Chodorow: Trump, Musk, Senate Republicans, And Your Taxes

Slate:  Why Withholding Your Taxes in Protest Could Actually Help Trump and Musk, by Adam Chodorow (Arizona State; Google Scholar):

It’s tax season, and if you’re upset about how things are going in government right now, you might be tempted to protest by withholding your taxes. After all, conservatives had their Tea Party moment. Why shouldn’t those opposed to the efforts of President Donald Trump and Elon Musk to dismantle the government, alienate our allies, and degrade America’s standing in the world have their own? ...

The question is: When are protests warranted? We have a democratic government, where the majority gets to set policy and decide what to spend money on and how much. When does disagreement with government policy rise to the level that it justifies a refusal to pay taxes? We could all identify something that might inspire us to protest, whether from the left or the right: war, abortion, guns, the death penalty, NPR. The list goes on. The problem is: We are either committed to our democratic process or we are not. It would be ironic for those outraged about the attack on the rule of law to protest by … ignoring the law. ...

Civil protest can be a powerful tool, bringing attention to injustice and bad government policy. But no matter how just the cause, it does not permit folks to break the law with impunity. Failure to file and pay taxes can lead to two different penalties and interest charges that can outstrip the amount owed if enough time passes. It can even lead to criminal charges and prison. Just ask Hunter Biden. ...

No one enjoys paying taxes under the best of circumstances. And refusing to pay to advance one’s cause can make it all seem noble. But it is not that simple. Nothing ever is. So, feel free to fantasize about standing up to the man and refusing to pay your taxes. You can even imagine yourself wearing a tricorne hat. However, to paraphrase Michelle Obama, if you’re worried or upset about what’s going on today, do something … else.

Slate:  Republicans Are Trying to Use Accounting Magic to Conceal the Cost of Tax Cuts, by Adam Chodorow (Arizona State; Google Scholar):

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From Bob Jones To Columbia: Using Tax Law To Eliminate Discriminatory DEI Practices In Education

Wall Street Journal Op-Ed:  From Bob Jones to Columbia University and DEI, by James Taranto:

It seems the administrators of Columbia University are welcoming Donald Trump as their liberator from the tyranny of wokeness. “The school believed there was considerable overlap between needed campus changes and Trump’s demands,” the Journal noted Friday in reporting Columbia’s surrender to the government’s terms.

That leaves 59 other federally funded colleges and universities for the Education Department (or whatever replaces it) to investigate for violations of Jewish students’ civil rights under Title VI of the 1964 Civil Rights Act. In an executive order on his second day in office, Mr. Trump also directed agencies to target discriminatory “diversity, equity and inclusion” practices at federally funded universities. He has been bolder in defense of college students’ civil rights than any president since John F. Kennedy, whose desegregation efforts involved federalizing the National Guard and dispatching the Army to the University of Mississippi in 1962 and U.S. marshals to the University of Alabama in 1963.

Mr. Trump can cement his civil-rights legacy by enlisting the most fearsome agency of the U.S. government: the Internal Revenue Service. In the process, he can help the Supreme Court clean up a messy bit of jurisprudence from the Burger era: Bob Jones University v. U.S. (1983).

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WSJ: IRS Retreats From Some Audits As Agency Slashes Workforce

Wall Street Journal, IRS Retreats From Some Audits as Agency Slashes Workforce:

The Trump administration’s rapid shrinking of the Internal Revenue Service is ending some large audits and putting others in limbo. That is the early fallout of a retreat from stepped-up tax enforcement that could dent compliance and cost the government tens of billions of dollars in revenue.

Treasury Secretary Scott Bessent hasn’t detailed his plans for the IRS, its employees and operations. But a new direction is clear. Tough talk about pursuing tax dodging by corporations and high-income households is gone, and the administration is leaning more on technology for taxpayer service and enforcement. That would reverse the recent IRS push to put more people on telephone lines, in walk-in centers and on the front lines of audits and collections.

The IRS expansion started by former President Joe Biden screeched to a halt after President Trump took office. The new administration fired 7% of IRS employees, mostly from the enforcement staff, and froze hiring. The Republican Congress moved to rescind almost all the enforcement spending Democrats approved in 2022. Former IRS officials expect thousands of further job cuts soon, though the Treasury Department hasn’t announced a specific target.

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IRS Nears Deal To Give ICE Addresses Of Immigrants Targeted For Deportation

New York Times, I.R.S. Prepares to Help Find Immigrants Targeted for Deportation:

The tax agency is nearing an agreement to verify whether ICE officials have the right address for people they are trying to deport.

The Internal Revenue Service is preparing to help homeland security officials locate immigrants they are trying to deport, according to three officials familiar with the matter, in a shift toward using protected taxpayer information to help President Trump’s mass deportation push.

Under a draft of an agreement between the I.R.S. and the Immigration and Customs Enforcement, the tax agency would verify whether immigration officials had the right home address for people who have been ordered to leave the United States, according to a copy of the document viewed by The New York Times.

Wall Street Journal, IRS Nears Deal to Share Data for Immigration Enforcement:

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IRS Braces For 10 Percent Less Tax Revenue ($500 Billion) Due To DOGE Staff And Budget Cuts

Washington Post, Tax Revenue Could Drop by 10 Percent Amid Turmoil at IRS:

Staff cuts and disruptions related to the U.S. DOGE Service have officials bracing for a sharp loss of revenue.

Senior tax officials are bracing for a sharp drop in revenue collected this spring, as an increasing number of individuals and businesses spurn filing their taxes or attempt to skip paying balances owed to the Internal Revenue Service, according to three people with knowledge of tax projections.

Treasury Department and IRS officials are predicting a decrease of more than 10 percent in tax receipts by the April 15 deadline compared with 2024, said the people, who spoke on the condition of anonymity to share nonpublic data. That would amount to more than $500 billion in lost federal revenue; the IRS collected $5.1 trillion last year. For context, the U.S. government spent $825 billion on the Defense Department in fiscal 2024.

“The idea of doing that in one year, it’s hard to grapple with how meaningful of a shift that represents,” said Natasha Sarin, president of the Yale Budget Lab and a senior Biden administration tax official.

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Trump DEI Mandate And Staff Cuts Threaten IRS Effort To End Racial Bias

Bloomberg, IRS Effort to End Racial Bias Threatened by Trump DEI Mandate:

Diane Lim hadn’t even finished putting together her team at the Treasury Department’s Equity Hub before she got the notice from the Trump administration forcing her group to go on administrative leave within days of the January inauguration.

