A few days ago, I got my Missouri state tax refund in the mail.  While I was pleased to see it, I was a bit puzzled.  I waited until the last possible minute to file (not because I owed any money to the feds, only because I was lazy...), so it has only been ~ 3 weeks since I filed.  That's rather fast to be getting a check.  I've always wondered why the state always gets me my refund faster than the IRS -- while the state clearly has fewer returns to go through, I would imagine the IRS has much more resources, even proportionally.  Perhaps not.

The real mystery is this:  in Missouri, the state tax return is based mostly on the answers you provided on your federal return.  Meaning that if you made a mistake on your federal return, your state return is almost guaranteed to be wrong as well.  So how exactly could the state have gotten a copy of my federal return, made sure it was accurate, gone over my state return, written out a check, and mailed it to my door all in just 3 weeks?  My guess is they didn't check anything.  They probably just looked at the return in general, made sure I attached all of the appropriate documents, and then just wrote me a check.  If anything looked odd, the return probably got tossed in a file cabinet of other returns for someone to review, and possibly audit.  Meanwhile, here I am happy with my check, assuming that everything was fine.  After all, why would they have sent me a check if I got something wrong?

Sadly, it is incredibly unlikely that either the IRS or the state checks your returns thoroughly right away.  They just couldn't get it done fast enough.  I'm quite sure they go over them all in detail sooner or later, but if it took me three hours to fill everything out, I can't see even their seasoned professionals verifying everything in less than a half hour.  Multiply that times the millions of taxpayers... and they couldn't possibly get through them all in a few months, let alone weeks.

I don't cheat on my taxes.  In fact, there a few deductions I don't take, just because I don't want to have to justify them.  I spent lots of time researching the various forms, rules, and other issues before I filed.  So I'm reasonably sure I have nothing to worry about.  But the issue in general still bugs me: one could easily make an honest mistake, and not know about it for quite some time, at which point it might be hard to correct.  I'm sure everyone has heard stories of people going years without even filing before the IRS noticed.  Imagine getting a letter from the IRS informing you of an audit of your tax return from five years ago.  Sure, you have the photocopy around somewhere.  But could you really explain it properly from memory with that much time passed?  Could you afford to pay fines for mistakes you didn't even realize you made a half-decade ago?

I'm very much in favor of doing away with the IRS, and the entire income-based tax system in general.  But until a consumption-based fair tax is implemented, we're going to have to live with tax returns, the IRS, and audits.  Perhaps people wouldn't loathe doing their taxes so much if there wasn't so much uncertainty to it-- between having doubts regarding the paperwork, to the ever-looming threat of an audit, doing one's tax return is always a headache.  You wouldn't think that getting part of your money back from the government would be cause for concern, but if you can't be sure they won't try to take it back again, it's hardly comforting.