One Small Reason to Give Thanks
December 11, 2011
Nobody likes paying taxes. But what adds insult to injury for so many of us is just how maddeningly complicated it all gets. If you’re like most Americans, you’ve seen your own return grow longer and more complicated over the years. Maybe you’ve noticed the new Schedule M for the Making Work Pay Credit. Maybe you’ve bought rental property and filed separate depreciation schedules for regular tax, state tax, and Alternative Minimum Tax. President Obama’s 2010 tax return ran to 59 pages. And it’s not unusual for complicated individual returns to run over 100 pages including forms, schedules, worksheets, and statements.
Of course, that’s not really surprising, given the source of all the confusion. The U.S. Government Printing Office’s own version of the Internal Revenue Code – available for the bargain price of just $179 – runs 3,387 pages. Add the IRS’s regulations, for $974 more (shipping generously included!), and you’re up to 16,845 pages. Sounds ugly, right? It is. (Trust us, we actually have to read this stuff.) But if you need any reason to be thankful this holiday season, be glad you’re not responsible for filing the country’s largest tax return.
General Electric is America’s sixth-biggest corporation and its biggest conglomerate. Originally founded by Thomas Edison in 1890, GE manufactures everything from light bulbs and refrigerators to jet engines, locomotives, and nuclear reactors. Their NBC subsidiary reaches millions of viewers daily. And their GE Capital unit, which accounts for over half of their profit, is bigger than all but six standalone banks. It shouldn’t surprise you, then, that GE files a pretty hefty tax return. Their tax department, which the New York Times reports “is often referred to as the world’s best tax law firm,” employs 975 people. They file literally thousands of tax returns every year, for every country in the world (or at least every one that requires a tax return), every state in this country, and more cities than you can name.
But nobody really cares what GE’s Vermont return looks like, right? What about their flagship U.S. federal income tax? Well, 2006 was the first year the IRS required corporations with assets over $50 million to file electronically. That year, GE spent over $500,000 just to develop their own e-filing system! Their first electronic return took a full 30 minutes to transmit – but replaced what would have been 24,000 pages of paper. (That’s 24,000 pages the IRS would have had to convert into electronic form anyway.)
Since then, GE’s return has grown even fatter. For 2010, the firm reported worldwide profits of $14.2 billion. (That’s more than the entire economies of Iceland and Jamaica.) They paid $2.7 billion in worldwide tax, but actually claimed a $3.2 billion refund from the U.S. Treasury – most of it due to losses at the GE Capital unit resulting from the 2008 financial collapse. Their actual tax return swelled to 57,000 pages. Print them all out and you’ll have a stack of paper 19 feet high!
Oh, and of course they get audited, every year. Imagine the smile that brings to everyone’s faces.
Here’s the good news. You don’t need a staff of 975 to manage your taxes. You just need a plan to make the most of every deduction, credit, loophole, and strategy the law allows. Now the bad news. Time is running out to get that plan. So enjoy the Thanksgiving holiday with your family. Brave the crowds for some Black Friday shopping if you feel like stimulating the economy. Then call us to make sure you’re not missing any opportunity to bring good things to life!