The Treasury Equity Hub is one casualty of President Donald Trump’s executive order to end federal diversity, equity, and inclusion programs, and eliminating it means there’s one less group of people working to end racial bias in audits—a problem researchers uncovered in 2023 that alarmed congressional Democrats. Trump’s sweeping executive order likely stalled efforts to fix that bias, which might perpetuate an unequal tax system and erode taxpayers’ trust, tax professionals said.

And now the goal to cut the IRS workforce in half complicates the racial bias work further.

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NY Times: Trump's War On The IRS And 19 Tax Issues Facing Congress

New York Times, Stalled Audits and a Skeleton Staff: Inside Trump’s War on the I.R.S.:

President Trump is planning to gut the work force while trying to turn the I.R.S. into a more political agency. ...

This article is based on interviews with more than a dozen current and former I.R.S. officials, aides on Capitol Hill and others in Washington who closely follow the tax agency. They described deep uncertainty as the I.R.S. cycled through three leaders in a matter of weeks and Mr. Trump’s team moved to rapidly remake one of the government’s most fundamental agencies.

New York Times, 19 Ways Congressional Tax Action (or Inaction) Could Hit Your Wallet:

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ProPublica: How DOGE’s IRS Cuts Threaten To Cost More Than They Will Save

ProPublica, How DOGE’s Cuts to the IRS Threaten to Cost More Than DOGE Will Ever Save:

ProPublica found that the latest IRS firings swept up highly skilled and experienced probationary workers who had recently joined the government or had moved to a new position from a different agency.

In late February, the Trump administration began firing more than 6,000 IRS employees. The agency has been hit especially hard, current and former employees said, because it spent 2023 preparing to hire thousands of new enforcement and customer service personnel and had only started hiring and training those workers at any scale in 2024, meaning many of those new employees were still in their probationary period. Nershi was hired as part of this wave, in the spring of last year. The boost came after Congress had underfunded the agency for much of the past decade, which led to chronic staffing shortages, dismal customer service and plummeting audit rates, especially for taxpayers who earned $500,000 or more a year.

The administration doesn’t appear to want to stop there. It is drafting plans to cut its entire workforce in half, according to reports.

Unlike with other federal agencies, cutting the IRS means the government collects less money and finds fewer tax abuses.

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NY Times: Trump Administration Pushes To Slash IRS Workforce By 50%

New York Times, Trump Administration Pushes to Slash I.R.S. Work Force in Half:

The Internal Revenue Service is preparing to shed as much as 50 percent of its staff, according to four people familiar with the matter, a significant cut that could jeopardize the agency’s ability to complete its basic mission of collecting taxes.

The I.R.S. started the Trump administration with roughly 100,000 employees. It has already laid off more than 7,000 people who had recently joined the agency and had fewer job protections, and thousands more have taken Elon Musk’s offer to resign. Those cuts, as well as normal attrition, are expected to count toward the Trump administration’s goal of halving the number of people who work at the I.R.S., two of the people said. ...

Losing half of its employees would severely strap the I.R.S., which has struggled for years with hiring and retaining a work force that can process millions of tax returns every year and conduct complex audits. Americans may have to wait longer to receive refunds or speak with I.R.S. employees in future filing seasons, while corporations and rich Americans may face less scrutiny from the thinly staffed tax agency.

Bloomberg, Trump Administration Aims to Halve IRS Workforce By End of Year

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DOGE Presses To Check Federal Benefits Payments Against IRS Tax Records

Washington Post, DOGE Presses to Check Federal Benefits Payments Against IRS Tax Records:

Officials with Elon Musk’s group say they want to search for fraud. Privacy law bars the IRS from disclosing tax information to other parts of the government.

Officials from Elon Musk’s U.S. DOGE Service have expressed interest in using personal tax records to check federal benefits payments for fraud, which would mobilize the IRS to drive the Trump administration’s campaign to cut government spending, according to three people familiar with the situation and records obtained by The Washington Post.

Gavin Kliger and Sam Corcos, DOGE representatives embedded at the tax agency, on Friday asked IRS lawyers to assist in creating an “omnibus” agreement with other federal agencies that would allow a broad swath of federal officials to cross-reference benefits rolls with taxpayer data, the people said, speaking on the condition of anonymity to describe private conversations.

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NY Times Op-Ed By 7 IRS Commissioners: Firing 6,700 IRS Workers In The Middle Of Tax Season Is A Huge Mistake

New York Times Op-Ed:  Trump Just Fired 6,700 I.R.S. Workers in the Middle of Tax Season. That’s a Huge Mistake., by IRS Commissioners Lawrence Gibbs (1986-1989), Fred T. Goldberg Jr. (1989-1992), Charles Rossotti (1997-2002), Mark Everson (2003=2007), John Koskinen (2013-17), Charles Rettig (2018-2022) & Daniel Werfel (2032-2025):

If you were to ask the top chief executives in the world to name the best strategy to attack waste in their organizations and balance the books, there is one answer you would be very, very unlikely to hear: Take an ax to accounts receivable, the part of an organization responsible for collecting revenue.

Yet the private sector leaders advising President Trump on ways to increase government efficiency are deploying this exact approach by targeting the Internal Revenue Service, which collects virtually all the receipts of the U.S. government — our nation’s accounts receivable division. Last week, the Trump administration started laying off about 6,700 I.R.S. employees, many if not most of whom are directly involved in collecting unpaid taxes.

Every year, the government receives much less in taxes than it is owed. Closing that gap, which stands at roughly $700 billion annually, would almost certainly require maintaining the I.R.S.’s collection capacity. Depleting it is tantamount to a chief executive saying something like: “We sold a lot of goods and services this year, but let’s limit our ability to collect what we’re owed.”

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NY Times: IRS To Lay Off Thousands Of Employees

New York Times, I.R.S. Expected to Lay Off Thousands:

The Internal Revenue Service is preparing to lay off thousands of employees as soon as next week, according to three people familiar with the matter, as the Trump administration pushes to dramatically shrink the size of the federal work force.

The Office of Personnel Management, the federal government’s human resources department, ordered agencies across the government this week to terminate probationary employees, who are relatively new to their positions and do not enjoy as much job protection. It was unclear on Friday exactly how many I.R.S. employees would be affected by the order. ...

