Se habla español!
San Antonio: (210) 223-9389 | Austin: (512) 470-8225

When the IRS Calls . . .

What DO you do when the IRS calls?

The Taxpayer’s Lifeserver is a step-by-step guide to what you can do yourself, and when you need a professional.

Technology, Business, and Taxation

The major effect of computer technology on U.S. tax administration from the taxpayer’s point of view has been a staggering increase in complexity. Aside from the single individual with no source of income other than wages, taxpayers have been forced to either retain the services of a paid tax return preparer, or to use tax return preparation software in order to file their tax returns.

Judging by the clients I see in my practice, it’s risky for a business owner to self-prepare tax returns, even with the help of sophisticated software. Even the owner of a relatively simple business, such as preparing and selling sandwiches from a single portable cart, is likely to make mistakes in determining depreciation, deductible interest, and cost of sales. Throw in a sale of business equipment, and the probability of the business owner preparing his own return correctly is very close to zero.

In the early 19th century, Luddites violently protested advances in textiles technology, such as wide-framed looms that could be operated by cheap, relatively unskilled labor. The Luddites complained that the improved technology would result in the loss of jobs for skilled textile workers. Interestingly, they didn’t argue that the machines were wicked or cursed by God; theirs was an argument from economic self-preservation (as they saw it).

Today, there are few, if any, people in the world whose wardrobes don’t include machine-made fabrics. The Luddites lost their battle, and the result was genuine progress. While some skilled weavers and knitters did indeed have to find alternative ways of making a living, for the vast majority of individuals, the invention of wide-frame looms, cotton gins, and similar technology resulted in a higher standard of living. There is no need to argue the relative merits of machine-made versus hand-woven fabric to conclude that the odds are slim of suppressing a technology that will improve the lives of almost everyone.

The modern version of the Luddites have far ranging choices of technologies about which to complain, in almost every field of human endeavor. Job loss is still one focal point, even as it becomes evident that new technologies are creating at least as many productive roles as they eliminate (at least for now). In The Spike, a book he wrote back in the 1990’s, my husband Damien Broderick argued that, eventually, machines would do all the routine work. (See A world without jobs, in which he quotes Aristotle, who said, in The Politics about 2300 years ago, “There is only one condition in which we can imagine managers not needing subordinates, and masters not needing slaves. This would be if every machine could work by itself, at the word of command or by intelligent anticipation.”)

I was thinking about this earlier today as I was reading a book of ancient Roman recipes

Hitting more at the emotional gut level than at the practicality of job loss are arguments that such new technologies are inherently frightening or even evil. But in the end, when there’s a medical procedure that will save his child’s life, or allow his child to live a normal, healthy life rather than a life of suffering, almost every father–even one who has loudly argued that genetic engineering is evil–will choose to let his child be healed.

Most individuals will choose life rather than death, radiant health rather than illness, a good night’s sleep rather than unrelenting pain. People will buy the nano-particle sunblock that goes on clear and non-greasy rather than white and gooey. Tomorrow, they will buy a molecularly manufactured toaster for $2 rather than a $25 “traditionally” manufactured model.

For as long as we have any freedom of choice in how to live our lives, our choice regarding technological advancement is not whether or not to allow it to happen but, rather, how to deal with it. And there are ethical concerns and practical quandaries in tomorrow’s imminent technologies that we need to address now.