Tag: IRS

The Ol’ Send-an-Envelope-Filled-with-White-Powder-to-the-IRS Trick Still Works for Some People

Besides bomb threats, another sign that the traditional tax season is in full swing is when an IRS office receives an envelope containing white powder. Today, the location in Holtsville, NY got the pleasure.

Nearly 60 workers at an Internal Revenue Service office on eastern Long Island were briefly evacuated after an employee opened an envelope containing a suspicious powder. An IRS spokeswoman says the substance was later determined to be baking soda.

No injuries were reported and it was less than hour before everyone was back to work, which barely enough time to get a bagel and a second cup of coffee. It makes us wonder if any IRS employees secretly wish for a dangerous substance to come in the mail to get out work. Day after day thinking, “God, this is awful. Maybe some anthrax will show up today. Am I that lucky? Probably not. But maybe if I concentrate real hard some will show up. [closes eyes, folds hands] Come on, anthrax. Just this once. Come on anthrax.”

Suspicious powder at NY IRS office is baking soda [AP]

Senators Introduce Bill That Would Require IRS to Produce 310 Million (or so) Receipts

Plenty of horrendous ideas get introduced inside the hallowed walls of Congress but the latest submission from Bill Nelson (D-FL) and Scott Brown (R-MA) ranks right up there:

Sens. Bill Nelson (D-Fla.), chairman of the Senate Finance subcommittee on Fiscal Responsibility and Economic Growth, and Scott Brown (R-Mass.) introduced the measure Wednesday that would require the IRS to provide each taxpayer with an itemized list, similar to a grocery store receipt, that shows where their payroll and income taxes are spent. “Taxpayers have a right to know where their money goes, how much Uncle Sam is borrowing on their behalf, and what they get in return for it,” Nelson said.

Yeah, no problem. New responsibilities under healthcare reform, chasing offshore accounts, not to mention your everyday tax compliance and enforcement. This will be a piece of cake since the the Service’s budget is getting slashed.

Senators introduce bill that would provide detailed tax receipt [The Hill]

Man Arrested for Threatening to Bomb IRS Building Would Erect Monument to Austin Plane-crasher ‘If He Had Any Extra Money’

And what’s the reason 64 year-old Leonard Mackey doesn’t have the dough to put up a statue of domestic terrorist, Joseph Stack? It’s not entirely clear but you can bet the IRS has something to do with it:

Leonard C. Mackey, of 1025 W. Wilkes-Barre St., went to the IRS office at 3 W. Broad St. around 3 p.m. saying he was “sick and tired of the IRS harassing him.” He demanded a copy of a 2008 letter indicating he no longer had money, a news release from police said. […] Mackey went on to say he would erect a monument to the guy who blew up the IRS building in Texas. That is, if he had any extra money. As he left the office, he said to the security guard who had asked him on the way in if he had a firearm that “you didn’t ask me about bombs. We have them downstairs.”

It’s sort of cute that he sabotaged himself like that.

Bethlehem: Tax dispute erupts with bomb threat, evacuation and arrest [The Morning Call]

IRS Eases Up on the Tax Liens for the Little People; Celebrities Not So Lucky

Commissioner Doug Shulman said in a statement today that the agency would make it easier for taxpayers to seek withdrawal of liens when they pay a tax debt or make arrangements to pay in installments for debts of less than $25,000. The agency also raised the dollar thresholds before liens are typically filed. “We are making fundamental changes to our lien system and other collection tools that will help taxpayers and give them a fresh start,” Shulman said in the statement. “These steps are good for people facing tough times, and they reflect a responsible approach for the tax system.” [Bloomberg]

Be Prepared for a New Flood of GOP ‘IRS Agents Will Be Invading Your Homes’ Rhetoric

President Barack Obama proposed increasing the budget for the Internal Revenue Service by 9.4 percent to hire more than 5,000 new employees, most of whom would pursue tax cheats. The president’s fiscal 2012 budget released today sets funding for the tax-collection agency at $13.3 billion, an increase of $1.1 billion from 2010, the last time a full appropriation was made for the IRS. Almost half of the increase, or $460 million, would support the agency’s tax-enforcement programs. Under the plan, the IRS would focus on fighting tax evasion through the use of offshore accounts and cheating by corporate and high-wealth taxpayers. It also would seek out fraudulent tax preparers. [Bloomberg]

IRS: Okay, Fine, Breast Pumps Are Medical Expenses

Apparently Doug Shulman & Co. have backed off the idea that a mother’s milk simply promotes a baby’s nutrition (which is a necessity not a medical condition) akin to orange juice preventing scurvy.