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Tax Bar Steps Up To Help 200 Law Students And Graduates With Rescinded Job Offers From The IRS And DOJ Tax Division Due To Trump Hiring Freeze

Following up on my previous posts:

• IRS Chief Counsel Rescinds Job Offers To 3Ls Accepted Into Honors Program
• Department Of Justice Rescinds Job Offers To 3Ls Accepted Into Honors Program
• Trump's Hiring Freeze Leaves Thousands Of Law Students Out In The Cold

Caroline Ciraolo, former Acting Assistant Attorney General of the U.S. Department of Justice Tax Division and tax partner in the Washington, D.C. office of the Kostelanetz law firm, is organizing help for individuals whose employment offers were rescinded by the IRS or DOJ Tax Division:

We have read LinkedIn posts encouraging those who lost their positions and sharing employment opportunities. The government's decision to rescind the offers left these folks not only without a job, but in some cases, in a new city without connections, having relocated for the position offered.

This unprecedented turn of events presents an opportunity for the tax bar to step up and lean in. A group of tax practitioners convened for a call this week to discuss pending efforts and options. During the call, we shared information regarding the law students and attorneys whose federal employment offers from the IRS and DOJ Tax were rescinded. We understand that there is a pool of approximately 200 candidates, including: law students who accepted summer internships; law and LLM students who accepted permanent positions through the Honors Program; and laterals attorneys with one or more years legal experience. We also discussed our concerns regarding forced resignations, terminations, and potential terminations of probationary and career IRS and DOJ Tax attorneys. Many of us are meeting with those individuals to discuss career opportunities, share professional contacts and networking opportunities, and offer encouragement. We applaud these continued efforts and know that the time spent is greatly appreciated!

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More Rich Taxpayers Learn Their Data Was Stolen in Huge IRS Leak

Bloomberg Law, More Rich Taxpayers Learn Their Data Was Stolen in Huge IRS Leak:

The IRS sent another wave of letters to taxpayers whose data was stolen amid a historic breach by an agency contractor several years ago.

Charles Littlejohn stole the tax returns of prominent billionaires and President Donald Trump between 2018 and 2020 and then leaked them to news organizations, which published a series of stories with the information. The notices are the first time those not named in the news articles realized they were part of the breach.

The tax return information for almost 100,000 individuals and businesses was included in the data Littlejohn stole, according to an email from Department of Justice attorney Jonathan Jacobson, which was released Jan. 8 as part of Littlejohn’s appeal of his sentence.

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IRS Chief Counsel Rescinds Job Offers To 3Ls Accepted Into Honors Program

Tax Notes, Federal Hiring Freeze Quickly Hits Prospective IRS Attorneys:

Graduate students who accepted offers to work at the IRS Office of Chief Counsel have begun seeing those offers rescinded following the freeze on federal hiring, according to professors.

President Trump on January 20 signed an executive order halting all federal hiring and specifying that the IRS shouldn’t begin hiring again until Treasury and the Office of Management and Budget determine that “it is in the national interest to lift the freeze.”

The order has already hit law school students who were expecting to join the agency, several law professors told Tax Notes. ...

Ted Afield of Georgia State University College of Law said that all his students with existing offers to work at the Office of Chief Counsel saw them rescinded following Trump’s inauguration, leaving them with little time to find new positions. ...

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First Bitcoin Investor To Get Prison Time For Crypto-Related Tax Evasion

Law360, Bitcoin Investor Gets 2 Years For Tax Fraud In Landmark Case:

An investor who concealed millions of dollars he earned in bitcoin and became the first person criminally charged for failing to report gains from the sale of cryptocurrency by filing false returns was sentenced to two years in federal prison Thursday.

Ars Technica, Don’t Use Crypto to Cheat on Taxes: Bitcoin Bro Gets 2 Years:

Early bitcoin investor first to get prison time for crypto-related tax evasion.

A bitcoin investor who went to increasingly great lengths to hide $1 million in cryptocurrency gains on his tax returns was sentenced to two years in prison on Thursday.

It seems that not even his most "sophisticated" tactics—including using mixers, managing multiple wallets, and setting up in-person meetings to swap bitcoins for cash—kept the feds from tracing crypto trades that he believed were untraceable.

Department of Justice Press Release, Early Bitcoin Investor Sentenced for Filing Tax Returns that Falsely Reported His Cryptocurrency Gains:

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Musk & Ramaswamy DOGE Commission Eyes Tax Filing App

Washington Post, Musk’s ‘DOGE’ Commission Eyes New App for Americans to File Taxes:

The leaders of President-elect Donald Trump’s “Department of Government Efficiency” have discussed trying to create a mobile app for Americans to file their taxes free with the Internal Revenue Service, according to two people who spoke on the condition of anonymity to describe private conversations.

Trump last week tapped billionaire Elon Musk and former pharmaceutical executive Vivek Ramaswamy to lead the “DOGE” panel and gave them two principal mandates: cut government spending and reduce federal regulations. The leaders of the group have also discussed overhauling the tax system to let Americans file their taxes through a mobile app, viewing it as an opportunity to improve how millions of taxpayers interact with the federal government, the people said. This idea is not viewed as central to the commission’s work but could still emerge as a goal, although what form its recommendations take still remains unclear. ...

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WaPo: Meet The Black-Belt, Tattooed IRS Official Who Saved 23 Children From Their Abusers

Washington Post, Meet the Black-Belt, Tattooed IRS Official Who Saved 23 Children From Their Abusers:

At an early-morning Brazilian jujitsu class in Hamburg, N.Y., sweat flies as men pair off and pounce on each other, grappling and grunting on the mats. The fighters are so entangled that it’s hard to tell which hand or foot belongs to which body. Jarod Koopman, the black-belt instructor, pins a student named Mike to the floor and with a shift of his hip renders him immobile. Mike weighs 280 pounds; Jarod, 180. Brazilian jujitsu was created to do this: enable a smaller person to bring down a much bigger one.

Koopman teaches this class about three times a week, then changes out of his heavy cotton gi into the business shirt and pressed slacks of a professional accountant. When he sits down at his computer, what he will do at work is much the same as what he does at the dojo. This work has, among other things, led to the rescue of 23 children from rape and assault, the seizure of a quarter-million child abuse videos and the arrest of 370 alleged pedophiles. It has resulted in the largest-ever seizure of cryptocurrency headed to Hamas, al-Qaeda and the Islamic State. When Changpeng Zhao, chief of the world’s biggest cryptocurrency exchange, Binance, reported to prison in June, it was because Koopman’s small cybercrime team had uncovered evidence of the firm’s money laundering for terrorists and sanctions-busting for Iran, Syria and Russia. In the past 10 years, this work has returned more than $12 billion to victims of crime and to the U.S. Treasury.

