When accounting goes unaccounted for
Considering the tone of Joe Stack’s manifesto, you’d think common courtesy would have been abandoned ages ago. Not necessarily so:
Perhaps it was a more sinister “have a great day” than we’re imagining, although the jig would have been up if he had given any indication about his plans (e.g. read the manifesto to air traffic control).
This is disappointing on a multitude of levels. On the one hand, the notion of thousands of IRS agents running around the country, kicking doors is kind of exciting.
On the other, if crazed tax-haters can’t threaten the lives of IRS Agents who can they threaten? The census only occurs once every ten years and threatening to gun down OSHA employees just doesn’t seem to be as effective.
Doug Shulman spoke at the National Press Club yesterday and assured everyone (despite what Dave Camp or Ron Paul says) that agents will not be storming your house packing heat if you don’t purchase insurance. The IRS will be counting on insurance companies to help them run identify those who are skipping on the required coverage.
He said insurers eventually will be required to file a document similar to Form 1099 used by financial institutions to report investment income. The agency will send letters to the uninsured notifying them fines could be deducted from their tax refunds for refusing to comply with the new law, Shulman said.
“These are not the kinds of things we send agents out about,” Shulman said. “These are things where you get a letter from us.”
We imagine the letter won’t be particularly friendly but it’s a far cry from jack-booted thugs pointing firearms at your head.
Shulman Says IRS Has Few ‘Punitive’ Ways to Enforce Health Law [Bloomberg BusinessWeek]
Maybe! Our imagination tends to run wild so if you’ve got reason to believe that hush money paid to Tiger’s mistresses is of no interest to the IRS, please advise.
TMZ is reporting, based on “sources — and they are good” that Tigger paid Rachel Uchitel $10 million to keep her mouth shut regarding their affair.
Or maybe we’re not giving either of them enough credit. Maybe Rachel has a tremendous business acumen that we’re not aware of and she requested a 1099 from T. Dubs.
Plus, Tiger employs more people than Alaska, so someone on his team may have been looking out for this girl. TW, on the other hand, there’s NFW he considered the problems this could possibly create. Considering the fact that he has trouble communicating, we’re guessing the financial ramifications for his F-buddies slipped his mind.
There’s a slew of “reasons” that people have for hating on the Internal Revenue Service. They’re responsible for discourse on television, they don’t observe Shabbos, perverts (alleged!), etc.But every now and again the IRS gives you a reason to say, “well, that’s nice of them,” even if it takes rainfall that makes you consider cobbling an ark together and rounding up the animals in the neighborhood.
The Service is not unreasonable. Apologetic? Never. But not unreasonable. Accordingly, if you live in eastern Massachusetts or Rhode Island the IRS took notice of the rising waters and is extending the April 15th deadline to May 11th (?).
It’s unlikely that this will garner much favor with the IRS haters outside of the Northeast but at least the Service won’t have to ignore the flood of calls from Bay State and Ocean State residents about whether they’ll still be expected file on time. Grab a bucket.
IRS will delay April 15 deadline for many in Mass. [Boston Globe]
Flood weary Rhode Islanders get tax extension [AP via Globe]
*For the militant atheists – Calm down, wouldja? It’s a religious week. Just sub “Nature” and move on.
This is the last thing the IRS needs. Well, maybe next-to-last.
“An IRS employee is charged with having child pornography on a laptop computer that police said he left in a garbage bag in a wooded area in Sterling Heights. Alan E. Erickson, 45, of Sterling Heights is charged with one count of using a computer to commit a crime and five counts of possession of child sexually abusive material, officials said.”
Dumping a laptop in the woods? And child porn to boot? Jesus. You thought the death threats against IRS agents were bad before…
IRS employee charged in porn case [Detroit Free Press]
Image source: Sterling Heights Police via DFP
If you’re a member of the AICPA the biggest benefit you enjoy is not the prestige, not the certificate that you have mounted on your wall but the Journal of Accountancy that shows up in your mail every month. It’s really solid that your firm shells out good money on an annual basis so you can add new Excel tips to your spreadsheet wizard repertoire.
JofA manages to talk to a number of high profile as well, which you would expect from a behemoth professional journal. Case in point, when we received the latest month’s issue we couldn’t help but get a little giddy seeing Doug “Help me, help you” Shulman. We flipped to the Q&A immediately after seeing his handsome mug on the cover only to find the Commish’s picture at right. It makes us think that he’s channeling Monty Burns, which some of you probably find appropriate.
