Tax

Q: It's tax season--time to ponder that annual conundrum: How much of my vehicle usage can I claim as a business expense?

A: The IRS code governing vehicle use runs roughly the length of "Infinite Jest." But it doesn't have to be that complicated, says Jay Soled, a professor of accounting and information systems at Rutgers University, who has testified before Congress on tax compliance issues. "The problem is the rules are a morass," Soled says.

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Most people place a high premium on driving, and all states place a high premium on taxpayers paying their fair share of taxes. State lawmakers should connect the privilege of driving to payment of one’s income taxes. That connection is equitable and would apply universally, regardless of a taxpayer’s socioeconomic class or outstanding tax debt. How would the proposal tying driving privileges to being current with one’s income taxes operate in practice? Once an income tax assessment had been made against a taxpayer, the state would add the taxpayer’s name to a ‘‘No-Drive List.’’ When that taxpayer’s license was to be renewed, that state’s motor vehicles agency would deny his renewal application. Only when the tax in question was paid in full or, alternatively, when the taxpayer entered into an installment payment plan with the state, would his name be removed from the list, at which time he could then reapply for renewal of his driver’s license.

Almost two-billion dollars in fraud and attempted fraud this year. The figures come from the Treasury Inspector General for Tax Administration. Some of this fraud comes in the form of taxpayers claiming deductions they may not be entitled to. Advances in electronic filing make it easier to scrutinize returns, and the hard times might tempt some to cut corners or cheat. Rutgers tax expert Jay Soled says the current anti-tax climate also contributes to the fraud outbreak. According to Soled we have to be careful that we may ultimately get what we wish for if the kind of message keeps being sent, that taxes are an evil that should be avoided. 

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"It's very hard for the IRS to find tax evaders," said Jay Soled, an accounting professor at the Rutgers University School of Business in Newark and New Brunswick. "Tax returns rarely speak. It's not hard to get things under the radar screen.

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