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WSJ: A Tax-Shelter Crackdown Uncovers A Dentist’s ‘Smile High Trust’

Wall Street Journal Tax Report, A Tax-Shelter Crackdown Uncovers a Dentist’s ‘Smile High Trust’:

Ryan Ulibarri, a family dentist in Fort Collins, Colo., is in tax trouble that could take a big bite of his time and money [Department of Justice Press Release].

In late August, a Denver grand jury indicted him on six criminal counts for using an “abusive-trust tax shelter” to hide more than $3.5 million of taxable income he earned from 2017 to 2022. He allegedly underpaid more than $1 million of tax over that period.

Now Ulibarri could go to prison for tax evasion, and he could also owe the Internal Revenue Service unpaid taxes plus interest and penalties. Ulibarri, who earlier this month pleaded not guilty to the government’s charges, declined to comment through his lawyer, Joshua Lowther of Lowther Walker. 

While most Americans aren’t in the market for tax shelters, the allegations in this case are a reminder of what can happen when taxpayers ignore professional advice and common sense on taxes. They also show how easy it can be for people who want to slash their taxes to delude themselves.

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Tax Whistleblowers Receive $74m Of $263m Recovery; IRS Plans 170% Increase In Whistleblower Office Staff

Washington Post, They Exposed a Tax Cheater. They’ll Share a $74 Million Reward.:

The IRS recovered $263 million from a single individual, ending more than a decade of tax evasion and one of its biggest whistleblower cases ever, according to lawyers from three firms involved in the case.

The three informants will split $74 million, nearly a third of the government’s proceeds and the largest award allowed by law, the lawyers said.

It’s a major win for the IRS whistleblower program, which rewards people who expose high-dollar tax cheats but has come under criticism for its opaque and lumbering process. Collections have tumbled in recent years, from $1.4 billion in 2018 to $337 million last year. ...

The whistleblower office was created in 2006 to close the tax gap — hundreds of billions of dollars go unpaid every year — by encouraging people with direct knowledge to step forward. The office only pursues tax debts of $2 million or more, which translates into six- or seven-digit payouts for the informants.

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IRS: The Tax Consequences Of Online Crowdfunding

FS-2024-28 (Aug. 2024), IRS Reminds Taxpayers of Important Tax Guidelines Involving Contributions and Distributions from Online Crowdfunding:

Crowdfunding distributions may be includible in the gross income of the person receiving them depending on the facts and circumstances. The crowdfunding website or its payment processor may be required to report distributions of money raised if the amount distributed meets certain reporting thresholds.

Here are some important basics to keep in mind.

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IRS Celebrates National Whistleblower Day: $1.2 Billion Awards, $7 Billion Paid By Non-Compliant Taxpayers

IR-2024-199, IRS Whistleblower Office Celebrates National Whistleblower Day; Over $7 Billion in Collected Proceeds Thanks to Whistleblowers (July 29, 2024):

In anticipation of National Whistleblower Appreciation Day on July 30, the Internal Revenue Service Whistleblower Office today recognized the important role whistleblowers play in supporting the nation’s tax administration.

Since issuing its first award in 2007 through June 2024, the IRS has paid over $1.2 billion in awards based on the successful collection of $7 billion from non-compliant taxpayers. ...

In Fiscal Year 2023, the IRS paid awards totaling $88.8 million based on whistleblower information attributable to tax and other amounts collected of $338 million. In Fiscal Year 2023, the Whistleblower Office established 16,932 award claims, an increase of 44% compared to the average of the prior four years. ...

Actionable claims contain specific, timely and credible information. A whistleblower may qualify for an award when use of the whistleblower’s information results in proceeds collected. The awards paid to whistleblowers generally range between 15 and 30% of the proceeds collected and attributable to their information.

IRS Whistleblower Office, FY 2023 Annual Report:

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WSJ: Increased IRS Audit Rate Of Wealthy Taxpayers Reduced Efficiency By 93%

Wall Street Journal Editorial, The IRS Has a High-Earner Delusion:

Unlike bank robbers, IRS auditors tend to look where the money isn’t. That’s what happened after the agency started scrutinizing more tax returns from the wealthiest Americans. A new report says increased targeting of these taxpayers was hugely ineffective [The IRS Ceased Compliance With the $10 Million Taxpayer Treasury Directive in Favor of an Overall Focus on High-Income Taxpayer Noncompliance (2024-300-028) (June 20, 2024)].

The policy, launched in 2020 by former Treasury Secretary Steven Mnuchin, required the IRS to audit 8% of taxpayers each year who earned more than $10 million. To hit that quota, the agency started examining returns with fewer irregularities. The efficiency drop was steep, according to the Treasury Inspector General for Tax Administration, or Tigta, which recently reviewed the results.

The average dollars assessed per return above $10 million “was nearly six times more productive prior to the 2020 Treasury Directive,” meaning the average examination recovered six times as much in unpaid taxes. Or to put it in terms of IRS productivity, after the policy change the money that auditors assessed per hour from this income group dropped 93%. ...

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Treasury Department Seeks To Hire Deputy Tax Legislative Counsel ($147,649 - $221,900)

The U.S. Treasury Department is looking to hire a Deputy Tax Legislative Counsel (application deadline: July 29, 2024):

Summary
This position serves as Deputy Tax Legislative Counsel in the Office of the Tax Legislative Counsel (the Office). The Tax Legislative Counsel is the legal adviser on domestic, non-benefits tax legislation and guidance projects and assists the Assistant Secretary (Tax Policy) and the Secretary in providing leadership for the Department of the Treasury to assure consistency in tax policy and an integrated legislative program on tax matters.

Duties
In addition to the general duties as a senior attorney in the Office, the Deputy Tax Legislative Counsel has particular responsibility for the following principal duties:

Administrative Guidance Development:

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TIGTA: Occupancy Rate At Most IRS Buildings Is Less Than 50% (Washington, D.C. Is Lowest)

Treasury Inspector General for Tax Administration, The IRS Has Reduced Its Overall Space Footprint; However, a Significant Amount of Unneeded Office Space Still Remains (2024-100-027) (June 4, 2024):

Since FY 2018, the IRS has reduced its overall space footprint by approximately 2 million rentable square feet, from 24.3 million to 22.3 million, which represents a reduction of approximately 8 percent. However, additional efforts to address long-term space planning are needed to increase efficient space allocation and realization of its associated cost savings. Specifically, the IRS lacks a long-term space reduction plan that clearly specifies the space reductions it expects to achieve annually beyond FY 2026, and that sufficiently decreases its unneeded office space by maximizing the space savings associated with current practices in remote work, telework, and workstation sharing/hoteling.

