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Death and Taxes

Joanne S. Barry, CAE

I have a confession to make: I died two years ago.

You wouldn't know it if you'd met with me, traded emails or phone calls with me, or stopped by the NYSSCPA office in that time, but according to the federal government, I left the ranks of the living in May 2013. Surprised? I was too. My CPA broke the news to me last month after my income tax return was rejected by the IRS.

At first, I thought I was the victim of an elaborate April Fool's Day prank—or worse, identity theft—but neither was the case. You might call it death by keystroke: A data entry worker at the Social Security Administration (SSA) accidentally logged me into the system as deceased. It's a small error, but one that can have potentially devastating consequences. It's also not uncommon. News reports suggest that clerical errors create roughly 14,000 of us walking dead every year.

According to a study released by the SSA's inspector general in March, the agency has a hard time telling the living from the dead in other ways, too. Thanks to poor internal controls around how the SSA updates its Death Master File, some 6.5 million Americans aged 112 or older—the vast majority believed to be dead—still have active Social Security numbers. Thieves mine these accounts to collect benefits that don't belong to them or to take out lines of credit.

I signed an affidavit in order to be brought back to life in SSA computers, but resurrections don't come easily. The correction didn't immediately show up on the IRS's side, so I spent several days trying to get hold of an agent and, later, the state's taxpayer advocate—an exercise in frustration that most taxpayers can sympathize with. My ace CPA filed my paper return the old-fashioned way, and I await the IRS's determination of my fate.

Meeting the Public's Needs

The SSA and IRS often come under attack. However, when they fall short, the question we should be asking isn't, “How can this happen?” but rather, “How much more of this are we willing to accept?”

Chronically underfunded and understaffed, too many government agencies are no longer equipped to meet the public's needs. Indeed, according to an interim report from the Treasury Inspector General of Tax Administration, budget cuts have left the IRS flailing. As of March 7, 2015, about 45.6 million taxpayers tried to call the IRS for assistance; 4.2 million calls were answered. And in a report released last year, the SSA admitted that while it has built in efficiencies wherever it could, it has been “unable to complete as much program integrity work” as it would like. In their current states, the SSA and IRS are being asked to do a difficult job with one hand tied behind their back.

Mark Twain famously joked that the “report of his death was an exaggeration” after a newspaper wrongly reported him to be “grievously ill and possibly dying.” But as I went through the motions of proving my existence to government agencies, I was reminded that there's nothing funny about broken bureaucracies. In ideal circumstances, navigating these agencies is a nuisance; when there's a problem that needs to be addressed, navigating them is a nightmare.

I was lucky. As the executive director of a CPA society, I had some sense of what I was in for. Many other Americans—for example, those who have fewer resources, those who cannot afford a CPA, or those who don't speak English well—simply fall through the cracks, which could lead to financial disaster for them down the road.

This may seem like a problem for politicians, but they won't act unless we do. No matter what your personal political views are on the IRS, the agency currently performs one of the most critical functions of the federal government. Congress cannot continue to saddle this agency with new responsibilities while simultaneously underfunding its basic obligations, and then accuse the agency of failing to meet them.

Joanne S. Barry, CAE. Publisher. The CPA Journal, Executive Director & CEO, NYSSCPA jbarry@nysscpa.org.

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