IRS Will Have to Get Creative in Enforcement of Obamacare

image via powells.com

According to the Treasury Inspector General for Tax Administration (TIGTA), Obamacare will result in the most expansive set of tax law changes this nation has seen in 20 years.  But from a collections standpoint, is it anything more than a bunch of new words?

Obama’s health care reform law charges the IRS with enforcement, but makes them do so with their “bare hands.”  The IRS normally has a vast array of collection tools, or “weapons” at their disposal to enforce this nation’s tax laws.  If we don’t pay, the IRS begins with threatening letters, then imposes penalties and interest on unpaid balances.  Next, the IRS moves on to levies, liens, and wage garnishment.  And if this doesn’t result in full payment of what is owed, the IRS will pull out the heavy artillery such as the civil suit or seizure of personal and real property.  It is the threat of these weapons that convinces many taxpayers to seek professional help from a tax relief attorney or, if circumstances warrant, to just to find a way to pay it.

But the new health care law does not endow the IRS with the same collection tools they have always relied on.  In fact, the only way the IRS is permitted to collect the individual mandate “tax” is by capturing a taxpayer’s refund, and even that will lose its effect once people figure out how to adjust their withholdings and avoid a big refund.  I guess the pen will have to be the IRS’ new weapon — after all, they can always send those threatening letters.

IRS Still Not Giving Proper Notice of Liens

Three years ago the Treasury Inspector General for Tax Administration (TIGTA) recommended that the IRS change its practices regarding tax lien notices, and from the looks of this year’s lien notice audit, it does not appear that the IRS has any intentions of doing so.

Today TIGTA released its 2012 lien notice audit to the public and some of the same problems they identified in 2009 still linger. The issue that the IRS has swept under the rug and ignored for the past 3 years has to do with notifying taxpayers’ representatives of a lien filing.  Specifically, they’re not consistently doing it.  The IRS promptly notifies taxpayers by mail when it registers a lien against them, and it is supposed to send the same notice to their attorney, CPA, or other representative with a Form 2848 Power of Attorney on file.

 [A]s noted in previous audits, the IRS did not always follow its own internal guidelines for notifying taxpayer representatives of the filing of the NFTL.  Therefore, the rights of some taxpayers may have been violated when the IRS did not notify their representatives of lien filings.

~ J. Russell George, TIGTA

Furthermore, the IRS does not always send lien notices to the taxpayers’ last known address.  According to the report, there are instances in which returned lien notices with bad addresses could be resent to the correct addresses, but nothing is done about it.  Just another instance of TIGTA needing more teeth to actually enforce rather than recommend.

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IRS Promises to Start Showing Whistleblowers Some Love

photo courtesy of blogs.courant.com

The IRS appreciates getting tips that help them catch people who seek tax relief illegally, but they haven’t done a very good job of showing it over the years.  The relationship between the IRS and whistleblowers has been strained, to say the least.

The IRS Whistleblower Office was established in 2007, and for all we know it was set up in an empty warehouse staffed by crickets.  The Whistleblower Office is notorious for dragging out cases far too long, failing to communicate with whistleblowers to obtain key information, not reaching the correct decision on cases, and not paying out when the decision is favorable for the whistleblower.

However, in a June 20th memorandum, the IRS declared that it would make some concrete improvements to the Whistleblower Program (outlined below).

“Let’s Kiss & Make up”:

  1. Improve communication with whistleblowers by debriefing in most cases
  2. Act on cases in a timely manner
  3. Comprehensive review of Whistleblower Office procedures
  4. Established interim guidelines imposing 90-day deadlines at key stages of the review process

AND, if you happen to be an “external stakeholder,” (whoever that might be) then the IRS says it will be working with you to establish more permanent guidelines.

www.mwattorneys.com

 

 

AMA Supports Soda Tax, On One Condition

image via mealsformilesblog.com

While there is no silver bullet that will alone reverse the meteoric rise of obesity, there are many things we can do to fight this epidemic and improve the health of our nation.  Improved consumer education on the adverse health effects of excessive consumption of beverages containing added sweeteners should be a key part of any multifaceted campaign to combat obesity.

Where taxes are implemented on sugar-sweetened beverages, using revenue for anti-obesity programs and educational campaigns explaining the adverse effects of excessive consumption of these beverages will help to reduce the consumption of these caloric beverages and improve public health.

~ Dr. Alexander Ding, AMA board member

Its clear from this statement that the AMA is not fully embracing a soda tax.  The emphasis should be on educating the public about the health risks of chugging sugary soda day after day, and the benefits of replacing soda with water.

The AMA is saying that a soda tax may be effective as part of a comprehensive plan to reduce obesity in our nation, and it would not go very far on its own.  Also, if Dr. Ding’s statement is representative of the AMA’s position, the focus is not on whether or not a soda tax should be implemented, but what to do with the funds should that be the case.  Nobody believes that a soda tax would curb consumption to the point that we no longer have a problem with sugar and obesity.  The real value in a soda tax would be the projects and programs that could be funded if the money is spent responsibly.

