IRS Can Expect More Than Standard Level of Unwanted Attention for the Immediate Future
In what is the most serious escalation yet of the revelations surrounding the agency, Holder said the Justice Department and the Federal Bureau of Investigation would examine whether any laws were violated at the IRS, which has acknowledged that it selected groups with the words “tea party” and “patriot” in their names for special audits. “The […]
The IRS Scandal Has Made the Long Odds of Passing Tax Reform Even Longer
Until last Friday, tax reform seemed to be working a steady pace towards…something. I mean, Max & Dave have both a Twitter account and a website dedicated to the cause so you know they were getting serious about the thing. This kind of effort is enough to get the ghost of Ronald Reagan wandering around DC […]
Here Are Some of Things People Are Saying About the IRS Scandal
As you've probably heard by now, the head of the IRS's tax-exempt organizations divison, Lois Lerner, apologized on Friday that the agency targeted 501(c)4 organizations with "Tea Party" and "patriot" in their names. Lerner said this was not done out of political bias, because, as we all know, those words don't hold any political overtones. […]
IRS Sorry for Targeting Political Groups for Non-political Reasons
The Internal Revenue Service inappropriately flagged conservative political groups for additional reviews during the 2012 election to see if they were violating their tax-exempt status, a top IRS official said Friday. Organizations were singled out because they included the words "tea party" or "patriot" in their applications for tax-exempt status, said Lois Lerner, who heads the […]
David Cay Johnston Would Like To See More News Articles About More IRS
David Cay Johnston is no stranger to this website, though this website is possibly guilty of the crime he complained about in the Columbia Journalism Review yesterday: Last week, we pointed to a piece of news that we have yet to read or hear from most major news organizations: The federal budget deficit is going […]
These Are the Videos That Made Your Busy Season Slightly Less Awful
For some reason, earlier this year we asked you to submit videos of your busy season exploits as part of some fake contest. The idea was haphazardly thrown together and not taken that seriously, but for whatever reason1 the post sat up top for months. Anyhoo, busy season has been over for everyone for at least a week so I guess we'll wrap this thing in old newspaper and put a bow on it, so we can all move on with our lives. Right? Right.
IRS Employees’ Extra Week of Vacation Has a Few Conditions
Condition 1: They won't be paid; Condition 2: Jesus, does it matter? They won't be paid. David Cay Johnston has the scoop: The IRS told employees Friday that it will shut down entirely for five days because of the across-the-board spending cuts mandated by Congress. All IRS employees received an email Friday that cited […]
IRS to Whistleblower: “Thanks for the worthless tip. We Award You No Points.”
The Internal Revenue Service has rejected a reward claim made by a whistleblower, former banker Joseph Insinga, who had sued the agency in a closely watched case. In a letter dated April 15, the IRS told Insinga that he was not entitled to a reward. A copy of the letter was provided to Reuters by his […]
Intuit Loves That You Hate Doing Your Taxes
In the last five years, Intuit, the maker of TurboTax, has spent $11.5 million lobbying the federal government. One of the things they're lobbying against is something called "return-free filing." Never heard of it? That's weird. It's been successfully implemented in Denmark, Sweden and Spain, and only one of those countries is on the verge of financial […]
IRS Won’t Be Sorry If You Never Get Around to Claiming Your Refund
The Internal Revenue Service says it has $917 million in unclaimed tax refunds from 2009, and time is running out to claim them. The refunds are owed to nearly 1 million people who failed to file returns for 2009. Taxpayers must file their 2009 returns by April 15 to claim their refunds. After that, the money […]
The IRS Is Wasting Millions on Unused Blackberrys and Aircards Because Of Course It Is
Out of the $11.4 million that the IRS spent on BlackBerrys and Internet aircards in fiscal year 2011, $1.1 million worth of the devices went unused for three months to a year, according to the Treasury Inspector General for Tax Administration. That means that nearly 14,000 aircards and more than 750 BlackBerrys weren’t activated for a […]
Here’s Another Sad Story About a Thief Who Got Dinged By The IRS For Not Reporting Stolen Income
This poor bastard has been sentenced to a year and a day for gyping the IRS out of their chunk of the money he stole from his employer: [Jeffrey] Scher, a certified public accountant, was employed as the chief financial officer at Bodek and Rhodes, a Philadelphia-based T-shirt wholesaler. Scher received cash receipts from Bodek […]
The Situation Around the Registered Tax Return Preparer Program Has Become a Really Bad Soap Opera
In case you weren't paying attention, the IRS's Registered Tax Return Preparer (RTRP) program just got shit-canned by a federal judge. Of course, as CPAs we don't really have to care about the RTRP program because we're exempt, as are our minions, as long as we promise to micromanage them. Regardless, schadenfreude feels pretty damn […]
The IRS Was Just Kidding About Not Providing Interstate Migration Data
Last week, a number of conservative media outlets got a little bent out of shape when the IRS said that it would no longer be providing interstate migration data. The reason being that the data provided was immensely valuable because it shows how people "vote with their feet" — leaving states with high income tax […]
The AICPA Presses The IRS To Give a Bigger Break To Hurricane-Affected Taxpayers and Tax Preparers
The IRS has put a few measures in place to soften the blow from Hurricane Sandy but the ever digilent AICPA says that is not enough. And what about the tax preparers also affected by the storm? The AICPA is on it: The American Institute of CPAs has asked the Internal Revenue Service (IRS) to […]
In Case You Missed It: IRS Whistleblower Bradley Birkenfeld Is Fully Aware of His Awesomeness
If you've ever met a whistleblower, or heard one give a speech, you never get the sense that they're too caught up in their 15 minutes, marching around to the beat of their kick ass do-gooderness. Typically, it's more of a matter-of-fact story and less a reflection on the heroic moments that turned an ordinary […]
Bonus Watch ’12: IRS Whistleblowers
Don't expect this to be the standard result for any future snitches on corporate tax evaders, but the IRS did make good for at least one informant: The Internal Revenue Service awarded tax whistleblower and former UBS AG banker Bradley Birkenfeld $104 million for providing the agency with insider information in UBS's illegal encouragement of […]
New IRS Employees Don’t Always Have Someone to Show Them the Ropes
As you know, the primary purpose of Treasury Inspector General for Tax Administration (aka TIGTA) in the enormous fuckshow of our federal bureaucracy is to tell the IRS how awful they are at life. Yep! If there's any chance of IRS the sucking at something, TIGTA has likely investigated and issued a report about it. E-filing isn't […]
Maine Governor Has Had a Chance To Re-Think His ‘Gestapo = IRS’ Comment
