I don’t know if this is something that has already been exposed or if it’s something that someone needs to investigate. There are flaws, inconsistencies, and shortcomings in the Georgia income tax instruction booklet regarding how Georgia taxpayers are instructed to determine their tax liability that can result in taxpayers who are accurately following these instructions nonetheless being unfairly assessed a tax penalty for underreporting their liability. I was assessed a penalty of $109.07 plus interest because the Department of Revenue claimed that I underpaid my tax liability by $3 even though I provided the correct amount from the tax tables that are included in the instruction booklet and, in fact, the amount the DOR claims I owe isn’t even listed as an entry in the tax table. The discrepancy stems from the fact that the instruction booklet gives taxpayers the option of choosing between two methods for determining their tax liability. Specifically, the instructions state that taxpayers “can use the tax tables starting on page 63 OR (emphasis mine) the Georgia Tax Rate Schedule below” and again on page 60 that “a taxpayer can use the tax tables starting on page 63 or the taxpayer MAY (emphasis mine) use the Georgia Tax Rate Schedule.” In clearly stating that taxpayers MAY use the Georgia Tax Rate Schedule and NOT that they MUST use it, they are clearly given the option to choose whichever method that they prefer with the underlying implication being that either method is equally acceptable to the DOR when determining their tax liability. Otherwise, why give taxpayers the choice if both methods are not equally valid? Moreover, at the top of every tax table page is the underlined instruction that “This amount should be placed on Line 16, Form 500 or Line 4, Form 500EZ.” This is exactly what I did. I correctly identified my tax liability from the tax table and wrote that number on Line 16 of Form 500.
However, at the bottom of each page of the tax tables is a note stating that "the tax table is not exact" and "it is recommended to use the tax rate schedule for the exact amount of tax." Wait, what? If the tax rate schedule is "recommended," then what exactly is the purpose of the tax tables if it is presented as an equally acceptable method, yet doesn't provide the exact amount of tax or, in other words, the RIGHT answer 100% of the time, which will result in honest taxpayers being unfairly penalized by using a method that was presented in the instructions as valid and acceptable? If the DOR requires taxpayers to identify the exact or right amount of tax to pay in order to avoid being penalized, then why are we taxpayers instructed that we may use the tax tables as a viable method of determining our tax liability if the DOR is aware that the information contained within those tables is not 100% exact or correct? If the tax tables are not always accurate, shouldn't the tax rate schedule be required or mandatory rather than merely recommended and the tax tables abolished? Is the DOR unjustly trying to create an additional stream of revenue by levying unfair penalties against taxpayers who are making good faith efforts to complete their tax returns accurately or are the parties responsible for writing, reviewing, and /or approving these instructions merely incompetent? I have to wonder how many Georgians are blindly paying their penalty without questioning their veracity, thereby creating an additional stream of income for the state of Georgia based on unjustly levied assessments.
Moreover, the manner in which the instructions for determining one's tax liability is presented is flawed and only exacerbates the problem. Why is the note that the tax table is not exact and the tax rate schedule is recommended instead NOT presented at the BEGINNING of the instructions for determining tax liability, but instead buried at the bottom of every tax table page? And why is this critical information placed at the bottom of every page where it can be easily missed rather than at the top of every page when the natural tendency to search for a table entry is to start at the top or the left in order to identify the correct row or column? And given that many if not most taxpayers rely on pdf files of the tax instruction booklet rather than a hard copy to complete their tax forms, is it realistic to believe that they won't bypass that information as they quickly scroll through the document to find for the table entry they are searching for or that that information will actually be visible on their computer screen even if it's technically on the same page as the table they are seeking because that information is located at the very bottom of the page?
I just filed my protest of my penalty on the DOR website, but has anyone else encountered this issue? I've filed Georgia tax returns ever since 2000, and every year I have used the tax tables to determine my tax liability. But this is the first time that the DOR penalized me for underpaying my taxes. Yes, DOR, I'm trying to cheat you out of $3.