Breast pumps and other lactation supplies are now tax deductible as medical expenses, the Internal Revenue Service said on Thursday, February 10, reversing a long-held position. The new ruling means that families can use pre-tax funds from their flexible spending accounts and health savings accounts for these supplies. Breast pumps typically cost more than $200 and, along with supplies, can run as high as $1,000 in the first year of a baby’s life.

Breast-feeding supplies deductible, IRS rules [Reuters]

Earlier:
What Does the IRS Have Against Boobs?

IRS Announces New ‘Come Out with Your Hands Up Holding Your Offshore Bank Account Number’ Program

Back in 2009, the IRS ran a relatively successful program that encouraged those with offshore bank accounts to cop to their shady tax evading ways and all would be forgiven…with the exception of a small penalty of the assets stashed out of sight. This particular program was primarily focused on UBS customers and for those not willing to play ball, the IRS and DOJ put the screws on the Swiss bank and got them to name names.

The IRS had been hinting that maybe Offshore Amnesty 2.0 was coming and today, they made it official.

From the Times:

The Internal Revenue Service announced a new initiative on Tuesday intended to lure tax evaders, but with stiffer penalties than those offered by a previous program. Under the initiative, Americans with hidden offshore accounts have until Aug. 31 to come forward voluntarily and report the accounts to the I.R.S. in exchange for penalties that, while below what they would ordinarily pay, are still higher than those offered in an earlier amnesty program.

The good news is that the IRS swears – SWEARS! – that you’ll come to no harm, in the criminal sense:

The program makes clear that Americans who come forward will not to face prosecution for tax evasion — something tax lawyers say was more of an open question under the previous program. “When a taxpayer truthfully, timely and completely complies with all provisions of the voluntary disclosure practice, the I.R.S will not recommend criminal prosecution to the Department of Justice,” the I.R.S. said.

So unless the possibility of jail time sounds inviting, we suggest you get on this. We’re all dreaming of August right now.

I.R.S. Offers New Amnesty Deal for Offshore Accounts [NYT]

You Know It’s Officially Tax Season When Someone Threatens an IRS Office with a Bomb

Amiright? Apparently, this guy in Sarasota, Florida was just messing with everyone but, of course, that still doesn’t go over very well with the local authorities.

“About 11:45 a.m. a 59-year-old man walked into the center with a briefcase and a box,” said Sarasota County Sheriff’s Office Capt. Paul Richard. “He placed it on what’s been described to me as a counter top and told personnel there that he had a bomb,” Richard said. IRS security personnel at the office managed to subdue the man and then hand him over to deputies. The office houses 60 employees, who were evacuated during the episode. The sheriff’s office bomb squad later confirmed there was no explosive or destructive device in either the box or the briefcase.

Man threatened Sarasota IRS office with bomb [TBO]

Report: IRS Is Better at Junking Computers From Previous Decades

It appears that the IRS prompted this report from the Treasury Inspector General of Tax Administration after a previous report stated that improvements were needed in the replacing the Service’s dinosaur technology.

Employees have to be pleased that can now obtain better equipment to do their jobs, although three years to determine how to point out an Apple II or an IBM running DOS does seem like a long time.

The Internal Revenue Service (IRS) has significantly improved its ability to identify and replace aging computers, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

The IRS purchases new computers to replace aging equipment through its Sustaining Infrastructure Program. A November 2007 TIGTA report recommended several improvements to the IRS’s processes for replacing computer hardware that has reached or surpassed its useful life. TIGTA conducted the review at the IRS’s request.

TIGTA’s new report found that the IRS has implemented a process for identifying, reviewing, prioritizing, and making decisions on funding the replacement of aged computer hardware and is developing the capability to associate information technology problems with the aged hardware that caused the problem. The improved capability could result in as much as $12.3 million in cost savings and $16.4 million in revenue collection increases, according to the report.

“Taxpayers and IRS employees rely heavily on the information technology infrastructure to ensure satisfaction of tax liabilities, quick resolution of issues, and the security of confidential taxpayer information,” said J. Russell George, the Treasury Inspector General for Tax Administration. “The IRS is to be commended for these improvements,” he added.

Man Who Claimed $23 Worth of Vegetables Triggered an IRS Audit, Explains His Rationale

A couple of weeks ago, we brought you the tale of Don Dunklee, who claimed that he was audited by the IRS for a paltry $23 in vegetables from his garden. At the time, w Mr Dunklee could have come to such a strange conclusion, considering that it’s pretty obvious the IRS’s efforts at closing the tax gap would be spent in better places than the organic vegetable farmer dynamic.

And as it happens from time to time, the subject of our post reached out to us directly (Big 4 CEOs should take a hint) to explain the situation further.