As we mentioned earlier, Maine Governor Paul LePage created a bit of a hubbub when he made the following statement about John Roberts' the Supreme Court's decision to uphold the healthcare reform law: "This decision has made America less free. We the people have been told there is no choice. You must buy health insurance […]
Just Admit It, Choosing the IRS to Enforce ObamaCare Was Smart
One of the many beefs that people have with ObamaCare is that the IRS will be tasked with enforcing the penalty assessed to those that choose not to purchase health insurance. Joe Kristan laments: Maybe the most depressing aspect of the [SCOTUS] decision is the way it seems to endorse using the tax law as the […]
Lauryn Hill Pleads Guilty to Tax Evasion, Her Lawyer Blames Her Celebrity For the Circus
When was the last time we heard a celebrity in tax trouble complain that the only reason they're being targeted by the IRS is because they are a celebrity? The defense of Lauryn Hill's failure to file for three years is really no different, except in this case Hill's attorney (who happens to be a […]
IRS to Get Its Act Together on Whistleblower Program
The Service has heard everyone's concerns that whistleblower tips aren't being reviewed in a timely manner, rewards aren't paid, blah blah blah, so just everyone cool it while they sort this out: The IRS will work with “internal and external stakeholders” on a “comprehensive review” of the agency’s guidelines and procedures for handling whistle-blower complaints, Deputy […]
Tax Pros Don’t Need to Sweat the IRS Budget Cuts
This is the first post from our slew of freelancer candidates. The following is by Jeremy Woodward. The House Appropriations Committee has settled on an IRS budget, and it’s not good news for everyone’s favorite group of suits and ties. The $11.8 billion allocation is $1.2 billion below what they requested. Probably not enough for […]
FYI: Going Off the Grid for Your Personal Safety Does Not Constitute a Legitimate Reason for Not Paying Taxes
Last week, we learned that musician Lauryn Hill was a little behind on her taxes. Not unusual for a celebrity, many of whom are artists first and taxpaying citizens of the United States second. However, on her Tumblr, Ms. Hill set the record straight that her noncompliance was not willful and malicious, but rather 100% […]
Memo to “I’m-not-a-good-test-taker” Tax Preparers: The IRS Asks That You Take Their Competency Exam Sooner Rather Than Later
No one is saying that you can't pass this thing, but if tests aren't your bag, maybe you should move on this. So far, more than 4,800 people have become Registered Tax Return Preparers, according to the IRS. The IRS is urging an estimated 340,000 preparers required to take the test to do so as […]
Apparently Some People Filed Tax Returns In Their Pets’ Names
Everyone knows that the IRS makes silly mistakes from time to time, but presuming that the Service employees who look at these tax returns won't be fooled by a 1040 from "First Name: Mr." and "Last Name: Bojangles" seems a little reckless: According to an indictment obtained by CBS4, Mathew and Sandra Zuckerman are accused […]
Tormentors of IRS Fresno Location Have Lost Their Sense of Scatological Humor
We managed to get through tax season without any bomb/white powder/crazy man in a plane incidents at IRS locations (that we know of). That's the good news. The bad news is that anti-IRS forces never rest. Why? Because crazy never rests. Yesterday, the Service's Fresno location fell prey to a "white powder scare," which has […]
What Other Songs Are on the IRS Commissioner’s Workout Playlist?
NPR's attempt to offer up something other than the usual tax day fare includes sharing IRS Commissioner Doug Shulman's workout playlist. Yes, even bureaucrats enjoy music! [I]f you're stressing over getting your taxes done before midnight Tuesday, Shulman has some songs that might inspire you to keep slogging through that return — the same songs that […]
The IRS Could Use a Hand Here
Specifically, because a lot of taxpayers could…uh, use a hand here: A new report from the Treasury Inspector General for Tax Administration found that the combination of the weak economy, and efforts by the IRS to promote its [offer in compromise] program for helping taxpayers pay off a portion of their outstanding tax debts has […]
IRS Gets Half of the Affordable Care Act Implementation Play Money
Doug Shulman's shop is getting $500 million of the $1 billion set aside for implementing ACA: The money is only part of the IRS’s total implementation spending, and it is being provided outside the normal appropriations process. The tax agency is responsible for several key provisions of the new law, including the unpopular individual mandate. Republican […]
Doug Shulman: Five Years As IRS Commissioner Is Plenty for Me, Thanks
Come November, we're going to have a new Commish: Douglas Shulman, commissioner of the Internal Revenue Service, said he doesn’t intend to stay in the job after his five-year term expires in November. “My plan is to leave at the end of my term,” he said during a question-and-answer session today at the National Press […]
The IRS Seems To Have Its Priorities Bassackwards
The new preparer regulation system is up and running. Accenture, formerly Andersen Consulting, collects millions to process PTINs, while millions more go to Prometric, to administer the “competency exams.” Everyone, I mean, everything, is under control. Except for the little matter of billions of taxpayer dollars going out the door to identity thieves claiming tax […]
The Distaste for IRS’ Tax Preparer Regulations Has Reached Its Apex
The only question is, why did it took take so long? A nonprofit group plans to sue the Internal Revenue Service and argue that the agency’s effort to regulate tax-return preparers is unlawful. The Institute for Justice, an organization in Arlington, Virginia, that seeks to protect individual liberties, said in a statement it will file the […]
The IRS Gets Soft on Deadbeat Taxpayers
Yesterday, the IRS announced a major expansion of its Fresh Start initiative which attempts to help taxpayers unable to cover their tax bills. The Installment Agreement program has also been expanded, making it available for more taxpayers who are behind on their taxes. Under the new provisions, some taxpayers who have been unemployed for 30 […]
The IRS’ Latest Scam Warning Is For The Poors and Olds
The helpful folks at the IRS are warning seniors and other high-risk taxpayers of a new scam that lures those people into filing fraudulent tax returns. Though GC readers are obviously far too sophisticated to fall for any kinds of schemes like this, it's worth sharing anyway. The scheme tempts people with little or no […]
IRS Stopping $1.6 Billion in Mistaken Homebuyer Tax Credits Doesn’t Impress Everyone
The Service gets an 'A' for effort but also 'D' for "do more with less." The U.S. Internal Revenue Service rejected $1.6 billion in erroneous claims for the first-time homebuyer tax credit, according to a report by the Treasury Inspector General for Tax Administration. The refundable tax credit, worth as much as $8,000, was available to […]
Any PR Firms Looking for a Challenge Should Contact the IRS
But just know what you're getting yourself into: “Advancing the interests of the North Korean leadership at the moment would be harder than the IRS,” suggested Matthew Harrington, chief executive officer of public relations powerhouse Edelman U.S. The U.S. prison in Guantanamo could prove a harder sell, said [Grover] Norquist. “It’s just a little less scary […]
This Letter Is Ironclad Proof That the IRS Has a Sense of Humor
Just don't tell Doug Shulman.