In FY 2023, more than one-half of IRS buildings had a workstation occupancy rate of 50 percent or less. In addition, the IRS has not implemented workstation sharing/hoteling for approximately 61 percent of its employees on frequent telework.

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National Taxpayer Advocate Delivers Report To Congress: 500,000 Identity Theft Case Backlog Takes 2 Years To Resolve, IRS Answers 31% Of Taxpayer Phone Calls

IR-2024-173 (June 26, 2024), National Taxpayer Advocate Issues Mid-Year Report to Congress; Highlights Filing Season Challenges and Focuses on Strategic Priorities:

National Taxpayer Advocate Erin M. Collins today released her statutorily mandated mid-year report to Congress. The report says the tax-return filing season generally ran smoothly this year, but it identifies delays in issuing refunds to identity theft victims, misleading telephone measures that lead to poor resource allocation decisions, and delays in processing Employee Retention Credit claims as key taxpayer challenges. The report also emphasizes the importance of technology upgrades as the IRS seeks to modernize its operations in the coming years.

New York Times, Rampant Identity Theft Is Taxing the I.R.S.:

Rampant identity theft has overwhelmed the Internal Revenue Service, resulting in a backlog of 500,000 unresolved fraud cases, leaving taxpayers without refunds and credits that they are due, the agency’s watchdog wrote in a report to Congress on Wednesday.

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Treasury Department Office Of Tax Legislative Counsel Seeks To Hire Attorneys

Office of Tax Legislative Counsel Attorney-Advisor Positions

Priority application deadline is July 15, 2024, though we evaluate candidates year-round.

Job Description: The Office of Tax Legislative Counsel (TLC) is part of the Department of the Treasury's Office of Tax Policy responsible for advising the Assistant Secretary for Tax Policy and senior Treasury officials in connection with the formulation of legislative and administrative proposals that further domestic tax policies. TLC consists of over 20 lawyers and tax policy advisors who share a commitment to serve the nation by advising on and reviewing domestic tax policy and legal matters. Attorney-advisors work in the Main Treasury Building located at 1500 Pennsylvania, Avenue, NW, Washington, DC. Partial telework is permitted. 

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IRS ‘Sincerely Apologizes To Ken Griffin And Thousands Of Other Taxpayers Whose Personal Information Was Leaked To The Press’

Following up on Tuesday's post, Hedge Fund Billionaire Ken Griffin And IRS Settle Lawsuit Over Tax Returns Leaked To ProPublica:

New York Times DealBook, The Taxman Apologizeth:

The Internal Revenue Service has offered a rare public apology for a data leak that revealed the tax return details of Ken Griffin, the billionaire investor, and thousands of other affluent taxpayers.

The statement appears to draw a line under a legal battle. Griffin, the Citadel founder, sued the government in 2022 to force the agency to acknowledge its mistakes and to improve data security. The sides settled, and the I.R.S. published its apology yesterday.

A recap: Charles Littlejohn, an I.R.S. contractor, obtained the tax details of Griffin and others, including Jeff Bezos and Elon Musk, and disclosed them to ProPublica, which published the findings in a series of articles. Littlejohn, who was also accused of leaking Donald Trump’s tax documents to The Times, was sentenced to five years in prison in January.

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Hedge Fund Billionaire Ken Griffin And IRS Settle Lawsuit Over Tax Returns Leaked To ProPublica

Bloomberg, Ken Griffin’s Data Leak Suit Against IRS Ends In Settlement:

The Internal Revenue Service agreed to settle a lawsuit brought by hedge fund manager Ken Griffin that accused the agency of failing to protect his confidential financial information from a contractor who stole his tax data and leaked it to ProPublica. ...

Griffin sued over a data breach that resulted in ProPublica’s revealing private data on some of the wealthiest US taxpayers. A former IRS contractor, Charles Littlejohn, pleaded guilty to stealing and leaking the tax returns of Griffin, former President Donald Trump, Elon Musk and other billionaires. He was sentenced on Jan. 29 to five years in prison.

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AI-Generated Tax Advice Is Not (Yet) Making the Grade

Taxpayer Advocate Service, Is AI Generated Tax Advice Making the Grade?:

AI is a rapidly evolving new technology, and may not be able to provide accurate answers to your complex tax questions. ...

Recently, some leading tax preparation companies have taken AI a step further by providing generative AI assistants, often referred to as AI chatbots, to answer a wide variety of tax-related questions. ...

Despite efforts to ensure accuracy, these AI assistants may encounter difficulties interpreting complex tax laws correctly or considering unique circumstances that could impact a taxpayer’s return. As a result, taxpayers should not solely rely on AI-generated tax advice.

A recent informal review by the Washington Post found that two of the leading tax preparation companies’ chatbots provided inaccurate or irrelevant responses up to 50 percent of the time when initially asked 16 complex tax questions. ...

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WSJ: The IRS Money Hole Gets Deeper

Wall Street Journal Editorial, The IRS Money Hole Gets Deeper:

The Internal Revenue Service can’t write its own checks, which means it has to ask Congress for funding like any other agency. But if lawmakers have been tracking its misspending, they’ll turn down the tax collectors’ new $104 billion budget request and demand an audit instead.

Commissioner Danny Werfel appeared before the House Appropriations Committee recently and told legislators that the IRS faces financial collapse. “Resources are limited,” he said, and the agency “will likely use them entirely before the funding expires.” In other words, the IRS doesn’t think the $60 billion bonus it received from Congress in 2022 is enough, though it is supposed to last through 2031.

The IRS has a brilliant solution for this cash burn: Add more to the pile. Instead of explaining where the money went, Mr. Werfel asked the House to look away and grant his team another massive funding boost, this time through 2034. The extended bonus he seeks would bring total supplementary funding to $104 billion over 10 years. ...

Missing from the IRS’s request was an accounting of how its last round of funding has been run down so quickly. The money it received in the 2022 Inflation Reduction Act (IRA) was meant to fund a strategic overhaul, but not much of the plan has been carried out. ...

