fathers or other family members raising dependent children. The IRS will accept only specific kinds of evidence that proves their relationship to the child and it will have to be provided in advance of the tax filing. The strict requirements are likely to discourage some who are eligible for the credit.

No cheating on taxes should be tolerated. But there is a meanness to this latest IRS action.

Those claiming the tax credit wouldn't be considered well-off. The highest income a family can have to be eligible is $34,000, and many make less. The average tax savings is less than $2,000, and these are a class of people who have fewer resources when it comes to tax preparation.

Those claiming the credit are already audited more frequently than many other groups. One in 64 of those tax returns was audited in 2002, compared with 1 in 120 returns reporting incomes over $100,000 and 1 in 400 from partnerships involving wealthy investors.

The IRS can't say it's going after the largest pot of uncollected taxes, either. Estimates of taxes not paid on offshore accounts total $70-billion and people who run their own businesses fail to pay $38-billion. The lost taxes attributed to undeserved low-income tax credits is between $6.5-billion and $10-billion.

There is nothing wrong with the IRS denying improper tax credits for the working poor. But it should put at least as much effort into collecting unpaid taxes from the wealthy and sophisticated.

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