Column for Feb. 17, 2011

I hope that your experience with income taxes will be more pleasant than mine this year. If you are one of those people who don't pay income taxes or gets back more than you pay into the system, just stop reading now. For those who work their tails off all year long, follow the rules, and pay more than their fair share of taxes, continue to paragraph two.

If you itemize your deductions as we do, the federal government would not even accept tax returns until Monday because of the need to retool their software. This was caused by lame duck session, end of the year tax legislation changes. The Internal Revenue Service could not keep up with the tax code changes in order to start accepting tax returns.

The State of North Carolina took our return on time, no problem. Or so I thought, anyway. I saw a reminder about how I can check the status of my return on the State Department of Revenue web site. I figured I would make use of that service this morning, since no refund had made its way to my checking account yet. Upon entering my identifying information, I got a message that said, "Please call [their phone number] about your refund amount." My first thought was that there was some attachment to my refund for some unknown past bill with the state. That has happened to myself and to others before.

I called the state IRS and spent some twenty minutes on hold only to be told that my return was still being processed and that I should expect it to take 45 days to process my return. OK, let me get this straight. The State of North Carolina is so technologically retarded that they can not put up a simple web page message that my return is still being processed, even though I know it was received. Then I wasted all that time on hold just to find out that information that could have been told to me in an instant over the internet.

What floored me was that the state is telling me that it will take a month and a half to process my tax return. I prepared my returns on my computer. I paid for the software and state e-filing fee so that the process could be faster and smoother. I even signed up for direct deposit so that the process could go even faster still. If it is going to take 45 days to process an electronic form that can be done instantly by their computer system, then why did we bother with the extra expense of filing electronically? We could have printed out the forms and mailed them for the cost of a postage stamp if it was going to take six weeks to process.

I am none too impressed with electronic transactions lately. When I send a payment through PayPal or other electronic service, the transaction is handled relatively instantaneously. When I pay bills through my bank's web site, sometimes it is rapid, sometimes not so much. Obviously the state Department of Revenue is in the "not so much" category.

The real slap in the face is that my refund is going to be somewhere around $1800 or more. That means that I am going to have to pay tax on that money yet again next year. The State of North Carolina hoses anyone who gets a tax refund by making us claim that refund as income the following year. This is money that was already taxed once. The money is a refund of an overpayment of taxes, not income. When that overpayment is returned to me, I am forced to count it as income yet again. That is just plain unethical.

I have more money withdrawn from my paycheck than needs to be. This is not so much so I will get a refund, since I don't enjoy lending the government my money, interest free. Rather I do that so that I don't have any surprises once a year and have to pay them. It is a personal choice. Still, that should not be counted as income twice. The state is not going to repay my money with interest. However, if I am late with a payment to them, they will charge not only interest but late penalties as well.

The government that can't process a computer transaction in a timely fashion is the same state government that is several billion dollars behind in its budget, has billions of dollars in fraud and waste, and double charges us on either tax over payments or underpayments. The state government wants to trust them with more projects, education, and our hard earned money WHY?