Reality TV has a thing or two to teach the taxman

(by Don Cayo, The Vancouver Sun) I’m not a fan of reality TV, so I was surprised to find my interest piqued by a news release in connection with a new show, Million Dollar Neighbourhood, which features 100 financially-pressed families in Aldergrove.

 

The release, from H&Block, notes that its tax preparers went through the tax returns of the 100 families and found that fully a third of them had overlooked potential deductions that averaged $1,571. (On checking, I found that this was for three years of returns for most families, and four for a few.)

 

The value of this exercise and the attendant publicity to H&R Block is obvious, especially now with the tax season looming. If this magnitude of savings is being overlooked by a small, but possibly representative, sampling of Canadians, it highlights the question of whether people in ordinary circumstances should, like those with complex financial lives, be hiring a tax professional.

 

However to me, a guy whose primary interest is tax policy, it raises a different question. If ordinary citizens of Aldergrove are so prone to errors that cost them so much money, I think something is seriously wrong with our tax system. It should not be difficult or impossible for ordinary citizens to comply with their civic obligations. If a handful of citizens are careless and make mistakes, that’s their problem. But when when a large proportion are stymied, it more than hints that the system is as fault.

 

Federal politicians are notoriously insensitive to the myriad valid complaints about Canada’s income tax system. From time to time they go through the motions of simplifying it or making it more fair, but no end of anecdotes as well as objective analyses — which the politicians tend to ignore — make it clear that these efforts don’t work very well.

 

Here’s hoping the politicians and mandarins in charge are more sensitive to the message from reality TV.

 

And if you’ve been preparing your own tax and you’re wondering how much in potential refunds you might be missing out on, the H&R Block release offers to have one of its tax preparers look over your past three years of tax returns for free to see if you’ve missed any deductions you could claim. It will be interesting to see not only the uptake, but also what the error rate turns out to be.

 

Follow me on Twitter @DonCayo

 

To read at source, click here.

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