U.S. Treasury Secretary Timothy Geithner told the Senate Finance Committee Feb. 15 that Congress should “revisit” long-standing rules that give businesses a choice of paying taxes as a corporation or through a structure such as a partnership through which they can report business income on individual tax returns. The recommendation, which Geithner repeated in a meeting with reporters this week at Bloomberg News in Washington, would affect income earned by the nation’s largest law firms, investment partnerships and so-called S corporations. It would more than double, to about $3 trillion, the amount of business income potentially affected by tax-law changes. [Bloomberg]
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After Coasting Through Tax Season, Some IRS Revenue Officers May Have to Start Doing Actual Work
While we’re typically not ones to speculate on the difficulty of any particular job (e.g. CEO of a Big 4 firm) the Treasury Inspector General for Tax Administration (“TIGTA”) probably has the easiest job on Earth.
As far as we can tell, the TIGTA is responsible for criticizing the IRS on, well, pretty much everything that the Service does wrong and then the IRS agrees that they suck and promises to do better.
And if you’re going by the TIGTA website we’re more or less correct:
“TIGTA promotes the economy, efficiency, and effectiveness in the administration of the internal revenue laws. It is also committed to the prevention and detection of fraud, waste, and abuse within the IRS and related entities.”
We’re assuming that Doug Shulman probably agree with our assessment but that guy doesn’t even like pizza, so who cares what he thinks?
Anyhoo, the latest Monday Morning QBing from the TIGTA is that some of the Service’s senior revenue officers are basically sitting around with nothing to do. Web CPA reports:
Senior revenue officers at the Internal Revenue Service who are supposed to handle more complicated tax cases oftentimes don’t receive any work assignments, according to a new government report…
The relative lack of work for the senior revenue officers to do occurred because there is no systemic means for IRS managers to identify the most complex cases, and the criteria for identifying complex cases are subjective and inconsistently interpreted.
So you’re a senior revenue officer with 5-6 years (?) on the job. You’ve got this gig pretty much figured out. Not only do you know the ropes, you make the fucking ropes. Your manager has suits from DC so far up their ass about collecting every dime available that they can’t see straight, so they just want you busy do anything.
You, being a reasonably lazy (and realistic) person, aren’t going to kill yourself. If you’ve got the choice of picking up a 1040 that’s hundreds of pages long versus a 1040EZ that has fewer pages that a Tony Alamo pamphlet, you’re going to pick up the 1040EZ.
Well now J. Russell George is slapping those managers around with a report deeming this unacceptable which may mean that your slacking days are over:
“I am troubled that IRS managers are not providing employees with work assignments that they are ready and able to do at a time when it is incumbent on the IRS to be as efficient and effective as possible,” said TIGTA Inspector General J. Russell George in a statement.
JRG is recommending that the IRS improve it’s methods of identifying more complex cases (that the IRS naturally agreed with). We think a tax return thickness analysis is a decent place to start.
The Olds Don’t Get the Internet and All Tax Collectors Are Evil, Say Younger, More Paranoid Republicans That Oppose Online Sales Tax
The Marketplace Fairness Act is back in the news again, as The Hill reports that […]
Don’t Worry, the IRS isn’t Getting Too Soft
In 2004, Congress wanted to lay the smackdown on individuals and entities using tax shelters. In order to scare the beejesus out those thinking about the practice, Congress enacted penalties of $100,000 for individuals and $200,000 for entities per non-disclosure to the IRS.
Problem is, Congress, who often pulls out the jump to conclusions mat, didn’t give the IRS any discretion on enforcement so Mom & Pop (who often don’t have kids) shops were getting hammered with fines they couldn’t pay:
In one case cited by the Small Business Council of America, a husband and wife followed the advice of a consultant and set up a limited liability company and Roth individual retirement accounts. When the IRS challenged the way the transactions were done and found income tax deficiencies of $6,812, it was required to impose a penalty of $1.2 million.
The IRS figured that maybe, just maybe, this wasn’t really working the way it was intended and has suspended the collection of fines in order to make the penalties more proportional. Not to worry though, the IRS hasn’t decided whether or not apply the changes retroactively and are only suspending the fines until September 30. They wouldn’t want to tarnish their image as faceless cold-blooded bureaucrats.
IRS Halts Fine Linked To Tax Shelters [WSJ]