The Q&A is pretty much what you would expect, touching on the new preparer regulations, “We ran a very open, transparent, public dialogue about this,” to threatening offshore tax scofflaws, “The U.S. government is getting very serious about rooting out offshore tax evasion,” and warning whistleblowers not to expect that money any time soon, “[T]his could take multiple years to get the awards out. But I’m a big fan of the program.”
A couple of more interesting statements, include how excited Dougie is that all the assignments that other government agencies don’t want, get dumped on the service, “it’s…a big compliment that we’re seen as a ‘go-to’ agency in government.”
That being said, this particular interview was certainly conducted prior to the passage of the healthcare reform bill and no mention of the IRS’ role in enforcement (or lack thereof) was brought up. Maybe if the JofA had seen the Bill O’Reilly/Anthony Weiner throwndown it would have been a stop the presses moment.
The only other thing worth noting is that pizza parlors around the country might want to tighten up the ship in the coming months, “We will build features into our technology system so if we see, say, a pizza parlor that says they had $90,000 of sales last year and it shows that they had $85,000 of credit card sales and we know that pizzerias have a lot of cash sales, that will be a red flag. We’ll use it to better target our audits, to see where there’s potential noncompliance, and then we’ll use it to better focus our resources.”
Maybe the Commish is just giving an example of what a red flag is but using this particular example rather than say, a celebrity, seem peculiar. Just leave Di Fara alone, okay?
Tax From the Top: Q&A With IRS Commissioner Doug Shulman [Journal of Accountancy]
The whole thing is worth watching but 4:17 is where it starts getting awesome.
Did you count? Congressman Weiner was rendered silent for approximately 13 seconds!
Other highlights:
Weiner: I’ll say that again – that are just lies.
Weiner: I’m answering the question, you’re making stuff up.
O’Reilly: Ask Wesley Snipes
Weiner gives the loudest SIGH we’ve ever heard around 4:30
Weiner: Watch this Bill, watch this.
O’Reilly: I asked you five times.
Best look given by each:
If you refuse to use the White House’s tax savings tool purely out of spite then you’ll be happy to know that 180 IRS locations across this great land will be open this Saturday to help you out with things like the Homebuyer tax credit, the American Opportunity Credit, the Making Work Pay credit, and the Expanded Earned Income Credit.
Now we realize that the mere thought of setting foot inside an IRS location will cause many you to break out in boils, the other option is to go to a VITA location and get assistance from one of the many college students out there that are giving amateur advice so that they have one more activity on their resumé. They’re available throughout tax season. They are volunteers, after all.
The Service is trying to make this sound way more fun than it actually is by calling them “open houses”:
“We are holding these special open houses to give taxpayers who are struggling in these difficult economic times more opportunity to work directly with IRS employees to resolve their tax issues,” said IRS Commissioner Doug Shulman. “We will host more than 180 open houses this Saturday.”
Whether Dougie will be on hand at one of the many locations to shed out his wisdom (or maybe get some advice) hasn’t been made clear.
More than 180 Local IRS Offices Open this Saturday to Help Taxpayers [IRS.gov]
How much tax would you pay on April 15 if the IRS couldn’t levy on your bank account, slap you with a lien, charge you penalties and interest, or send you to jail? Not much, eh? Then ponder the rules forcing individuals to buy “minimum essential coverage” under Obamacare.
The forced purchase of insurance is key to Obamacare. The “personal responsibility requirement” – a funny name for a requirement imposed by the state – is needed to make sure that low-risk individuals buy insurance to help keep it affordable for high-risk buyers (or, less politely, healthy young men are forced to subsidize everybody else). The penalty is considered vital to any semblance of fiscal soundness for the program. The rule is backed up by penalties and will be collected on tax returns.
The reaction of healthy young men in 2014 when this penalty kicks in will be “Dude. You’re not serious.”
And they will be right.
Caleb noted this yesterday from the Joint Committee of Taxation explanation of the penalties (my emphasis):
The penalty is assessed through the Code and accounted for as an additional amount of Federal tax owed. However, it is not subject to the enforcement provisions of subtitle F of the Code. The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty. Non-compliance with the personal responsibility requirement to have health coverage is not subject to criminal or civil penalties under the Code and interest does not accrue for failure to pay such assessments in a timely manner.