Stupid Alabama Man Who Told IRS Agent That He Would Make 9/11 Look Like a Fire Drill Admits He Had a Few Beers Before Picking Up the Phone
Thomas Sitzler swears that he didn't mean any harm, can't even make a bomb, and this is all came about due to a little liquid courage. A Birmingham area man, charged with making a phone threat to blow up an Internal Revenue Service building in Austin, Texas, has entered a plea agreement with federal prosecutors […]
Maybe We Should Wait to Throw More Money at the IRS’s Problems
Wouldn’t life be sweet if our bosses gave us more money when we failed? Gee, I wouldn’t have hit on the client’s daughter at that bar if only you paid me better… Yet that’s just what we’re supposed to do with the IRS. Caleb notes that the Taxpayer Advocate pointed out all sorts of ways […]
IRS Doesn’t Seem at All Worried About Overworking Already Overworked Employees
Earlier this week, National Taxpayer Advocate Nina Olson gave her annual report to Congress. It's always a hoot as Ms. Olson's job is pretty much to tell the IRS why they suck. This year's report was critical to be sure, but Ms. Olson surprisingly seemed to take up the torch for the Service: The agency’s […]
Watch Out for the IRS Offshore Voluntary Disclosure Bait-and-switch
If your creepy uncle, known for bad behavior with underaged girlfriends, bought an ice cream truck, you’d not trust him to limit himself to selling ice cream. Last year the Taxpayer Advocate’s Office tried to force the IRS to stop luring people who have foot-faulted their foreign account reporting obligations with the promises of leniency, […]
This is Your Most Recent Last Chance to Bring That Offshore Money Home and Come Clean with the IRS
Doug Shulman believes in third chances: IRS Commissioner Douglas Shulman, who announced the program’s renewal Monday, said previous efforts in 2009 and 2011 resulted in the collection so far of $4.4 billion from 33,000 people. He said the government could gain several times that amount, as a result of both the newest initiative plus people […]
The IRS Seems Surprised That the Tax Gap Isn’t a Lot Worse
Your efforts to keep the increase in the tax gap under $100 billion is greatly appreciated. The Internal Revenue Service estimates that U.S. companies and individuals failed to pay $385 billion in taxes they owed in 2006, an increase from $290 billion five years earlier. The agency said the rate of compliance remained almost unchanged at […]
It Appears That the IRS Really Enjoys Auditing Millionaires
How do we know? Well for starters, the number audited tax returns with income over $1 million went up by nearly 50% last year. The U.S. Internal Revenue Service said it audited 12.48 percent of individual tax returns (USCBTAXR) with income exceeding $1 million during fiscal 2011, a high that was reached at a time […]
Michele Bachmann Can Take Solace in the Fact That the IRS Is Also Feeling Rejected by Iowa Today
You've probably heard by now that escaped mental patient Michele Bachmann has suspended her campaign for president. While this is upsetting for many that stand proudly around the Bachmann couldron, the congresswoman should know that while voters all over Iowa were skipping over her name with ease last night, the Iowa City school district also […]
Ohio CPAs Want Some Answers On This Whole Criminals With PTINs Thing
This is from the November issue of the Ohio Society of CPAs' CPA Voice: OSCPA submitted a comment letter to IRS Commissioner Doug Shulman and Director of the IRS Return Preparer Office David R. Williams, regarding fingerprinting of certain non-signing PTIN applicants. Written on behalf of OSCPA’s more than 22,000 members, the letter commended the […]
The Year in Taxes: Sleepwalking Through 2011
In January, the tax world was still reeling from the extension of the Bush-era tax rate cuts signed into law in December. It also allowed rich people who died in 2010 to go to their rest without paying estate taxes, making George Steinbrenner a happy ghost. It also allowed living taxpayers to make tax-free […]
Forty-three People Who Will Never Breathe Free Air Again Are Registered Tax Return Preparers
Also! Over 900 applicants had an incarceration date within the last 10 years received active or provisional PTINs and over 70% of those did not disclose their felony conviction. • 962 PTIN applicants on the IRS’s Prisoner File with an incarceration date within the last 10 years received active or provisional PTINs – 745 (77 […]
These New IRS Competency Exams Are Going To Be a Hoot
Our resident tax nerd, Joe Kristan, touched on the IRS competency exam a couple of weeks ago but yesterday the IRS officially rolled out the red carpet. So, if you prepare tax returns but aren’t a CPA, lawyer, or enrolled agent, you now have the distinct pleasure of spending $116 to spend a few hours with everyone’s favorite test vendor – Prometric – whose proctors will keep a watchful eye on you to make sure your ostomy bag isn’t a secret answer bank, that you aren’t packing heat and your gum is appropriately disposed of. What’s the point of all this, you ask? IRS Commish Doug Shulman can answer that:
“This is another major step forward in our effort to enhance tax preparation service to millions of taxpayers. People should feel assured that the person they hire to prepare their federal tax returns has a working knowledge of the tax code,” said Doug Shulman, IRS Commissioner. “The majority of tax return preparers are reputable professionals but the few bad apples cause great harm to taxpayers and the industry.”
Got it? It’s for the good of the country. Just make sure you don’t have a runny nose on the day of your test. That’ll get you in trouble.
IRS Commissioner Doug Shulman Puts Tax Preparers’ Job Security Concerns to Rest
“Perhaps the most telling indicator of taxpayer confusion over the code’s complexity is that today, 90% of individual taxpayers pay for professional tax preparation or tax software to prepare their tax returns. IRS research estimates that, over the past 10 years, the burden for the typical taxpayer has increased by about 20% and would likely be even more if they had to prepare returns themselves without any aids or tools. Moreover, we estimate individual taxpayers and businesses spend more than 7 [billion] hours each year complying with filing requirements.” [Tax-News via Tax Foundation]
Did You Know The IRS Is Four Times More Popular Than Congress?
It’s a pretty sad reflection of the current state of affairs in my homebase of Washington, DC if the IRS, Paris Hilton, Nixon circa Watergate and the BP oil spill have a higher approval rating than the 112th Congress.
According to Chris Cillizza in WaPo, the only thing less popular than Congress is Fidel Castro.
And as we already know, the Fed is less popular than the IRS too.
Layoff Watch ’11: The IRS Says Tomato
You may have heard some carefully coiffed pols shouting about the need for our government to “cut spending.” If you’re a Republican, this means everything is fair game with the exception of the defense budget. For Dems, it’s entitlements. Since these two sacred cows of the federal budget dare not be touched, all the stuff in between is on the chopping block. One of the easier areas of government for pols to offer up for sacrifice is the Treasury Department, specifically the IRS. Because GOD KNOWS we don’t need “a goon squad 5,000 IRS agents tromping around the country.”
It appears that all the budget thumping has worked and the IRS is looking for volunteers to help move this along:
The Internal Revenue Service has offered buyouts to 5,400 employees as it begins preparing for a likely budget cut of more than 3 percent.
The agency, which had 94,711 workers in fiscal 2010, plans to accept no more than 1,600 buyout applications. A second round of buyouts could follow. The Obama administration has said that as many as 4,000 IRS jobs could be cut over the next year, including some that would reduce tax enforcement and collections.
“This is really focused on trying to deal with the current budget situation and the uncertainty that we’re facing at this point in time,” Beth Tucker, deputy IRS commissioner for operations support, said in an interview today.
IRS officials directed the first round of buyout offers to back-office employees who don’t interact with taxpayers. A potential second set of cuts would affect “a wider range of employees who deal directly with taxpayers in service and enforcement matters,” commissioner Douglas Shulman wrote in a Nov. 4 memo to employees.
First off, putting 4,000 people out of work won’t make for a balanced budget. Secondly, I’m not saying these “buyouts” are actually “layoffs” but if you consider the fact that these “buyouts” include current employees will receive money and not be required to report to their cubicles EVER AGAIN sounds pretty similar to how “layoffs” work. Maybe it’s just me.