You see, Don – who is a bit of inventor but not when it comes to stories about tax audits – farms as a hobby and a woman who accepted some vegetables from him stuffed a wad of cash in his pocket that he reluctantly accepted:

I work off farm for Walgreens as does my wife. We reported our entire incomes from our employer as well as the $23, and used only the standard deductions provided by the IRS as we do not have enough “expenses” to write off deductions. The $23 was a lady looking at starting her own organic farm who I refused money from. She insisted to the point she would have been offended had I not kept the money she shoved in my pocket. I kept the cash out of respect to her and reported it as additional farm income. I have a 23 acre farm that I have been building for 27 years with the infrastructure so I can have a farm business when I retire in a few years. People visit my farm to see my off grid solar/wind system, my solar charged electric scooter [Ed. note: see above], and my organic vegetable production. I give away any vegetables anyone wants as I grow much more than I can harvest for myself, in part to learn how to produce enough to make a small retirement income later on, and I like to show off my veggies/farm/lifestyle.

Then Don informed us that he fell victim to the Geithner tax malady:

I do my own taxes. I tried TurboTax for the first time (won’t again) and the $23 was reported, rightly so, as farm income. (investigator suggested I can make up to $400.00 and should consider reporting on the other income line rather than farm income during the end of our interview when she agreed our taxes were correct and made no changes). TurboTax created a form F, farm income for the $23, reported. I claimed no expenses for growing, as I do not have a true farm business.

Then Don gets to the crux of the argument behind his belief that the audit was not “random”:

Farming is my passion/hobby. Had our audit been a true random audit I believe we would have had a general agent and general tax officer doing the audit with questions and info requested related to all of my employment reported. I believe this was a targeted audit as the title of the investigator was “small business and self employed” which does not fit the nature of my return. Her questioning was often off topic from the particulars of my return (fishing?). I would not have a problem if the IRS would be honest and say something to the effect, “we would like to audit your return as we see some irregularities we need clarified.” This might help build trust in the IRS. Knowing they have powers that some consider above or outside of the law in how they deal with taxpayers I was worried. The entire process is intimidating. I do not like feeling like a criminal for being honest. I could not afford legal help, which their literature suggested, further intimidating information they provide creates the impression one is in trouble. I hope this helps clear it up a bit for you.

Giving this a little more thought, we aren’t really surprised since the IRS has shown the willingness to shake down taxpayers for a sum that wouldn’t buy you a Hershey bar in a Mad Men episode. Don told us that he doesn’t have any ill will towards the IRS but he wonders if sometimes they can be a tad misguided, “I do have a lot of respect for the IRS and their mandated task, however I wonder if their very task generates a lot of problems.”

Not sure if the IRS is into self-reflection but that’s why we have TIGTA, s’pose. Thanks to Don for reaching out to us and now that his solar-powered scooter is getting a little more exposure, KPMG (and other firms looking to reduce their carbon footprint) may have a decent alternative to the sherpas.

Area Man Pretty Sure the IRS Audited Him Because He Reported $23 Worth of Veggies on His Tax Return

How he came to this odd conclusion isn’t clear.

Donald Dunklee, a Richfield Township, Michigan, resident, says the sale of $23 worth of vegetables from his garden was enough to trigger an IRS audit.

“I understand the needs of the IRS to keep the honest people honest so to speak, but this seems like overkill to me,” Dunklee tells Michigan television news provider WEYI.

Dunklee operates a nearby drugstore and generates all the energy for his 20-acre home, the news source says. After haggling with the woman, Dunklee says he refused to take $50 for the food and instead the woman shoved $23 money into his pocket. He later reported this on his income taxes.

Another report says the whole thing went off without a hitch but Don Dunklee still felt like it was “a huge waste of time and resources.” (That’s a new one.) The Service, however, claims it was just a random audit. Right, like we’re supposed to believe that the IRS isn’t secretly mining 1040s for “hippie vegetable farmer income” to help fill the tax void.

Taxpayer Advocate Nina Olson Would Like the IRS to Quit Slapping Liens on People

Presumably this means celebrities too! That is, until the IRS can show that it’s actually an effective means of collection and not so ‘hard core.’

Olson has accused the agency of relying too heavily on an automated “one-size-fits-all approach.” She said the agency misguidedly files liens against people who have no money and no assets.

“Absent data that show liens make a meaningful contribution to revenue collection and especially in this economy, I find it unacceptable that the IRS continues to torment financially struggling taxpayers in this way,” Olson wrote in a news release accompanying the report.

Perhaps Olson has a point but then Robert Snell over at Tax Watchdog might not have a job and we’d hate to see that happen. The guy is like Raisin Bran™ on the celebrity tax deadbeat.

IRS’s ‘hard-core’ collection tactics needlessly harm taxpayers, report says [WaPo]