If we take them at their word – and new Code Sec.5000A(g)(2) seems to say just this – why would any sensible taxpayer ever pay the penalty?
• They can’t threaten you with jail.
• They can’t hit you with a lien.
• They can’t levy your accounts.
• There’s no interest charge, so even if you do pay it late somehow, you’ve had the interest in the meantime.
We tax preparers probably won’t be allowed to recommend non-payments to our clients, or we will be silenced by our new IRS preparer enforcement overlords, but people will figure it out in a hurry. And if you think that people will pay taxes anyway without the threat of collection, penalties or interest, then why are we wasting any money funding the IRS?
This provision means one of two things: either this penalty is a joke, and they are just kidding about the cost estimates of the bill — they will be much, much higher — or the toothless penalties are just a PR stunt that they plan to correct as soon as they can get away with it.
Since Jesse James’ tax lien is relatively small — $3,918 — you can probably chalk this up to a mistake. However, since the taxes are related to 2007, could it be that it was an oversight? A mistake? Poor judgment?
Poor judgment akin to say, inviting a tattoo model/stripper/rumored white supremacist into your bike shop to cheat on your wife? Is that sort of the same thing?
Tax debt adds to sex scandal for Sandra Bullock beau [Tax Watchdog]
In today’s celebrity tax scofflaw du jour, we learn that Ving “Why do people always have to bring up that scene in Pulp Fiction” Rhames owes the IRS over $800k from two liens, both filed by the IRS in Los Angeles.
Rhames has had trubs in the past, having liens filed against him last May as well.
It seems to that California, being in the fiscal trouble that’s it in, really needs to call on its other celebrity residents to hold some sort of Haiti-esque fundraiser for some of their fellow celebs.
Sure, it might not fix all the state’s budget problems but at least we could admire our celebrities for being financially responsible pillars of the community rather than pillars of the community when there’s an international crisis. Plus, maybe California wouldn’t have to fire more teachers.
In semi-related news, you will never, ever, EVER hear about Ludacris owing the IRS a damn thing. Not now, not ever.
“I pay more in taxes than most people would ever imagine. I guarantee you, I’m looking dead in the camera, you will never hear about Ludacris owing the damn IRS no damn money.”
Okay, financial celebrities f-ups, get on the horn and find out what the great financial mind-cum-rapper/actor of Ludacris has in store for you. Things haven’t worked out so far, so it can’t hurt to see what the man has to say.
Ving Rhames far from OK with Uncle Sam [Tax Watchdog]
As we’ve recently learned, IRS Agents are a zealous bunch. If you’re out of compliance you can bet the life of your labrador that they will run you down for the overdue tax, regardless of the sum.
Now perhaps you’ve been thinking that a little bribery might take care of things if you find yourself in a bit tax trouble. IRS Agents are human(?) after all; they fall ill to the temptations of this world just like the rest of us. And because they most likely have some sort of accounting background, they are most certainly caffeine abusers and thus, Starbucks whores.
But an Agent’s first responsibility is to serve the American Taxpayer and your attempts to tempt these civil servants with sweet, venti-sized, mega-calorie caffeinated beverages WILL NOT WORK:
Kim Oahn Thi Tran, also known as Jennifer Kim Tran, faced a tax liability of more than $13,287 for the 2006 and 2007 tax years on unreported income of $30,334, authorities said.
In hopes of lowering her tax liability, Tran sent a package on Nov. 30 to IRS revenue agent Imad Hararah that contained promissory notes and a $100 gift card for Starbucks Coffee that read, “To Imad: Enjoy,” investigators said.
Agent Hararah did not fall for this ploy. Nor did he accept the $2,000 that Tran attempted to give him. Instead this presented itself as a perfect opportunity to add charges, “On Dec. 9, Tran gave the agent $1,500, authorities said. In exchange, Hararah gave her a phony document that made Tran believe that she had a zero balance for 2006 and 2007 tax years.”
Does this guy love his job or what? Not cold hard cash nor natural stimulant will distract this man from doing his job. We can only assume that his brethren are of the same cloth and soon we’ll hear about Agents turning down dates with Lane Kiffin.
Woman charged with trying to bribe IRS agent [SF Chronicle]