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.