Originally published June 2 2013
IRS also targeted adoptive families for intimidation and oppression
by J. D. Heyes
(NaturalNews) There are a number of rules and regulations in place regarding the adoption of children, and for the most part, that's understandable; state authorities need to be sure that would-be parents are capable of caring for their adoptive children. But getting hassled by the Internal Revenue Service should not be part of that process - and yet it is.
Consider it another testament to the out-of-control cesspool of corruption the IRS has become.
USA Today says that a new report from the tax collection agency's own Taxpayer Advocate Service noted that 90 percent of families who claimed a tax credit for adopting during the 2012 filing season "had their returns flagged for further review. Nearly 80 percent had at least a partial audit of their tax return."
Singling out those who care enough to adoptAny way you look at it, that is an exorbitant number of returns for a particular group of taxpayers. But what is more frustrating is that in the majority of these cases - more than 35,000 were filed claiming the adoptive credit - no changes to the returns were made.
The advocate report said basically that the rogue agency's handling of the credit was a disaster.
"The IRS's misguided procedures, and its failure to adequately adjust these processes when it learned its approach was seriously flawed, have caused significant economic harm to thousands of families who are selflessly trying to improve the lives of vulnerable children," the report said.
To say the least.
Among them, USA Today reported, were Jake and Elfie Dotson, who have been dealing with the IRS for better than a year in an attempt to finalize their 2011 return.
The paper said Jake expected a tax refund of several thousand dollars, which will help mitigate $11,000 in fees he and his wife paid for the adoption (a figure that is excessive in and of itself). But because the IRS has yet to approve the tax credit, the agency says the couple still owes taxes.
"The IRS is telling me that I owe them money they haven't paid me, plus interest and penalties," he told the paper.
What's the problem?
You remember Obamacare's 2,700-plus pages, don't you? Well, beginning in 2010 with the law's passage, problems arose regarding tax returns and adoptive credits. Per USA Today:
That law changed the way the IRS handled the tax credit for adoptions. It raised the maximum credit to $13,170 per child and made the credit refundable and retroactive. That meant the credit could boost a family's tax refund by thousands of dollars.
A change in the law without a resultant rise in fraud, so what gives?Families hadn't qualified for the full credit in the past, but the law's new rules made families eligible for bigger refunds. "A lot of people were able to go back and amend their returns from past years," Becky Wilmoth, a registered tax return preparer specializing in returns for adoptive families told the paper.
That change boosted the total amount of refund money fourfold, thus also increasing the number of adoptive families made eligible by the law's change. And while the IRS says most families eventually got their refunds - the median was $15,000 - what is clear is that IRS auditors were also singling out adoptive couples for extra scrutiny.
The agency says it was just concerned with rooting out potential fraud, but when you're auditing 9 of 10 returns in a certain category, that isn't "concern" anymore, that is targeting - especially when audit after audit wasn't turning up any fraud.
Some experts agreed with the IRS's position that fraud concerns made the targeting necessary and proper. Chuck Johnson, president and CEO of the National Council for Adoption, told the paper he believes high refunds drove the audit effort. But again, the IRS disallowed a paltry 2 percent of the total credits claimed, USA Today reported.
"The good news is that the kind of people who adopt children don't try to cheat on their taxes," said Johnson.
Apparently not, Chuck.
Sources for this article include:
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