[T]he agency ... howled in protest when House Republicans clawed back $20 billion from the original $80 billion Democrats gave the agency in the 2022 IRA. Despite his pleas, Mr. Werfel is making a strong case for stripping the remainder instead of adding another cent of additional cash.

ProPublica: Sports Team Owners Face New Tax Scrutiny From The IRS

ProPublica, Sports Team Owners Face New Scrutiny From IRS Over Tax Avoidance:

The IRS has launched a campaign to examine whether wealthy taxpayers are violating the law when using their ownership of sports teams to save large amounts in taxes.

The effort will focus on sports industry entities that are reporting “significant tax losses” to “determine if the income and deductions driving the losses” are lawful, according to the IRS announcement earlier this year. That announcement, which consisted of one sentence on a webpage devoted to compliance campaigns by the IRS division that focuses on large businesses, did not specify what kinds of abuses the agency will be looking for.

The initiative comes after ProPublica, drawing on leaked IRS data, revealed how billionaire team owners frequently report incomes for their teams that are vastly lower than their real-world earnings.

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WSJ: 63% Of IRS Audits Target Taxpayers Earnings Less Than $200,000, Not $400,000 Promised By President Biden

Wall Street Journal Editorial, IRS’s Most Wanted: The $200,000 Man:

The Internal Revenue Service got an audit of its own in time for Tax Day, and two irregularities jump out. President Biden’s plan to hire a new army of tax collectors is falling flat, and the agents already at work are targeting the middle class.

Those are two findings of the IRS’s watchdog, the Treasury Inspector General for Tax Administration (Tigta). The report examines IRS progress on mandates from the Biden Administration backed by tens of billions in new funding. The first supposed goal was to audit more ultrawealthy and fewer middle-class filers, but it’s not going so well.

By last December the IRS decided that it wouldn’t begin tracking its progress until later this year. That’s because the agency has been slow to shift its focus to high-income taxpayers, who make up a small share of total filings. Its April 2023 strategic plan pledged that future audits would disproportionately target individuals making at least $400,000, but “did not include specifics on how the IRS was going to ensure it met this commitment,” says Tigta.

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Genadek Presents Newly-Available Individual-Level U.S. Tax Data (1969-1994) Today At Georgetown

Katie Genadek (Colorado; Google Scholar) presents Newly-Available Individual-Level U.S. Tax Data from 1969-1994 (with J. Trent Alexander (Michigan; Google Scholar), David Bleckley (Michigan), Jonathan Fisher (Washington Center for Equitable Growth; Google Scholar), Susan Hautaniemi Leonard (Michigan; Google Scholar) & Aristotle Magganas (UCLA)) at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Satterthwaite and Dayanand Manoli: 

This paper describes a series of linkable individual-level data from late-twentieth century federal income tax returns. The full universe Internal Revenue Service (IRS) Form 1040 files from 1969, 1974, 1979, 1984, 1989, and 1994 were held at the Census Bureau since originally being deliv ered by the IRS shortly after each year’s tax returns were processed. The data were recently made usa ble for research, and they are now available for request through the Census Bureau’s restricted data re search program. This paper discusses the provenance and composition of the files, assesses the cover age and quality of the data, and discussed potential uses of the data for research.

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Dorothy Brown And Steven Dean Question Biden Administration's Commitment To Addressing Systemic Racial Bias In The Tax Code

Tax Notes, Treasury Accused of Stonewalling Equity Agenda:

Dorothy Brown of the Georgetown University Law Center, a proponent of Treasury collecting race statistics to address tax code inequalities, feels seen but not heard as a member of the department's Advisory Committee on Racial Equity.

Brown, author of The Whiteness of Wealth: How the Tax System Impoverishes Black Americans — And How We Can Fix It, was one of 24 individuals chosen as part of Treasury’s newly created group, known as TACRE, and was named co-chair of its Data and Equity Research Subcommittee.

“The structure actually made sense. Having four, five members in each subcommittee allowed us to get a lot done,” Brown said, adding that her subcommittee made two recommendations: for Treasury to address racial equity in its annual green book and for Treasury and the IRS to send data to the U.S. Census Bureau to publish a comprehensive report on tax and race.

While both proposals were approved by the overall committee in March 2023 and sent to Treasury Secretary Janet Yellen for consideration, there has yet to be a response.

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Inside The IRS Unit Taking On America’s Millionaires And Billionaires

International Consortium of Investigative Journalists, Inside the IRS Unit Taking on America’s Millionaires and Billionaires:

A pair of Internal Revenue Service agents are attempting to interview a billionaire they suspect of cheating on his taxes. But across the table from the agents is a formidable entourage of esteemed tax professionals hired to defend the billionaire. They include white-shoe attorneys — each of whom knows more about their own arcane corner of tax law than just about anyone on earth — along with highly specialized accountants and economists.

Neither of the two IRS agents has a law degree. Complex arguments from the billionaire’s entourage fly over their heads. The IRS agents are outmatched by a team whose combined years of experience in tax law and accounting exceed their own by over a century.

This stark example, laid out by former IRS officials in interviews with the International Consortium of Investigative Journalists, isn’t a hypothetical so much as a glimpse into the agency’s regular challenges in auditing the United States’ highest earners. These battles often come down to experience and expertise. The IRS has been losing, former officials said.

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NY Times: There’s A Tax Season Villain, And It’s Not The IRS

New York Times, There’s A Tax Season Villain, and It’s Not the I.R.S.:

It’s the most miserable time of the year: tax season.

Americans are about to spend millions of hours and billions of dollars filing their federal income taxes, and they are pretty sure they know who is responsible for their pain: The misanthropes at the Internal Revenue Service.

But we’re here to convince you that the I.R.S. is not the problem.

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NY Times: Former Contractor Who Leaked Trump’s Tax Returns Sentenced To 5 Years In Prison

New York Times, Former Contractor Who Leaked Trump’s Tax Returns Sentenced to 5 Years in Prison:

A former Internal Revenue Service contractor accused of leaking the tax documents of Donald J. Trump and other wealthy Americans was sentenced on Monday to five years in prison.

The former contractor, Charles Littlejohn, known as Chaz, worked for the tax agency from 2017 to 2021, when he stole the tax records of thousands of the country’s wealthiest people, including Mr. Trump, prosecutors said. Mr. Littlejohn then provided the information to The New York Times and ProPublica.

Prosecutors said his actions “appear to be unparalleled in the I.R.S.’s history.”