IRS Offers Buyouts to 5,400 Employees [Bloomberg]
IRS to Allow Deduction of Medical Expenses for Those Diagnosed with Gender Identity Disorder
When nature makes a mistake, it can be expensive to repair. Rhiannon O’Donnabhain long suspected that nature had mistakenly assigned him to the wrong team, and after growing up male, fathering three children, and getting divorced, looked into fixing that. A diagnosis of Gender Identity Disorder (GID) was reached, and the process began.
There was a lot involved. The Tax Court says the process included:
– 20 weekly individual therapy sessions.
– Hormone therapy
– facial surgery
– genital surgical sex reassignment
– breast augmentation surgery
This process continued under the watchful (but not free) observation of a therapist.
Now female, O’Donnabhain deducted $21,741 in medical expenses related to the reassignment on her 2001 return. The IRS objected, but the Tax Court upheld her medical deductions for all but the breast augmentation (they said that was cosmetic, not medical).
The expert testimony also establishes that given (1) the risks, pain, and extensive rehabilitation associated with sex reassignment surgery, (2) the stigma encountered by persons who change their gender role and appearance in society, and (3) the expert-backed but commonsense point that the desire of a genetic male to have his genitals removed requires an explanation beyond mere dissatisfaction with appearance (such as GID or psychosis), petitioner would not have undergone hormone therapy and sex reassignment surgery except in an effort to alleviate the distress and suffering attendant to GID. Respondent’s contention that petitioner undertook the surgery and hormone treatments to improve appearance is at best a superficial characterization of the circumstances that is thoroughly rebutted by the medical evidence.
Now the IRS has changed its mind. In an Action on Decision published yesterday the IRS said that they will follow the Tax Court’s decision and will allow gender reassignment costs as a medical deduction for diagnosed GID.
Unfortunately, there still is no known medical fix for Accountants Personality Disorder. Medicine remains helpless to treat the many rock stars trapped in CPA personalities.
Note: The IRS Does Not Appreciate You Not Reporting Your Embezzlement Gains
Let this serve as a warning to any would-be embezzlers out there, if you steal, you better report it to the IRS.
42-year-old Collette Snyder of Timonium, MD pleaded guilty earlier this month to filing false tax returns in 2007 and 2008 after she neglected to claim over $382,000 embezzled from her former employer, Towson, MD-based Maple Leaf Title.
As part of her duties at the title company, Snyder had signature authority over the company’s operating, settlement and recording accounts, which allowed her to begin embezzling money from MLT accounts starting in 2007. She deposited company checks directly into her personal bank account, as well as made checks payable to her husband without his knowledge, forging his signature to deposit those checks in an account he was not aware of. At that point, Snyder had been an employee of MLT for two years.
Snyder took around $149,560 in 2007 and $232,968 in 2008. These embezzled funds were used to purchase jewelry, a BMW, trips, home improvements and private school tuition.
Because reporting this money to the IRS without it clearly declared on her W-2 (despite her writing “payroll” in the memo section of company checks she wrote out to herself) would have alerted authorities to the fraud, Snyder neglected to mention the ill-gotten gains. This resulted in an estimated tax loss of $115,529.37 for her 2007 and 2008 returns.
Due to the embezzlement by Snyder and MLT President Anthony Weis, MLT was unable to perform its duties as a provider of settlement services. With MLT’s escrow account drained, existing mortgage notes could not be paid off by MLT, meaning clear and free title could not be passed to the new lender and borrower of those notes. An insurance company that had issued title insurance policies to the borrowers guaranteeing clear title ultimately paid out $3.9 million to financial institutions that held mortgage notes.
Weis pleaded guilty to wire fraud, was sentenced to 78 months in prison and was ordered to pay restitution of $4,007,705, which includes the loss to the title insurance company and the expenses of the individual victims. He began his sentence in May of this year. The interesting part of this story is that Weis stole money intended for his clients’ real estate closings. And then Snyder stole from the company. Birds of a feather…
Snyder faces a maximum sentence of three years in prison and a fine of $250,000. U.S. District Judge Catherine C. Blake has scheduled her sentencing for February 3 , 2012 at 11:00 am.
“Mortgage fraud adds to the underground economy that erodes the integrity of our tax system and threatens the financial health of our communities. IRS Criminal Investigation is committed to ‘following the money trail’ to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice,” said IRS – Criminal Investigation Special Agent in Charge Jeannine A. Hammett.
IRS Office of Chief Counsel Not in the Market for Any New Blood
After just telling you why an accounting career path may be a little more secure than law, a friend of GC passed along this little bit of news from the IRS’s Office of Chief Counsel:
From: [IRS Office of Chief Counsel]
Date: Mon, Oct 17, 2011 at 12:55 PM
Subject: RE: Chief Counsel Honors Program
To: [IRS Counsel Hopeful]Thank you for applying to the Office of Chief Counsel. Unfortunately, we will not be hiring under the Honors Program for fall 2012. We appreciate your interest and hope that you will consider us in the future. Thank you.
Attorney Recruitment & Retention Office
Office of Chief Counsel, Internal Revenue Service
On the other hand, if you’re interested in running a IRS garage sale, they do have some extra junk on their hands.
Will JK Harris and TaxMasters Join the Tax Lady in the Late-Night-Tax-Problem-Solver Body Count?
“Pennies on the dollar” may be a great pitch on cable television, but it’s not a surefire business plan. Desperate taxpayers who have paid money up front to JK Harris to resolve their tax debts at a discount are joining the IRS as potential “pennies on the dollar” creditors now that this leader in the tax settlement industry is filing for bankruptcy protection.
This is the second major blow this year to cable TV ad revenues. Earlier this year “Tax Lady” Roni Deutch gave up her law license in the face of charges that she took fees up front to resolve tax debts and failed to follow through.
Tax nerds see the late night ads when we get home and wonder how these outfits manage to get such great deals out of the IRS when getting the Service to actually forgive tax debts is like pulling teeth from a grumpy rhino for the rest of us.
TaxMasters now stands as the biggest remaining player in the TV tax settlement business, but they have their own problems. They were de-listed last month from the OTC Bulletin Board to the pink sheets for failing to file their 10-Q due August 15. The last reported trade for Taxs.pk is at 13 cents. They have also been sued by the Minnesota Attorney General for allegedly deceptive practices. ABC News reported on the suit:
The Minnesota attorney general says many of the company’s employees are skilled tele-marketers who have little knowledge of the complicated tax issues faced by people who have fallen behind in filing their returns or making tax payments. “When you call, you think you’re talking to a tax professional,” said Swanson. “You’re really talking to just a salesperson who’s trying to get you to sign up.”
So maybe the secret is that the late night settlement outfits are staffed by telemarketers who just happen to be awesome at selling pennies-on-the-dollar deals to the IRS. If that’s true, though, they seem to be having a lot of trouble turning what would truly be a remarkable and valuable skill into profits.
IRS Stops Short of Requiring Tax Preparers to Go Through a Full Rectal Exam to Pass Suitability Check
But fingerprints, on the other hand, those will be necessary.
Certain tax return preparers who must pass a suitability check will have to provide their fingerprints so that a Federal Bureau of Investigation database search can be conducted. Generally, the fingerprint requirement will affect those preparers who currently have provisional PTINs.