 

Pasties Won’t be Taxed in Britain

Believe me, it’s not what you think.  In the United States pasties are a warm weather clothing(ish) item worn by some women.  But in England it is a popular food eaten by the common folk.  Picture a cross between a pizza pocket and a chicken pot pie; a hand-held pastry filled with meat and vegetables.  Preparing them at home can be tricky and time-consuming.  According to one recipe by our guy Emeril Lagasse, prep time is about 1 hour & 20 minutes.  Many Britons pick them up at the corner shop where they are mass-produced and sold lukewarm.

Britain’s finance minister came under fire lately for suggesting a tax that would increase the price of these goodies.  This could have been perceived as either discriminatory towards the middle-lower class citizens, or simply as proof that the he and other elites in government are out of touch with ordinary Brits.  But the Pasty Tax was never ratified.  Instead an exception was carved out for “hot takeaway food that is cooling down after being cooked.”

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TIGTA Recommendations Need More Teeth

It would seem that TIGTA’s “recommendations” to the IRS have fallen on deaf ears at times.  Perhaps TIGTA needs to be given greater authority so it can lay down some consequences for non-compliance.  Taxpayers face stinging consequences like the bank levy and wage garnishment for failing to abide by our tax laws, but all the IRS has to fear is yet another unfavorable audit report — no more than a slap on the hand.

The Whistleblower program, as we know it, was established in 2007; the same year a separate Whistleblower Office was created.  Two years later TIGTA identified some problems with the program and made its recommendations.  In an audit report made public today, TIGTA states that the IRS still hasn’t complied with the changes that were suggested in 2009.

These are some of the recommendations that the IRS ignored:

  • establish timeliness standards for processing of whistleblower claims
  • establish a quality review process
  • correction of inaccurate data revealed in the 2009 audit

By far my favorite snippet from the audit summary:

“In the prior report [2009], TIGTA found that information captured on three inventory systems was inaccurate. In this review [2012], auditors determined that employees manually transferred claim information from the three systems into a single inventory control system, Entellitrak.  However, IRS officials did not ensure steps were taken to reconcile and correct the inaccurate information that was reported in our Fiscal Year 2009 review.”

This is too good!  The way I read this it’s like the IRS swept the problem under the proverbial rug.  Instead of fixing the problem, they just moved it to a different spot.  This is a familiar approach to problem-solving that trickles down to the IRS call center employees.  They’re punching in and punching out with no real sense of accountability for the quality of their work.

Tax Songs

Musicians (especially the boots and large belt-buckle donning musicians) love to sing about ordinary stuff that we’re familiar with.  What respectable country song doesn’t mention at least one of the following?:

  • dog
  • truck
  • liquor
  • women
  • bar fight
  • being broke

Well what about taxes?

We all know how common tax problems are, but they just don’t seem to get fair coverage in country songs.  The nice thing about taxes is you don’t have to reveal your political leanings when singing about how much you hate them.  Taxes are a universal inconvenience; a thorn in our collective side.  But taxes don’t belong in just any genre of music, otherwise you end up with something horrible like this:

‘Cause they taxed me

With a scalpel piece by piece

They cut me deep and bled me dry

Until there was nothing left to bleed

(from “Life After Death and Taxes” by Relient K)

A good tax song sounds something like this:

 

 

Leaked Photo of New 740hp Ferrari

If you’re going to leak a photo of a beautiful 2013 Ferrari, wouldn’t you take care to produce a high-quality digital photo?  This one is seriously lacking.  The car doesn’t quite fit the photo.  It’s all grainy and dull.  And there’s the guy posing with the vehicle that must not care about getting in trouble for the leak.  Although I suppose he can definitively say he wasn’t the one who snapped the shot!  Maybe the picture was taken with a little spy camera built into the button of the photographer’s coat — maybe that’s why it’s such a bad picture.

Who Can Improve the IRS’ Image?

Clearly there are few firms, organizations, or government agencies that pose a greater PR challenge than the IRS.  That’s why the Service is soliciting pitches from 12 full service communications and marketing companies to replace the current $17.5 million contract it awarded to PR firm Porter Novelli four years ago.  The IRS needs to convince Americans who are only interested in tax relief that filing and paying your taxes is not that bad.

The IRS is in dire need of some PR assistance.

~ Captain Obvious

The Novelli contract is over, and many would ask, “What did they do?”  I suppose they did spruce up the IRS website with some new smiling faces.  And they tried to change the face of the IRS to make it seem younger and more in-touch with technology . . . emphasis on “tried.”

The new contract is worth $15 million and with that kind of incentive, many PR specialists are going to be up for the challenge.  And I’m sure each will have their individual spin on what should be done.  For instance, David Bauman would try to turn things around for the IRS by first changing their name.  That’s how he gradually repaired Ron Artest’s image — by changing his name to Metta World Peace.  See WSJ article for the full story.

What would you chose as the IRS’ new moniker?

In the Spirit of “Movember” . . .

There are countless and obvious good reasons to grow a mustache, especially during the month of Movember. But have you ever considered the tax implications of maintaining and proudly displaying your mo?

No?

Well, that’s because there are none. At least not yet. All this talk of simplifying (or eliminating) the tax code sounds nice, but it fails to recognize our individual differences, including our facial hair propensities. We need to consider a tax code amendment that would create a tax incentive for mo growers.  Please take the time to view this important public service message from the American Mustache Institute to learn more about how the STACHE Act could help stimulate the economy.