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2023 Tax Filing Season Opens Today As IRS Computer Snarl Could Impact Millions Of Taxpayers

The Messenger, IRS Computer Snarl Could Threaten Millions of Taxpayers as Filing Season Is About to Open:

A computer snarl has hit the Internal Revenue Service just as the filing season is set to open, with the agency saying Friday that some payroll providers, banks, mortgage companies and accountants have been unable to upload required tax documents.

The problem, a login issue with an upgraded IRS computer system, is affecting some companies that file forms used to report taxable income earned by independent contractors. It's also impacting banks issuing statements of interest income and retirement account distributions, corporations reporting dividends received by shareholders, and government agencies issuing tax refunds, the IRS said in an email midday Friday.

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Thomas: Improving The Tax System For Independent Contractors With Quarterly 1099s

Kathleen DeLaney Thomas (North Carolina; Google Scholar), Improving the Tax System for Independent Contractors: Quarterly 1099s, 182 Tax Notes 79 (Jan. 1, 2024):

In this article, Thomas proposes a new quarterly form sent to independent contractors that would inform them of their quarterly earnings and their obligation to remit estimated taxes on that income, easing the compliance burden on those taxpayers and helping decrease the tax gap.

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Lily Batchelder Returns To NYU After Serving Over 3 Years As Assistant Secretary For Tax Policy

NYU Law News, Lily Batchelder Returns to NYU Law After Serving as the Treasury Department’s Assistant Secretary for Tax Policy:

Lily Batchelder will return to NYU Law in Spring 2024 after serving as assistant secretary for tax policy at the US Department of the Treasury. Batchelder, who is the Robert C. Kopple Family Professor of Taxation at the Law School, was nominated to the Treasury post by President Joe Biden and confirmed by the US Senate in 2021 by a vote of 64-34.

As assistant secretary, Batchelder led Treasury’s Office of Tax Policy (OTP), which is responsible for developing and implementing the federal government’s tax policies and programs, negotiating tax treaties, and providing estimates for the president’s budget, fiscal policy decisions, and cash management decisions. In collaboration with partners across the US government, OTP also helps shape economic policy, health and retirement policy and clean energy policy. This includes implementation of landmark legislation, such as the Inflation Reduction Act of 2022, the Infrastructure Investment and Jobs Act, the CHIPS and Science Act, SECURE 2.0, the American Rescue Plan, and the Affordable Care Act. Batchelder has also overseen US negotiations in the OECD-led international tax deal, which aims to reduce corporate profit shifting between high- and low-tax jurisdictions. ...

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NY Times: National Taxpayer Advocate Laments IRS Struggles To Answer Taxpayer Phone Calls Despite Budget Infusion

New York Times, Effort to Revamp I.R.S. Faces Challenges Despite Funding Infusion:

The Office of the National Taxpayer Advocate lamented that the tax collection agency, which now faces budget cuts in Congress, is still struggling to answer the telephones.

A multibillion-dollar federal effort to modernize the Internal Revenue Service has not yet solved the agency’s struggles to answer customers’ calls, ameliorate identity theft or process amended tax returns, the agency’s watchdog wrote on Wednesday in a report to Congress.

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NY Times: IRS To Begin Trial Of Its Own Free Tax-Filing System

New York Times, I.R.S. to Begin Trial of Its Own Free Tax-Filing System:

The Internal Revenue Service is rolling out a free option for filing federal tax returns this year to some residents of a dozen states.

Last month, the agency published details of its plan to test an in-house filing system, in which taxpayers submit their federal tax returns directly to the agency online at no cost. Residents of 12 states are eligible to participate if they meet certain criteria.

“This is a critical step forward for this innovative effort that will test the feasibility of providing taxpayers a new option to file their returns for free directly with the I.R.S.,” Danny Werfel, the agency’s commissioner, said in a recent statement.

While the direct filing system is starting on a limited basis, it has already faced some resistance, particularly from commercial tax-preparation companies.

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Longtime Tax Watchdog J. Russell George Dies After Illness

Bloomberg, Longtime Tax Watchdog J. Russell George Dies After Illness:

J. Russell George, who served as a key IRS watchdog for nearly two decades, most notably during the 2013 controversy over groups’ applications for tax-exempt status—died earlier this week after a lengthy illness.

George had served as the Treasury Inspector General for Tax Administration since 2004, after being nominated by then-President George W. Bush and confirmed by the Senate. His death was announced Wednesday by Acting Inspector General Heather Hill. ...

In May 2013, George’s office released what became a bombshell report finding that the IRS had subjected conservative groups’ applications for tax-exempt status to extra scrutiny and delays, triggering a political firestorm for the agency and the Obama administration. Democrats criticized George at the time for leaving out the fact that liberal groups also faced extra IRS scrutiny. George said he didn’t know about the scrutiny of progressive groups until after the initial report was released. ...

He grew up in New York City and earned his bachelor’s degree from Howard University and his law degree from Harvard University.

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Why Cutting IRS Funding Is Not Conservative

Washington Post Op-Ed:  Why Cutting IRS Funding Is Not a Conservative Move, by Brian Riedl (Manhattan Institute):

Last year, President Biden and congressional Democrats enacted $80 billion in new IRS funding for the next decade. During the debt limit debate earlier this year, Republicans successfully negotiated a $20 billion cut in that funding. And now, in the appropriations showdown, they’re going after the rest of it.

The IRS has long been an easy and popular target, because few of us enjoy paying taxes. And the agency has invited criticism with its history of overzealous audits, including a heavy-handed targeting of conservative nonprofit organizations during the Obama administration that fueled the latest round of GOP cuts.

However, defunding and weakening the IRS is not conservative. To the contrary, it will ultimately drive up deficits and raise middle-class taxes.

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Joint Tax Committee Publishes Bluebook: General Explanation Of Tax Legislation Enacted In The 117th Congress

The Joint Committee on Taxation has released General Explanation of Tax Legislation Enacted in the 116th Congress (JCS-1-23) (Dec. 21, 2023) (560 pages):

This document, prepared by the staff of the Joint Committee on Taxation in consultation with the staffs of the House Committee on Ways and Means and the Senate Committee on Finance, provides an explanation of certain tax legislation enacted in the 117th Congress.

For each provision, this document includes a description of present law, an explanation of the provision, and the effective date. Present law describes the law in effect immediately before enactment of the provision and does not reflect changes to the law made by the enacting legislation or by subsequent legislation. For a bill with a Committee report (or, in the absence of one, a contemporaneous technical explanation prepared and published by the staff of the Joint Committee on Taxation), this document is based on the language of the report (or explanation). This document follows the chronological order of the tax legislation as signed into law.