Under the current proposed regulations, any participant in the PTIN, acceptance agent, or authorized e-file provider programs who resides and is employed outside of the U.S. will not have to be fingerprinted to participate in these programs. Those preparers, however, must comply with all the other elements of the suitability check. In addition, the Treasury Department and the IRS are continuing to study which additional requirements should apply to people outside the U.S. Any additional requirements will be set forth in future guidance.
Attorneys, CPAs, enrolled agents, enrolled retirement plan agent and enrolled actuaries also are expected to be exempt from the fingerprinting requirement at this time. However, they are still required to answer all the suitability questions on the PTIN application, such as whether they have been convicted of a felony in the previous 10 years. Individuals participating in the PTIN, acceptance agent, or authorized e-file provider programs also are required to meet any other requirements of the programs in which they are participating.
If you’re weren’t sufficiently annoyed with the IRS’s new oversight regulations. This might do the trick.
A Bright Student Would Never Leave Their Backpack at an IRS Office Unattended
A suspicious backpack was found at an IRS office Ocala, Florida yesterday that resulted in the 100 employees being evacuated from the building and also business in the surrounding area. In this day and age of misplaced IRS hating, authorities always approach these situations with caution and swiftly destroyed the pack after viewing the X-rays noting notebooks and “an electronic device with wires.” The contents turned out to be nothing more than someone’s psychology textbook, notebooks and a tape recorder, among other school-y items. This will be the best excuse that psych prof will ever hear. [Ocala]
Is It Impossible for a Dancing With the Stars Champion to Get A Decent CPA?
I only ask because Kelly Monaco could use one. Robert Snell reports that she owes about $68k to Feds which is odd considering she beat the likes of Evander Holyfield, J. Peterman, and Joey from New Kids on the Block. Can’t someone help the girl out? And not with the tango. [TW]
Look for the IRS on an Upcoming Episode of ‘Hoarders’
As of September 2010, the tax agency had 80,606 items in storage, of which 28% — or 22,486 items — had been there for at least a year and a half without being used or moved, according to [a TIGTA] report. Those items took up 34,194 square feet of warehouse space costing about $862,000 in rent annually. [WSJ]
Here Are Two Examples of Things Not to Say When You’re at Your Local IRS Office
Let’s open with, “If I don’t see [so and so], I will blow this place up.” That’s a definite no-no. Also to be avoided would be statements such as, “You’re gone. You’re all [redacted but I’m guessing it was “fucking”] gone. You’re gonners.” And yet that’s what 48 year-old Paul Weber did in La Crosse, Wisconsin. What’s especially odd is that Weber didn’t make these statements in immediate succession. He first asked for “Kevin” then made the threat, bolted the office only to return and make the second threat. I guess Weber felt like returning in order to take a stand. Which is more than we can say for the Democrats in Madison.
[via La Crosse Tribune]
IRS Criminal Investigation Unit Bringing the A Game
You’ve been warned, scofflaws.
The inspector general audit found that the criminal unit closed 4,325 cases in fiscal 2010, well above its goal of 3,900, a mark the unit did not hit in 2009.
The average investigation, meanwhile, took exactly one year, a roughly 9 percent improvement over 2009, and the number of convictions in legal source tax cases also rose 7 percent from 2009 to 2010, and has jumped close to 23 percent since fiscal 2006.
As the audit points out, the unit’s performance also improved even as its staffing numbers decreased by roughly 2 percent since 2006.
And they probably all carry shotguns.
IRS hitting criminal investigation targets [OTM/The Hill]
IRS: Get Off Our Backs About Following Up with Taxpayers That Suck at Math
The IRS’s naggy watchdog, the Treasury Insepector General of Tax Administration, has released a new audit that found the Service doesn’t follow up on math errors quickly enough and that they should start picking up their game, especially in the case of taxpayers who are trying to utilize the Earned Income Tax Credit. The IRS, who is normally looking to do things better, did not appreciate the sentiment:
[T]he IRS was cool to the report’s recommendations, asserting that it has limited resources and noting that it usually sends interim letters to taxpayers if their cases will not be handled within 30 days. The agency’s Richard Byrd also noted that the IRS receives some 20 million paper letters each year. “While important, replies to math errors represent a small fraction of our overall inventory,” Byrd wrote.
Seriously. They’ve got an over-eager AICPA to deal with.
[via OTM/The Hill]
For Reasons Unknown, Some People Are Listening to Mike Huckabee Talk About Taxes
The House of Representatives’ Ways and Means Committee held a hearing yesterday to discuss how to best reform the Internal Revenue Code.
Oddly, former Republican Presidential Candidate and conservative stud of the Fox News stable, Mike Huckabee, was invited to give his thoughts on the matter which include eliminating the IRS and replacing it with the dead in the water FairTax:
[Huckabee] is urging Congress to eliminate the Internal Revenue Service, along with taxes on income, payrolls and estates, and replace them all with a single retail sales tax. Huckabee told the House Ways and Means Committee today that Congress should pass legislation to achieve those goals, dubbed the FairTax, which is popular with many Republican voters even as it makes little legislative progress.
Now maybe Huckabee secretly crammed in rigorous tax study during his one year at seminary but this is a guy who was convinced Donald Trump was going to run for President.
Huckabee Tells Congress to Scrap IRS for Single Retail Sales Tax [Bloomberg]
IRS Agent Wants to Know If There’s Life After Government Work
Welcome to the when-do-the-blackouts-start edition of Accounting Career Emergencies. In today’s edition, an IRS revenue agent is thinking about the future and wonders if there is anything to look forward to after a stretch inside the House of Shulman. Will he be greeted with contempt or disdain by potential employers outside of the Treasury Department?
Trapped in your job? Not sure if you can bottle up your rage during your upcoming compensation discussion? Need ideas for your next [email protected] and we’ll come up with something to bring everyone closer together.
Back to the Shulman Soldier:
Dear Career Advice Brain Trust,
I am currently a freshly minted IRS revenue agent in the Northeast right out of school. I’m the guy that audits the tax returns of small business and the self-employed (Schedule C’s and 1120’s). I’ve been at the job for about 10 months, and lately I’ve been starting to wonder: if this whole IRS thing doesn’t pan out, what are my options? Do public accounting firms of any size see any value in the experience gained here? From what I’ve experienced, employment at the IRS is a one-way street, either attracting grads with the ink still wet from their degree, or mid-career public accountants who value personal and family time more than money. Since I’m a young grad with no family to speak of, I feel like a lot of the non-monetary benefits are lost on me.
This job has its pros and cons. It’s probably one of the safest jobs in the country for anyone with an accounting degree, and it’s borderline illegal to work more than 40 hours per week because we’re unionized. Supposedly once you’re in for a few years, you can do “anything you want” within the organization, but I find that hard to believe because due to our reduced FY 2012 budget, we’re the last class to be hired for a while, so who is going to keep doing my job when everyone goes to do “anything they want?” Also, after 3-4 years, the salaries plateau big time, and we definitely make less than our public accounting counterparts throughout our careers. Furthermore, it literally takes an act of Congress to get anything substantial changed.
So my bottom line question to you (and the readers) is this: if I wanted to jump ship and go somewhere that my title carries a little less universal hatred, as well as advance my career prospects, what could I expect for opportunities, particularly in the public accounting sector?
