One of the main problems with the government is that it is a monopoly. Without the pressure of competition, it has no incentive to do better. No matter how poorly it treats the “customers” (that would be us, the American citizens and taxpayers), it gets away with it because we have no recourse.

What perfectly illustrates this point is an email I received from a friend. I got permission to publish it, with the obvious caveat that my friend remain anonymous:

My recent experience with the IRS

I received a letter stating that I had missed one of four estimated payments for 2024 and that I owed for that payment, plus penalties and interest. I logged into my IRS online account (that’s another excruciating story) and checked my payment activity because I knew the check I sent in with my preprinted voucher had cleared.

I checked my Payment History and discovered that the 2nd estimated payment I made in June 2024 had been erroneously applied to tax year 2023 instead of 2024. Therefore, as far as the IRS was concerned, I had missed an estimated payment for 2024. Perhaps an IRS DEI hire entered the wrong year.

I immediately called the IRS and was promptly put on hold for over an hour. I finally spoke to a representative with a heavy Spanish accent and explained what had happened. He was able to change the payment to the correct tax year.

However, here’s the kicker: He said I was still responsible for paying the interest and penalty for failure to pay the proper estimated tax. I explained that I did pay the proper estimated tax on time, and it was an error by the IRS that caused the problem. I said the penalty and interest should go away once the payment was applied to the proper year.

The representative explained that while the system allowed him to clear the estimated payment, he could not clear the penalty and interest. I would have to pay the penalty and interest, and then ask for a refund by filing a Form 843.

So, now, instead of everything being cleared up with a phone call, I have to pay the penalty and interest because I don’t want more interest piling up. Then I have to request the IRS cut me a separate check for that payment. All this for a minor screw up by the IRS. Why is it, the government never runs out of red tape?

If the IRS were a business with actual competition, it would never get away with forcing customers to take responsibility for the business’s mistakes. The business would make it right, and the people responsible, if they didn’t have a good excuse or were often making mistakes, would be looking for a new job. If the business made too many mistakes or treated its customers badly, it would be forced to close its doors.

The IRS, however, isn’t a business. It’s a federal agency, so when things go wrong, it just gets more taxpayer money.  

Image created using AI.