Paul L. Caron
Dean


Wednesday, February 25, 2015

The IRS Scandal, Day 657

IRS Logo 2Forbes, 12 IRS Embarrassments, 6 Questions Each Taxpayer Should Ask, by Robert W. Wood:

[Y]ou sign your tax return under penalties of perjury. That means your money—and conceivably your freedom—are on the line. It is one reason why the integrity of the IRS is so terribly important, and why the lingering IRS scandal should be resolved. Mr. Meckler in the American Spectator—understandably, but I still hope incorrectly—identifies these as what he calls the real dirty dozen. ...

Mr. Meckler says this dozen adds up to an agency failing to merit taxpayer trust. The fact that there are still unanswered questions does not mean they should not be addressed. Indeed, even if Mr. Meckler is wrong about most of this, to me, it is hardly enough to say there is no smidgen of corruption, or that nothing has been proven. For both sides of the political spectrum, the obstructionism by the administration and at the IRS has been truly disheartening. It suggests a cancer that may be hard to cut out. It reflects problems not in the rank and file of the IRS, but surely higher up. Amid all the noise, Americans should ask simpler questions, especially at this time of year.

  1. Why is the tax law so horribly complex? It isn’t the IRS’s fault. Congress passes tax laws so fundamental reform–long overdue–must start there. Even if it isn’t fair, a flat tax would be much fairer than what we have.
  2. Can I feel secure that I will be dealt with fairly by the IRS? Mostly. The tax system is full of special rules, and no one can master them all. Thus, one taxpayer may be treated very differently from another who is seemingly in the same position. That isn’t fair. Don’t confuse this with fundamental procedural fairness and non-discrimination. On the whole, the IRS does an incredible job administering our horribly unwieldy tax laws. If you are not being dealt with fairly and respectfully, complain, ask for a manager or go to the IRS Taxpayer Advocate’s Office. Speaking of the latter, wouldn’t it be incredible if Nina Olson were IRS Commissioner?
  3. Doesn’t the IRS police its employees? Yes, and it does a better job than recent stories suggest. Some are even fired, one reason much at the top is so hard to comprehend. Unreasonable or abusive requests may happen, and you need to speak up.
  4. Why does it seem that there’s always someone getting away with something in the tax world? Because there is. Wealthy people may manipulate the rules and pay less than you think they should. At the other end of the spectrum, scams may hand out earned income tax credits and bogus refunds. The fact that someone is playing the game better than you are can grate but it doesn’t mean the whole system is rigged. Reform is needed.
  5. Can I feel secure that my private taxpayer information will remain private? This may be the biggest challenge today not only for the IRS but for many in government and non-government alike. With technology and e-filing, it is a huge danger. Leaks should be dealt with severely.
  6. Why is staying off the IRS radar so important? Because much can go wrong in our terribly complex system. Avoid IRS audit triggers, and pay (don’t dispute) small bills. Even a joking suggestion of “we’ll audit you” is so sensitive. Be careful out there.

https://taxprof.typepad.com/taxprof_blog/2015/02/the-irs-scandal-12.html

IRS News, IRS Scandal | Permalink

Comments

Mr. Wood has returned to his generally thoughtful writing style and composition. I agree with points 4, 5, and 6. As for point 1, I agree right up to the last sentence. But clearly, a flat tax would not be fairer than the present system–it would be very much less fair to lower-income and middle-class taxpayers–and it would be no less complex. The flat tax concepts currently under discussion would do nothing at all to eliminate disputes concerning employee/independent contractor classification, responsible officer liability, collection issues, bankruptcy issues, corporate shelters, transfer pricing questions, substantiation issues, or the cause of the Great IRS Scandal of 2013–recognition of exempt organizations.

With regard to point 2, it essentially laments a lack of uniformity in application of the tax law. Uniformity is a very important aspect of tax fairness, and one of the principal quests of the IRS mission. It is also worthy to note, however, that the IRS pursuit of uniformity of taxpayer treatment is what underlay the Cincinnati office’s ill-conceived use of BOLO lists to classify and treat exempt orgs in the Great IRS Scandal of 2013.

Point 3, concerning IRS discipline, is well taken, but inadequate. The average IRS worker, since about 1998, has been cowed by Draconian rules governing worker misconduct. In particular, the so-called “10 Deadly Sins” have made enforcement personnel timid, which has resulted in underenforcement and growth of the tax gap. Balance must be restored in this area, with particular attention to the IRS executives, many of whom hold their positions simply because they have contrived to make few decisions and therefore, few mistakes.

Posted by: Publius Novus | Feb 25, 2015 6:43:32 AM

I'm afraid that this huge scandal will never be reported by the US MSM. Until that happens Obama's minions will have the protection they need to stonewall. I am old enough to remember Watergate and the media of that era. At Nixon's press conferences reporters literally screamed out questions directed at Nixon. The press did not give up until Nixon was gone. What a difference a generation makes. This MSM is mild, meek, and completely in the tank. Are they coming out of J schools completely castrated? Seems like 'reporters' had a lot of gumption when W. was president. I was led to believe that the "outing of Valarie Plame" was the end of Western Civilization. What happens to the press when a Dem gets into the White House?

Posted by: VoteOutIncumbents | Feb 25, 2015 9:58:16 AM

Mr. VOI, if you remember Watergate, then you also remember that: 1) Pres. Nixon was personally involved; 2) Pres. Nixon's chief-of-staff, WH counsel, and domestic advisors were personally involved; and 3) some of the president's and president's advisors were proven to have broken criminal laws. In the present, there is no proof whatsoever that: 1) Pres. Obama is involved; 2) any of his WH advisors are involved; or 3) that any criminal laws have been broken. Those seem to me to be three very important differences. And BTW, the MSM wasn't wild about covering Watergate. Only the WaPo gave it any significant coverage in the early and even middle stages. NYT and WSJ blew it off, as did ABC, CBS, and NBC.

Posted by: Publius Novus | Feb 25, 2015 11:02:50 AM

Mr Publius: We do know there have been felonies committed. IRS people leaking information to leftwing blogs about certain Republicans. We also know that emails have disappeared and hard drives have 'crashed'. If the press were as interested in finding out how all of this happened maybe we would know more about possible criminality in the White House. My point is that it seems to be different when the possible criminals are Democrats rather than Republicans. I contend there's a huge double standard on the part of the coastal media elites.

Posted by: VoteOutIncumbents | Feb 26, 2015 8:14:16 AM