Sincerely,
Agent Curious
Dear Agent Curious,
I’m happy to say that you’re first IRS agent to come to us for advice. Whether that means you value what we have to say or you’re simply desperate isn’t clear but regardless, thanks for reaching out.
Now then. Your problem. Personally, I feel as though the stigma associated with working for the IRS is a little overblown. Just because some of your colleagues chase down loose change and politicians call you names, that doesn’t mean you don’t have skills that aren’t valuable for private employers. The knowledge you are curating about small businesses and their compliance issues are extremely valuable and many CPA firms would gladly talk to you about your experience and how it will work for them and their clients.
Furthermore, with your inside knowledge about the Service and how is picks and chooses returns for audit, you’ll be able to better serve your clients by saying, “I assure you this will result in a Young Buck-esque raid of your business.” This knowledge of the inner workings might even be more valuable than what you actually learn on the job.
Right now, your best opportunities would be with public accounting firms that specialize in tax compliance for small businesses. Just like any other job, if you are able to jump around inside the Service and see various types of returns (partnerships, larger businesses), your skill set will be even more valuable. A few more years doing Doug Shulman’s dirty work could pay big dividends down the road.
Any former/current IRS agents out there with insight? Drop your knowledge in the comments.
About 100,000 Tax Preparers Sorta Forgot Those Identification Number Rules Went into Effect This Year
For those of you that haven’t nailed down the CPA yet, hopefully you’re not amongst those receiving nastygrams from the IRS for not complying with the new ID requirements.
And, on behalf of the thousands of tax preparers who did comply with the new rules, Doug Shulman doesn’t appreciate your apathy, “The vast majority of federal tax return preparers complied with the rules. We owe it to the compliant tax preparers to make sure that everyone is on a level playing field.” [Bloomberg]
AICPA Enthusiastically Offers the IRS Its Help Developing the Registered Tax Return Preparer Exam
Not unlike the overachiever that sits in the front row of class waving their outstretched hand like some ecstatic cruise ship passenger, the eager beavers at the AICPA have put the IRS on notice that they are willing and able to help out with the registered tax return preparers (“RTRPs”) exam.
As the national professional organization of certified public accountants comprised of approximately 370,000 members, the AICPA is well situated to provide input to the IRS on the technical issues related to developing and administering competency examinations. AICPA members provide services to individuals, not-for-profit organizations, and small and medium-sized businesses, as well as America’s largest businesses.
The AICPA offers to assist the IRS build on the Service’s already significant experience with the Special Enrollment Examination. Our own experience with the Uniform CPA examination has shown us that there are a number of critical steps in the test development process, including: (1) defining the material to be tested; (2) developing the test questions; (3) pre-testing or trying out test questions; (4) constructing and reviewing test forms which require that the final test be fair to all candidates regardless of which test form they take; (5) reviewing candidate comments on test questions; (6) protecting the security of the examination (including the examination questions and candidate data); and (7) conducting an annual review of the quality of the examination.
Despite the hint at a compliment (e.g. “Service’s already significant experience”), you can’t help but think that AICPA doesn’t quite trust the IRS to pull this off. What with the security issues, lack of warm bodies and beating terroristic threats off with a stick.
[via AT]
Florida Mayor Relates to Constiuents By Getting Slapped with a Tax Lien
A true man of the people:
The Internal Revenue Service has filed a lien against Miami Springs Mayor Zavier Garcia for nearly $200,000 in unpaid taxes. The lien, filed June 8, means the IRS would get paid before Garcia and his wife if they attempt to sell their home or other real estate. Garcia said the IRS issued the liens after his new accountant detected errors in previous years’ tax returns. Garcia said he voluntarily brought the errors to the agency’s attention, and plans to pay the money as soon as his finances permit.
IRS Database Security Could Use a Tuneup
Some of the 2,200 databases that the IRS uses to manage and process taxpayer data are not configured securely, are running out-of-date software, and no longer receive security patches.
Nor has the IRS fully implemented its plans to complete vulnerability scans of its databases — although the IRS spent more than $1.1 million in software licenses and support costs for a database vulnerability scanning and compliance assessment tool, it did not fully implement it. TIGTA used database vulnerability assessment software to conduct remote scans of the primary databases for 13 applications supporting critical tax administration business processes. Its review found high and medium risk vulnerabilities, as classified by the scanning tool in each of the 13 databases. [TIGTA via TaxProf]
Some IRS Employees Living by the Motto ‘Do as I Say, Not as I Do’
There’s no shame in asking for help, IRS employees, if that’s what this is about. Don’t forget that the Commish isn’t too proud to ask for help.
In 2008, the year for which most recent data was available, IRS computer programs flagged compliance issues for more than 8,000 of its 109,469 employees and ultimately determined that almost 2.8% had not complied with the law. But those monitoring systems missed 133 additional employees who were potentially not compliant with tax law over a two-year period, according to the audit. The employees were flagged for potentially filing their tax returns late, paying their taxes late, not reporting all of their income and at least one example of a criminal investigation with an additional tax assessment.
Treasury Report: IRS Must Beef Up Oversight Of Its Own Employees [Dow Jones]
Thanks to the IRS, Republican Presidential Candidate Herman Cain Only Made Enough Money to ‘Buy New Golf Clubs and Move to Atlanta’
Soon-to-be failed Presidential candidate Herman Cain is best known for being the former CEO of Godfather’s Pizza. When he took the job in 1986, the Journal reports “Mr. Cain cut costs and closed unprofitable locations and said that he returned the business to profitability in just 14 months.” An impressive feat to be sure and he continued to sling pie as the CEO until 1996 when he presumably figured he could cash in nicely.
Unfortch for Cain things didn’t really work out. And whose fault would that be? The IRS, of course!
Mr. Cain said that in 1996 he struck a deal to sell his stake in Godfather’s to his partners. That’s when the IRS showed up and commenced an audit of his tax return for the year 1994, coincidentally the year he publicly challenged President Clinton on the impact of his health-care reform plan. Simultaneous audits of Godfather’s and Mr. Cain’s partners were quickly concluded, but Mr. Cain said that the audit of his personal finances dragged on until 1999.
When he finally concluded the sale of his Godfather’s stake, Mr. Cain said that its value had fallen by 75% and yielded only enough money for him to “buy new golf clubs and move to Atlanta.” As for the IRS, they claimed he owed $1.8 million in back taxes, but he said that as soon as he appealed this decision, they immediately dropped the claim and asked only for $40,000 to cover interest on “the money I didn’t owe.” Outraged, he nevertheless paid the bill to resolve the matter. He said that such treatment at the hands of the IRS happens all the time.
Godfather vs. Tax Man [WSJ]
Doug Shulman: Cutting the IRS Budget Will Do Nothing to Help the Deficit
“Cuts such as those in the House budget resolution would actually increase the deficit by decreasing revenue,” IRS Commissioner Douglas Shulman said to the Senate Appropriations Subcommittee on Financial Services and General Government.
