Paul L. Caron
Dean





Wednesday, April 13, 2011

ABC News: Bullied by the IRS

https://taxprof.typepad.com/taxprof_blog/2011/04/abc-news-.html

Tax | Permalink

TrackBack URL for this entry:

https://www.typepad.com/services/trackback/6a00d8341c4eab53ef014e87b5d7e9970d

Listed below are links to weblogs that reference ABC News: Bullied by the IRS:

Comments

Hitler really missed out on the easiest way to confiscate citizens property. The IRS doesn't need to use guns, nor concentration camps.NO they just levy your wages and bank accounts with the blessing of our government. If Hitler were alive today, he would have been proud of the IRS and maybe added his SS troops to their staff.

Posted by: J Smith | Apr 14, 2011 3:36:39 PM

How about we make a policy that civil servants live by their own rules? That they be treated as they treat citizens. Put some teeth into the Golden Rule.

In this case, they preemptively seized this family's money, interrogated her husband, and harassed her at home. Now that there's a possibility of an error, they'll investigate and get back to her.

Fine. Turn that behavior around. At first sign that the IRS has made an error, sack the agent involved. If you can't determine who's actually responsible, sack everyone who could be. (This is IRS policy for the treatment of taxpayers, remember).

And don't do all this by exchange of letters: Show up at their offices and drag them out into the street. If they can prove there was no error, they get their jobs back, as soon as the paperwork is processed.

And if they think this is unnecessarily harsh, they can start being more fair and responsive to taxpayers.

Posted by: ChurchSox | Apr 14, 2011 7:31:55 AM

Well, at least ABC was unbiased.

The IRS cannot levy your property without first giving you a notice of intent to levy. The gives you the right to meet with an Appeals Officer. If the Appeals Officer sustains the levy, you have the right to appeal the decision to the U.S. Tax Court (a Federal Judicial court, unlike the IRS which is an Executive agency).

If the IRS files a notice of Federal tax lien (NFTL) on your property they must give you notice of the filing of the NFTL. This creates the same rights as above (Appeals Officer and Tax Court).

It is hard to feel sorry for people who do not pursue their rights.

It is also hard to feel sorry for the rich paying a little more (just the top marginal rate increases, not every marginal rate) and the government spending a little less albeit not at the expense of the poor. Some social programs must be funded (e.g., social security) or people will not have enough money to live.

I am all for cutting unnecessary spending, but when is pork going to disappear? If you believe that then I have a bridge to sell you. How many new military jets, tanks, and guns do we need? A lot less if we left places we did not belong in the first place (Iraq, Libya). I bet the USA would survive if $1T (T for trillion) or more was cut from the Defense budget.

Also, why pay contractors twice or more what you could pay a civilian employee to do the same job? So much government work/jobs was outsourced in the name of "reducing government." If you do not count government contractors in the number of Federal employees then you are not playing with a full deck.

Last point. Withing a 1-2 week basis, Obama said government employees (middle class or working class) had to tighten their belts and suck up a 2 year pay freeze and then he signs the Bush tax cuts for the rich. So the rich get rich and the middle class and poor get....well you know what.

Thus it is so, and ever shall it be.

"Senator: Oh, fellow Members of the Roman Senate, hear me! Shall we continue to build palace after palace for the rich? Or shall we aspire to a more noble purpose, and build decent housing for the poor? How does the Senate vote?

Senators: F*ck the poor!

Senator: Good."

Posted by: tax guy | Apr 13, 2011 5:52:29 PM

"Reality bites" - I'll assume that you're not one of the evil 1%. As it happens, I am. I'm 46, and have spent 30 years getting to this point. So let me explain this to you, you greedy little parasite:

Here's the share of income by quintile for households in the US.

Bottom 20% Households: 3.4%
Next 20%: 8.6
Middle 20%: 14.5
Next 20%: 22.9
Top 20%: 50.5%

For interest: top 5% earns 22%

Keep in mind that richer households are larger — an average of 3.1 people in the top fifth, compared with 2.5 people in the middle fifth and 1.7 in the bottom fifth. So the smaller household almost by definition will make less - because fewer people are working. Can't have two incomes if there are only 1.7 people....

Now let's look at percentage of taxes paid:
Bottom 20%: 0.8 (all federal) and -2.8 (income - they got $ back)
Next 20%: 4.1 and -0.8 (they also got $ back)
Middle 20%: 9.1 and 4.4
Next 20%: 16.5 and 12.9
Top 20%: 69.3 and 86.3%

This info is from the Census Bureau and the CBO. I doubt you have the ability, because anyone who blames successful people for their own problems probably doesn't have the sense to pour piss out of their own boots, but you are welcome to look it up.

No matter how you slice it, the US tax code is steeply progressive, taxes any dollar that a two-income household earns more heavily than a one-income household, penalizes extra effort, and gives back far more to low income households than it takes.

Posted by: orthodoc | Apr 13, 2011 5:23:22 PM

The "Rich" can pick up and move overseas where taxes are less - then who's gonna run the factories? Unions? All they're good for is shaking-down their membership and turning the spoils over to Democrats who spend it on buying votes.

Posted by: DirtCrashr | Apr 13, 2011 4:52:06 PM

I'm going through the same thing. I'm a SAHM. We have one paycheck - husband is a W-2 employee, regular Joe.

