Sunday, January 04, 2009

IRS Demands Their Five Cents, Reluctant to Pay Four Cent Refund

Detroit attorney James Howarth is one of few Americans who is both in trouble with the IRS and is being rewarded by them.

Last November, he received a letter from the IRS demanding the money he owed them, a whopping five cents. They even threatened him with additional penalties and interest if he didn't pay.

He then received a second letter saying they owed him money instead: four cents.

However, Howarth has to request the refund since it's less than $1. And apparently they won't pay any penalties or interest. What's good for the goose is not good for the gander.

"When I owe them a nickel, I must pay them. It's not optional," Howarth told the Associated Press. "But when they owe me, I have to ask for it."

When contacted by the media, IRS spokesman Luis D. Garcia said the agency doesn't comment on individual accounts. He then asked the reporter for his name and social security number.

What's especially stupid about this case is:
  • The IRS spent $.42 to send a letter asking for $.05.
  • They paid someone at least $14 an hour to look at Howarth's account, write the letter, and stick it in the mail.
  • They then paid someone else $14 an hour to reexamine the account, write the new letter, and stick it in the mail.
  • Now they're going to pay another $14 an hour, plus check printing costs, to examine the new letter, process it, cut the check, stick it in the envelope, and mail it. For another $.42.
Even if they only take 15 minutes per step, they're still spending $11.32 to give a guy $.04.

And if I were James Howarth, I'd ask for it.
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