The IRS is Not a Bully
The IRS is not a bully. To stop the harassment, did a parent ever tell you to poke the neighborhood bully in the nose? How’d that work out for you? It was effective but painful, right? I know. Without question, the IRS is an important part of our government and absolutely vital to its success and to the wellbeing of us all. The vast majority of IRS auditors and collectors are fair, reasonable and terrific professionals, who are just doing what Congress dictates. But what happens if you get “that” auditor or collector? You know, the mean, totally unreasonable one that likes to torment, just because they can. With thousands of auditors and collectors on the IRS payroll, simple statistics tell us that a certain number will likely fall into this category.
To be clear, this problem was not created by the IRS. It was 100% created, and is actively being made worse, by Congress. Congress seems reliant on consultants recommending increasingly complex tax codes that Congress likely doesn’t understand but passes anyway! And with apparent total disregard, or knowledge, of implementation, consequences or fairness. Because these onerous tax codes don’t usually affect members of Congress, they’re happy to add more complexity, fair or otherwise. They’re content to jeopardize consumer tax rights and common-sense fairness, if it only hurts others. Thus, turning the IRS into a colossal collection agency with unprecedent power! Especially dangerous if you get “that” unreasonable IRS auditor mentioned above.
The government desperately needs money and views the estimated $441 billion “tax gap” (The difference between taxes collected and what is actually owed to the government)1 as a source of funds just waiting to be mined. More aggressive policies, data mining, auditors and collectors are searching hard for more tax revenues. Unfortunately, many honest taxpayers being audited feel they’re being unfairly bullied.
Recent stories dealing with IRS forms 3520 and 3520A clearly illustrate the problem. Penalties are often blatantly unfair and incomprehensibly severe for the infraction. A growing number of law-abiding tax paying Americans find themselves paying huge penalties for filing late (not failure to file, just filing a couple months late, but still prior to April 15th!). Penalties that, in some cases, are significantly larger than the small accounts involved. One account was particularly troubling because everything was actually completed correctly and on time! Many taxpayers being audited feel the IRS is just throwing things against the wall, hoping something might stick and get paid out of fear or ignorance. This does sound a little like a bully, or a rouge collection agency, or perhaps both?
So, poke the IRS in the nose, right? Wrong. Even street justice can be elusive if you’re being audited. Say a bully, goes to his big brother with a bloody nose. As soon as his brother learns the full story, he tells the bully he had it coming, and walks away – score one for fairness. The IRS doesn’t seem to have this kind of big brother, too bad Congress doesn’t fill this roll!
However, if audited remember the old adage; You’ll get more bees with honey than vinegar. So, be polite, be honest and be accurate. Common courtesy won’t make anything go away, but it won’t escalate the situation either. Finally, in 2010 the IRS Criminal Investigation Division had plans to purchase 60 Remington Model 870 police 12-gauge pump-action shotguns. So, if someone is packing heat, you better not poke them in the nose! Besides, the IRS is not a bully. We have to use another word to describe folks carrying shotguns and demanding money.
For additional information about how to avoid being audited and how to deal with an IRS audit, go to www.GROCO.com and search what you’re looking for in our article section, or go directly to here.
We hope you found this article about The IRS is Not a Bully helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
To receive our free newsletter, contact us here.
Subscribe to our YouTube Channel for more updates.
Considerately yours,
GROCO, GROCO Tax, GROCO Technology, GROCO Advisory Services, GROCO Consulting Services, GROCO Relationship Services, GROCO Consulting/Advisory Services, GROCO Family Office Wealth, and GROCO Family Office Services.
Alan L. Olsen, CPA, Wikipedia Bio
Like it or Not, Now Is the Time to Think About Taxes
There are still several days before we officially celebrate Christmas, which means people still have plenty to do, including finding those important last-minute gifts. However, if you are done with your shopping, maybe you can put Christmas aside for a moment and focus on taxes. Taxes are probably the last thing you want to think…
Deutsche Being Bank Accused of Tax Fraud By Federal Prosecutors
The U.S. has been increasingly going after foreign financial institutions that try to skimp on taxes. The latest move from the IRS is an aggressive lawsuit against Deutsche Bank, which the federal tax agency claims owes the U.S. somewhere in the neighborhood of $190 million in overdue taxes, penalties and interest. However, if you ask…
Looking to Grow Your Firm? Consider GROCO
There are hundreds of tax and accounting firms all over the country, including right here in the Bay Area. These firms come in all levels of size and expertise. At GROCO, we are always looking to grow our business and we know that many, if not all, companies are looking to do the same. If…
Is Corporate America Getting Away With Too Little Tax?
It’s an argument that’s all too common in the business world: big multi-national companies don’t pay their fair share of taxes. A new study will only serve to add more fuel to the fire, as according to its findings, seven of the 30 biggest companies in the United States reportedly paid more to their CEOs…