Out of Control

Obviously President Bush’s compassionate conservatism has yet to seep into the psyche of the Internal Revenue Service.

It started January 1 to tax debt forgiven by finance companies as taxable income. That means that if you have unpaid debt on your credit card and work out a deal with the company to pay half of what you owe right away if it will forgive the rest, IRS will make you pay taxes on the forgiven portion as if it were income.

What’s more, the rule applies not just to actual loans but also non-lending transactions such as car leases.

If finance companies don’t report the forgiven debt to the IRS accurately, they will face penalties.

Now what was that about government benevolence and corporate greed?