Section references are to the Internal Revenue Code of 1986, as amended (the ‘‘Code’’), unless otherwise stated. ...

The Appendix provides the estimated budget effects of tax legislation described in this document.

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WSJ: Does The IRS Have Authority To Circumvent Congressional Tax Policy With Tax Cuts By Administrative Fiat?

Wall Street Journal, IRS Delays Tax Deadlines Set by Congress. It Could Cost $8 Billion.:

Congress set strict enforcement deadlines when it created new tax requirements for e-commerce platforms, older 401(k) savers and cryptocurrency brokers.

The Internal Revenue Service has now postponed them all for two years—which could cost the Treasury more than $8 billion. ...

The IRS decisions help the affected taxpayers avoid burdensome requirements. Millions of people selling goods on eBay or reselling tickets on StubHub won’t get confusing tax forms in January. High-income workers age 50 and up can still make their full retirement contributions in pretax dollars next year instead of posttax accounts. And crypto brokers don’t yet have to report transactions that could lead to eight billion information returns going to the IRS each year.

At least in the short run, however, the tax agency’s moves frustrate lawmakers’ attempts to raise revenue and plug gaps in tax compliance.

They are symptomatic of a phenomenon in which administrations of both parties take action without the oversight or cost analysis required by legislation. The tax delays aren’t as headline-grabbing as President Biden’s student-loan relief or former President Donald Trump’s border-wall construction. But they allow the IRS to deliver what are, in a sense, tax breaks without congressional approval.

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Sen. Crapo: Democrats’ Tax Gap Manipulation

Sen. Mike Crapo (R-Idaho; Ranking Member, Senate Finance Committee), Democrats’ Tax Gap Manipulation, 181 Tax Notes Fed. 1457 (Nov. 20, 2023):

The IRS recently issued a new projection of the tax gap [IRS Research, Applied Analytics and Statistics, “Federal Tax Compliance Research: Tax Gap Projections for Tax Years 2020 and 2021” (Oct. 12, 2023)]. While the projection’s release received much attention and some hand-wringing from Democrats, it actually adds little to the previous estimate. Essentially, the new projection adjusts that estimate for recent receipts, not changes in compliance. 

The tax gap figure is used to gauge taxpayer compliance and projects the difference between taxes believed to be owed and taxes actually paid. Per the IRS’s projection, the 2021 tax gap is $688 billion, an increase of over $192 billion compared with the 2014-2016 estimate [IR-2023-187, Updated Tax Gap Estimate Shows Big Jump From Prior Years (Oct. 12, 2023)].

In releasing this information, the IRS pledged an “urgent” crackdown by boosting IRS enforcement, especially on high-income individuals, partnerships, and corporations. But the premise for this new crackdown is built on a flawed foundation, albeit a convenient narrative to support the IRS’s bloated budget and new auditing regime.

It is crucial here to understand what the IRS’s $688 billion projection is and is not. It is simply a projection of what the 2021 tax gap would be, assuming that the tax law and compliance rates from the 2014-2016 estimate are held constant and applied to the 2021 economy.

The IRS claims the tax gap is dramatically rising. This is misleading at best. ...

When viewed in proportion to the economy’s size over the last 20 years, the tax gap is actually flat and historically average. The Cato Institute examined the tax gap as a percentage of GDP and found that for 2021, the tax-gap-to-GDP ratio was 2.9 percent, squarely in line with the last 20 years of estimates.

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IRS Announces Direct e-File Tax Return Pilot Program In 13 States For 2024 Filing Season

IR-2023-192 (Oct. 17, 2023), Agency Finalizing Direct File Pilot Scope, Details as Work Continues This Fall; EITC, Child Tax Credit Among Projected Provisions Covered:

As part of larger transformation efforts underway, the Internal Revenue Service announced today key details about the Direct File pilot for the 2024 filing season with several states planning to join the innovative effort.

The IRS will conduct a limited-scope pilot during the 2024 tax season to further assess customer support and technology needs. It will also provide a platform for the IRS to evaluate successful solutions for potential operational challenges identified in the report the IRS submitted to Congress earlier this year.

Arizona, California, Massachusetts and New York have decided to work with the IRS to integrate their state taxes into the Direct File pilot for filing season 2024. Taxpayers in nine other states without an income tax — Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming — may also be eligible to participate in the pilot. Washington has also chosen to join the integration effort for the state's application of the Working Families Tax Credit. All states were invited to join the pilot, but not all states were in a position to join the pilot at this time.

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WSJ: A Case of Tax Fraud—At The IRS

Wall Street Journal Editorial, A Case of Tax Fraud—at the IRS:

The Internal Revenue Service makes clear that taxpayers who willfully conceal or alter tax documents risk severe penalties. But what happens when government auditors are caught manipulating documents and hiding those actions in court?

The IRS this month agreed to settle and drop a penalty in Lakepoint Land II LLC v. Commissioner. A judge in U.S. Tax Court had sanctioned the IRS in the case, ripping the agency’s counsel for acting in “bad faith” and having “multiplied the proceedings in this case unreasonably and vexatiously” by failing to tell the court that documents it used to assess a penalty had been backdated.

Several other Tax Court cases suggest wider IRS document fiddling as the agency has gone after “syndicated conservation easements.” Congress created conservation easements in the 1980s, letting land owners donate the development rights for acreage to a qualified charity in return for a tax deduction. ...

One legal rub: The federal tax code requires an IRS supervisor to approve in writing the initial determination of a penalty. That didn’t happen in Lakepoint. The company presented emails to Judge Christian Weiler showing that the IRS agent on the case failed to get her supervisor’s written approval in 2016 for a proposed $15 million penalty.

When the agent realized this—in February, 2017—her supervisor acknowledged in an email that this was a “HUGE oversight” and backdated her signature to seven months earlier. IRS attorneys nonetheless swore to the accuracy of this date, and they continued to mislead the court for months even after the falsification was discovered. Judge Weiler ordered the IRS to pay Lakepoint’s fees and expenses.

Three more partnerships—Arden Row Assets, Basswood Aggregates, and Delwood Resources—have presented evidence of similar backdating by a different IRS agent and manager. ... The cases suggest a culture of disregard for tax laws that the IRS requires taxpayers to follow to the tee. Imagine the fines or prison sentences awaiting average Joes who backdate tax documents and lie about it.

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