We have been left alone for 20 years, but we've been badgered TWICE since Obama took office.

We DID have success through our taxpayer advocate. Thankfully, we did not pay what was requested but kept fighting, and it has been settled just fine. I had withdrawn ROTH contributions, which are perfectly legitimate. It's only when you touch earnings that you must pay extra fees and taxes. About 1/2 of the IRS employees that I talked to didn't understand the code at all.

Also, somehow the IRS was using two different addresses during our issue, so the stuff I faxed and mailed to one address that was on the form never was acknowledged. It was a mess.

Now, they're at me again for the first-time homebuyer credit, which I received in the form of a loan. I have plenty of proof that I received it legally, but they want all kinds of fees and a court date - the burden of proof is on us. I wish they'd asked for proof FIRST, rather than assuming I'm lying and charging us an extra $2 grand penalty on a $7,500 loan, which we're paying back as agreed.

I have a feeling this abuse is going to continue for a long time, while the government's broke and the Democrats run things. I have no confidence in the kind of people the Democrats hire. I've worked in Washington -- I KNOW what they're like. It really, really gets you down on a personal level, though. It's frightening, especially when you have young children at home.

Posted by: Jane | Apr 13, 2011 4:40:31 PM

If you over-tax the wealthiest 1%, they will stop investing completely. I'd move to Belize before I'd let the IRS confiscate my earnings. I've already taken myself out of the work force and get by on my military retirement and disability. I went John Galt. I'm much happier being low income (and I don't take governement handouts nor did I ever file for unemployment).

Posted by: Robin | Apr 13, 2011 4:25:46 PM

This happened to me, but the amount was $35,000. After two years of hor$eSh#t, it took Senator John Warner and his ombudsman two weeks to fix it.
Astonishingly, the IRS doesn't have a set of balanced books like a normal business or organization. They have no way of determining when they under-collect or over-collect on a enterprise basis. If your personal record has an error, they can't reconcile it.

Posted by: Bat Chain Puller | Apr 13, 2011 4:15:43 PM

reality bites: "Lets see the IRS actually try going after people who have all the money--the top 1%."

In the US overall, the top 1% pay 38% of all the income tax collected. The top 5% pay 58%.

Contrary to popular opinion, the "rich" don't stuff their mattresses with $100 bills, or light their cigars with them.

The problem is not that the government takes in too little; the problem is that it spends too much.

Posted by: ZZMike | Apr 13, 2011 4:11:53 PM

It's too bad the IRS won't go after the tens of thousand deadbeat government employees who are delinquent on their taxes.

Posted by: Claude Hopper | Apr 13, 2011 3:58:38 PM

@reality bites, that'll never happen. The top 1% have already retained their own tax attorneys, and they can afford the fight. It's the middle class, with more taxable money than the poor, but not enough to afford to fight like the rich, that the IRS wants to go after. The low-hanging fruit, if you will.

Posted by: gus3 | Apr 13, 2011 3:55:35 PM

Just imagine the stink if some private corporation treated a customer this way. It might well lead to a class action suit against that corporation.

The problem is that there is no incentive for IRS employees to treat citizens well. Neither they nor the IRS will suffer in the slightest if and when they fail to do so. And employees run a risk if they show leniency.

I actually had a similar problem with the State of New Jersey. It badgered me for a payment I had made, which was fortunately for a small amount, so I paid it again. They continued to pester and even had the IRS take it out of a federal refund. And it was impossible for me to contact a human being to straighten this out, because the tax people did not accept out of state calls for months on end. (I kept getting the message, we are very busy, call back some other day.) Eventually we found out that because my wife's name came first on our checks, the checks were deposited in a (non-existent) account under her name, while the tax returns were under my name. I would not be surprised if there was some similar silliness behind this woman's problem. Or perhaps the ssn on the check was garbled by the time it was read and the money went to someone else's account. Usually a copy of both sides of the original check is sufficient to allow it to be traced, and that should resolve the issue.


Posted by: daniel | Apr 13, 2011 3:53:57 PM

For someone with "reality" in his name, you're not familiar with it. The reality is, the middle class has more wealth than the wealthiest 1%. The IRS knows that, so they slam middle-class taxpayers into prison for the encouragement of the rest of us.

Stop trying to organize society around envy and greed, please.

Posted by: Rob Crawford | Apr 13, 2011 3:51:01 PM

If you taxed everyone who makes over 250k 100% of all their earnings over that $250k, you'd have enough money to run the government for 4 months ($1.4 trillion). Add in all those "evil" profits of the Fortune 500 ($400 billion) and you'd get a little over 5 months total. "The rich" aren't going to get us out of this mess unless we can provide enough incentive for them to expand the economy (that's the way deficit reduction has always--or almost always, when Congress can stop spending the additional revenues--occurred).

Posted by: JWnTX | Apr 13, 2011 3:44:09 PM

How about you take the bong out of your hand when you're typing, reality. Typing with two hands is like thinking with both lobes -- you'll be amazed what it can do for you.

Posted by: Douglas Fletcher | Apr 13, 2011 3:42:21 PM

It's easy to pick on middle class taxpayers. Lets see the IRS actually try going after people who have all the money--the top 1%.

Posted by: reality bites | Apr 13, 2011 6:21:58 AM