First of all, the IRS’s budget has been slashed yet again. However, the way they are proposing to spend this budget is a head scratcher. First of all, it is 2018. Fax machines are obsolete. However, I am required to have one, because I have to fax information to the IRS. Snail mail, is hardly ever used, however, I firmly believe that tax professionals keep the USPS in business, because we are always writing letter, certified, to prove that we sent them.
In the Ways and Means Committee Report, issued a few weeks ago, the IRS will be modernizing their systems by 2023. In theory, in five years, the agency will be kicking and screaming into the 21st century. However, it will be limited to only some information being allowed to be transferred to a portal, and then who knows who will get the info, or how you can prove that you sent it.
Another modernization, if you want to call it that, was when you had a client that was being audited, you could build a relationship with the auditor, and simply ask them why the return was being audited. You will no longer be able to do that. In fact, if the case goes to appeals, you can no longer ask for the auditor’s notes. You have to file a Freedom of Information Act (FOIA), to get the agent’s notes. The obvious, and most glaring problem with that is it could take up to 6 – 8 weeks to receive the information, which will give you a short time to prepare your case.
The Low Income Tax Program, while important, has been earmarked so much money. The problem is that most people don’t know it exists, and further, not very many people take advantage of it. Then the taxpayer service centers are set to be closed. So where does a person that needs help receive it?
The outside collection agencies are getting a lot of money thrown at them. I have said it before, and I will say it again, is it really a good idea to give these outside agencies confidential taxpayer information, much less subject a taxpayer, who have rights, to aggressive collections techniques, with little or no oversight?
Now the report focuses on customer service. I am sick and tired of calling the IRS, being on hold for two hours and getting the courtesy disconnect.
As professionals, we have to spend a lot of money on secure, and encrypted portals. Why can’t the IRS do the same? I am self-employed, and between the hours of 9 am and 5 pm, I am answering emails, phone calls, meeting with clients. It would be so much easier to take care of any representation issues early in the morning, when I have the time. I deal a lot with the Florida Department of Revenue (FDR), and they have a secure way to handle any issue with them, at any hour.
I am sick and tired of the IRS stating that they are going to update their systems, and nothing happens.
One more thing, that the Ways and Means Committee came up with is to limit John Doe Summons[1]. To remind you, John Doe Summonses were used against foreign bank accounts, particularly Swiss Bank Accounts, that were used to shelter income from the IRS. They were also used to get information about other offshore accounts, where US citizens or subjects[2], were hiding US Source income. Most recently, these summonses were used against Coinbase, the largest exchange that houses cryptocurrency. Traditionally, cryptocurrency is used to hide income from the taxing authority, and used to for illegal activities. When these summons were issued against Coinbase, Congress, amid pressure from their constituents, limited the scope of the summonses. I’m not saying that everyone involved in crypto is laundering money, but a majority aren’t reporting the income derived from the sales of the crypto.
Enforcement is at an all time low. I have been doing this for 24 years, and when the U.S. government isn’t obtaining the revenue they are supposed to, the result is that the IRS becomes fully funded, and gets out of control.
The point that I’m making is that Congress and the President have made the IRS impotent. Not even the Taxpayer Advocate Service (TAS) which was created to police the IRS, either doesn’t get back to you, or gives you a flimsy reason why they can’t help you.
Let me remind everyone what the Taxpayer Bill of Rights are:
The Right to Be Informed – GOOD LUCK
The Right to Quality Service _ MARGINAL SERVICE AT BEST
The Right to Pay No More than the Correct Amount of Tax – PROFESSIONALS ARE BLAMED FOR THE TAX GAP
The Right to Challenge the IRS’s Position and Be Heard – THAT HAS WORKED OUT WELL FOR ME
The Right to Appeal an IRS Decision in an Independent Forum – WHERE THE AUDITOR SHARES THEIR NOTES WITH THE APPEALS OFFICER AND YOU HAVE TO GO THROUGH A PROCESS TO GET THOSE NOTES
The Right to Finality – ON A GOOD DAY
The Right to Privacy – IF PRIVACY MEANS CONTACTING MY NEIGHBORS AND EXPLAINING WHAT YOUR ALLEGATIONS ARE, THEN I GUESS THAT IS RIGHT
The Right to Confidentiality – SEE ABOVE
The Right to Retain Representation – FOR WHICH I HAVE PERSONALLY HAD AN OVERZEALOUS AGENT GO OVER MY HEAD WHEN I WAS COMPLYING
The Right to a Fair and Just Tax System – THAT’S DEBATABLE
The TAS is supposed to keep the IRS in line when these bill of rights are breached, but frankly, they are no longer independent, and if you ask for help, there are at least a 1000 reasons why they can’t.
IRS, TAS, Congress, just do your job.
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[1] A John Doe Summons is an IRS summons authorized by Internal Revenue Code Section 7609(f). Unlike other IRS summonses it does not list the name of the taxpayer under investigation because the taxpayer is unknown to the IRS. (Bragger Law Group)
[2] A person that has a green card, or is required to file form 1040.
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Tags: Digital Currency