He said the House proposal would cut $2 billion from the agency’s budget next fiscal year. “Cuts of this magnitude would be substantial and affect all of IRS operations,” from answering taxpayers’ questions on the phone to being able to conduct audits, he said. Shulman said that for every dollar invested in the IRS, the agency collects roughly $200 in revenue. [Dow Jones]
Report: IRS Is Doing More with Less, Still Needs More
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In a report released today, the inspector general said attrition and a heightened workload have combined to leave the IRS understaffed.
The new hires in the agency’s small business and self-employed division resulted in a net gain of just 580 revenue officers by the end of fiscal 2010, according to the report. The IRS watchdog predicted a net gain of 127 revenue officers by the end of fiscal 2012. The study could affect the debate over funding for the agency. It comes two days before IRS Commissioner Douglas Shulman is scheduled to testify before a congressional panel on the agency’s budget. The inspector general warned that, unless the IRS is fully staffed, compliant taxpayers are at a disadvantage. “If the IRS does not have a sufficient number of qualified” revenue officers, the report said, “it could create an unfair burden on the majority of taxpayers who fully pay their taxes on time.” [Bloomberg]
Man Sues IRS for Giving Him a Headache
Before you start ringing up the lawyers, you should know what this guy’s head pain was caused by something that Doug Shulman has very little control over.
A New Orleans resident has filed a lawsuit against the Internal Revenue Service after a portable office wall fell and struck him in the head. Willie B. Jolliff, Jr. filed suit against Internal Revenue Services, East Skelly and Jones, Lang, LaSalle Americas Inc. on May 16 in federal court in New Orleans.
According to the lawsuit, Jolliff was hurt by the wall on May 15, 2010, resulting in headaches and a neck injury.
The IRS is accused of negligence by failing to maintain a safe environment for office visitors, failing to properly maintain and secure the portable office wall and failing to warn of a potentially dangerous condition.
IRS customer claims headaches in personal injury suit [Louisiana Record]
IRS Filings Show This Whole ‘Rapture’ Thing Might Prove Quite Lucrative
According to their most recent IRS filings, Family Radio is almost entirely funded by donations, and brought in $18 million in contributions in 2009 alone. According to those financial documents, accountants put the total worth of Family Radio (referred to as Family Stations on its official forms) at $72 million. With those kind of financials — and controversial beliefs — it’s no wonder skeptics have accused the group of running a scam. [CNN via NetNet]
IRS Not Too Forthcoming with the Success of Wealth Squad
Remember the “Wealth Squad“? They’re the jolly bunch of IRS examiners that focus their audit efforts on the richest of richies because it’s become clear that wealthy people are incapable of being honest on their tax returns (plus, poor people don’t have any money).
This elite group was formed in 2009 and based on the IRS’s count, they’ve been some busy little taxbusters:
According to the agency, audit rates among taxpayers who reported $10 million or more in income in 2010 jumped to 18% from 10% in 2009. Among taxpayers who reported $5 million to $10 million in income, nearly 12% were audited, compared with 6% in 2008.
Seems like a nice little ramp up in activity which means a boost to the Treasury’s piggy bank, right? If that’s the case, the Service isn’t exactly thumping their chests about it:
The IRS has refused to report how much money the “wealth squad” has brought in. This isn’t so difficult. Britain, which set up a similar “rich squad” around the same time, has announced that its squad netted £162 million ($ 263 million) in 2010-11, up from £82 million the year before. Those amounts are on top of the taxes already paid by the rich who are being targeted.
Conventional wisdom tells us that if the IRS were to release these numbers, it would probably make for some nice political fodder and so the Administration is telling them to keep a lid on the results. If you thought the soundbites about new 16,500 IRS agents were bad, imagine if the IRS actually reported how much more money it got rich people to fork over. On the other hand, it could be that the Service is juking the numbers and the Squad has been a complete failure. Either way, it seems that the IRS wouldn’t gain much by shouting these stats from the rooftops.
CPA Bob Martin Tells Fox the IRS Has Declared War on Tax Cheats (VIDEO)
Note: “tax cheats” means you if you are hiding money in foreign lands, running a small business, and/or self-employed. You’re off the hook if you’re in charge of the Treasury, apparently.
Gird Your Loins, Unscrupulous Tax Preparers
The IRS is on you like white on rice.
The Internal Revenue Service is taking steps to stop tax preparers with criminal tax convictions or permanent injunctions from preparing tax returns. This is just one of several recent moves to improve the quality and oversight of the tax preparation industry.
More than 700,000 tax preparers nationwide have registered with the IRS and obtained Preparer Tax Identification Numbers (PTINs). This nine-digit number must be used by paid tax return preparers on all returns or claims for refund. Paid preparers must renew their PTINs annually to legally prepare tax returns.
“We owe it to all taxpayers and the many honest tax return preparers to remove the relatively small number of bad actors from the tax preparation industry,” said Doug Shulman, IRS Commissioner. “Just one unscrupulous tax return preparer can cause a lot of financial damage to both taxpayers and the tax system.”
Nineteen ne’er-do-wells have already gotten word that they’ll be stripped of their PTINs for unseemly behavior of some kind or another. Best get that CPA so you don’t have to mess with the whole thing…until you the IRS lumps them in too.
Apparently This Is the IRS Being Funny About Taxes
We can’t come up with a better explanation for their Tax Quotes page. Treasury regulations forbid the IRS from implying that inclusion of a quote here means they are at all endorsing tax revolt and/or humor in any form.
“Taxes are what we pay for civilized society.” — Oliver Wendell Holmes, Jr., U.S. Supreme Court Justice
“I am proud to be paying taxes in the United States. The only thing is – I could be just as proud for half the money.” — Arthur Godfrey, entertainer
“People who complain about taxes can be divided into two classes: men and women.” — Unknown
“No government can exist without taxation. This money must necessarily be levied on the people; and the grand art consists of levying so as not to oppress.” — Frederick the Great, 18th Century Prussian king
“Like mothers, taxes are often misunderstood, but seldom forgotten.” — Lord Bramwell, 19th Century English jurist
“The best measure of a man’s honesty isn’t his income tax return. It’s the zero adjust on his bathroom scale.” — Arthur C. Clarke, author
“Next to being shot at and missed, nothing is really quite as satisfying as an income tax refund.” — F. J. Raymond, humorist
A tax loophole is “something that benefits the other guy. If it benefits you, it is tax reform.” — Russell B. Long, U.S. Senator
“The hardest thing in the world to understand is the income tax.” — Albert Einstein, physicist
“Taxation with representation ain’t so hot either.” — Gerald Barzan, humorist
“Income tax has made more liars out of the American people than golf.” — Will Rogers, humorist
A Prison Guard Is Now Equally as Effective at Busting Tax Cheats as the IRS
As we have learned, residents of our prison system have proven to be quite savvy at obtaining tax credits, including those intended for first-time homebuyers, alternative-fuel vehicles as well as filing bogus tax returns in order to receive refunds. These scams go along swimmingly until the IRS gets wind of it (anywhere from months to years later), at which time local (and sometimes national) media have some nice filler.
In the latest case of a prisoner tax schemed sniffed out, Troy Fears – who is enjoying a life’s stay in an Arizona prison for rape – spent 2005 to 2009 filing fake tax returns and obtained $119k in the process. He was using “fake W-2’s and apparently said he was filing other inmates’ taxes. He convinced other prisoners he was applying for grants on their behalf so he could get their Social Security numbers.” According to court papers, the IRS was missing this particular scam because “IRS routes [direct deposits] without making sure the name on the account matches the return.” The jig was up when a prison guard intercepted his mail, presumably figured out the tax returns were fakes, and called the authorities. Fears got four years tacked on to his sentence and the guard responsible for catching him can probably expect a “Deputy IRS Agent” certificate (signed by Doug Shulman, natch) in the mail any day now.
Jailed Rapist Gets $119K From Fake Tax Returns [KPHO via TaxProf]
Cleveland IRS Office Is Getting a Jumpstart on the Shutdown
Feels a little bit like a false start but apparently an IRS office in Cleveland has already said “fuck it” and sent employees home this morning.
WKYC reports, “They told us there was a government shutdown and there was nothing they could do and we should take our taxes to someplace where you pay,” said taxpayer Samantha Beynum. [WKYC]
IRS, DOJ Want a Peek at Some HSBC India Bank Accounts
Back in February, the IRS announced that it would be giving offshore bank account holders another chance to come clean on their tax-avoiding ways. Tax amnesty 1.0 went pretty well and last year, the IRS had a whale of time sticking it to UBS and a number of customers who were holding out. But in all honesty, we all know that picking off a bunch of blondes with above-average chocolatiering skills was some low-hanging fruit. Today the IRS, along with the DOJ, announced their next target of their sniffing-out-offshore-bank-account world tour. HSBC India! – come on down!
The United States is seeking an order from a federal court in San Francisco authorizing the Internal Revenue Service (IRS) to request information from HSBC Bank USA, N.A. about U.S. residents who may be using accounts at The Hong Kong and Shanghai Banking Corporation in India (HSBC India) to evade federal income taxes, the Justice Department announced today.
The government filed a petition with the court to allow the IRS to serve what is known as a “John Doe” summons on the bank. The IRS uses a John Doe summons to obtain information about possible tax fraud by people whose identities are unknown. If approved, the John Doe summons would direct HSBC USA to produce records identifying U.S. taxpayers with accounts at HSBC India, many of whom are believed by the government to have hidden their accounts from the IRS.
And if anyone is getting the idea that this is an HSBC/Hong Kong/India issue, Doug Shulman would like you to know that this is not personal, it’s simply the IRS doing the Treasury’s dirty work, “The IRS continues to focus its attention on international tax evasion,” the Commish said. “This summons request is focused on obtaining more information to help us determine if additional actions are needed. As I’ve said all along, our international efforts are not about just one country or one bank – it’s about our wider effort to ensure compliance with the nation’s tax laws.”
The Treasury isn’t going to fill itself now, is it?
[via WSJ]
A Government Shutdown Is Not an Acceptable Excuse for Blowing Off Your Tax Return
Doug Shulman wants you to put that notion right out of your mind:
Doug Shulman, the IRS commissioner, said that people who file electronically during a shutdown would likely not face any delays in having their returns – and potential refunds – processed. But taxpayers who file by paper, Shulman added, may see some delays. “We’ve got a 100,000 employees. Not all of them are going to be coming to work. But we’re going to have a complement here,” Shulman said. “The nuances of who is going to be doing what I’m not ready to get into. The most important thing for people to know is: We’re going to be accepting tax returns and people should file.”
So as Adrienne just mentioned, you can either ask the AICPA for help, call your tax advisor or simply curl up into a ball and shudder in the corner until the 18th passes.
IRS commissioner: You still have to file taxes during shutdown [The Hill]
IRS Commish Admits That a Government Shutdown During Tax Season Would Be Kinda Weird
The head of the IRS said Thursday that a government shutdown during tax season would be a challenge the agency has never confronted before — and one that would become more complicated as the April filing deadline draws closer. Doug Shulman, the IRS commissioner, also signaled at a House Ways and Means subcommittee hearing that his agency was discussing how to address a potential shutdown with the Obama administration, though he did not spell out any details of those talks. “We run a $13 billion financial services operation, so the idea of stopping it for a few days or a few weeks is strange,” Shulman said, adding that he was hopeful, based on ongoing negotiations, that a shutdown could be averted. [The Hill]
Wife of Man Who Received Tax Refund Without Filing Tax Return Under the Impression the IRS Was Letting This One Go
Typically if you receive a $6,000 tax refund check in the mail, it’s something you’ve been expecting.
Such was not the case for James King who had a check cut to him back in February but unfortunately it’s due to case of identity theft. Right now the IRS can’t make heads or tails of the situation and despite the mix-up/criminal activity, Mr King’s wife figured that this was opportunity:
“She was ready to spend it,” King said of his wife with a laugh. “She was ready to go cash it and spend it. She had a to-do list right from the get-go.”
This Wouldn’t Do Much for the Popularity of IRS Agents
Under a GOP-backed bill expected to sail through the House of Representatives, the Internal Revenue Service would be forced to police how Americans have paid for their abortions. To ensure that taxpayers complied with the law, IRS agents would have to investigate whether certain terminated pregnancies were the result of rape or incest. And one tax expert says that the measure could even lead to questions on tax forms: Have you had an abortion? Did you keep your receipt? [MoJo]
Tim Geithner: Cutting IRS Budget Hurts Taxpayers
FYI to any members of Congress who still think it’s a good idea:
Treasury Secretary Timothy Geithner on Wednesday said potential cuts to the Internal Revenue Service budget would damage the agency’s ability to collect revenues. “Any substantial cuts to the IRS budget will hurt revenue collection and service to taxpayers, resulting in unanswered phone calls and letters,” Geithner said in the text of remarks prepared for a House Appropriations subcommittee hearing.
Never mind the fact that taxpayers are getting a lot of bang for their buck:
“The customer service and enforcement programs at the IRS provide one of the best values in the federal government,” Geithner said.
What else do you need to know?
Geithner: Cuts To IRS Budget Would Hurt Revenue Collection [Dow Jones]
Three Ways to Get on the IRS’s Good Side This Tax Season
All this resentment of the IRS has got to stop. It’s counter-productive, cowardly and most of all, annoying. The gang at Boulder, Colorado-based Webroot understands that you shoo away more IRS flies with honey than with vinegar, so they’ve made a simple suggestion: “This tax season get on the IRS’s good side.”
How does one do that, you ask? Well, Webroot has given you three options to show some love:
1. Send a flower to Doug Shulman – Behind that rough exterior, The Commish is a softee. Sign up for this option and a flower will be added to the bouquet and your name included on a card that will accompany warm his bureaucratic heart. You do have the option of donating a flower anonymously if you’re still not sure Dougie is nothing but a taxborg that gets plugged in every evening.
2. Pro-IRS Stamps – Don’t you just love it when you get unique stamps in the mail? Imagine how good you would feel if the stamp had a tattoo heart with your name in the middle of it. I’ll bet the IRS would like it if you used one to mail in your tax return. Those “Forever” stamps are boring anyway.
3. Like the IRS on Facebook – Seriously, people. Is there a better way to show your appreciation? Besides, I’ve seen what some of you ‘Like’ on FB and quite honestly, it’s far more embarrassing than liking the 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.”
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.
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.
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.
