Procedure for Reporting Tax Law Violations Needs Work

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Maybe it’s because of the recent unprecedented IRS whistleblower payout, but people seem to be eager to turn others in for tax law violations these days.  Nevermind their own tax problems.  Of course most of the inquiries I see come from the estranged spouse or the “friend” seeking revenge.

The best way to report IRS problems involving fraud and other tax law violations is by completing and filing IRS Whistleblower Form 3949-A.  But according to TIGTA, Form 3949-A is too complicated for most taxpayers to be able to complete thoroughly and accurately.  And many are also using the form for something other than its intended purpose.

TIGTA studied a sampling of 530 whistleblower forms 3949-A and identified some serious problems:

  • 27 percent could not be processed because they didn’t provide sufficient details (not surprising since the form asks for things like the social security number and birth date of the person you are reporting)
  • 21 percent were incorrectly used to report identity theft (some IRS service centers were actually instructing taxpayers to use this form for ID theft when, in fact, they should be filing Form14039, the ID Theft Affidavit)
  • Forms that reported “other issues” not covered by F3949-A were often shredded by IRS personnel instead of being forwarded to the appropriate IRS function

 

Can We Trust the IRS with Guns?

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"desk pop" from the movie The Other Guys

TIGTA recently audited and reported on the firearm policies of the Criminal Investigation (CI) division of the IRS and found them to be somewhat lacking.  Usually I like to focus on tax relief, but this has got to be the strangest TIGTA report I have ever seen.  I couldn’t pass it up.

CI special agents are a unique breed, to say the least.  They are like the offspring of two completely opposite carreers: one’s tools are a pocket protector and calculator, and the other’s are a bullet proof vest and concealed handgun.  These are probably guys who really wanted to be FBI or CIA but ended up at the IRS instead.  And, let’s face it, a tax attorney probably sees as much action as they do.  They aren’t chasing down drug dealers; they are apprehending people who cheated on their taxes or who are running from a massive tax debt.  They definitely aren’t firing their weapons on a regular basis, so it’s no huge surprise to me that the firearm policies are subpar.

Their firearms qualification passage rate is pretty high; that’s not the problem.  TIGTA’s report has more to do with CI putting in place consistent policies and consequences.  The scenario that really stood out to me was what to do when a CI special agent accidentally discharges his firearm!  The report states that this is not a common occurence, but according to the report, there are more accidental discharges than intentional discharges!

During fiscal years 2009-2011, there were a total of 19 reported discharge incidents in all of CI; 8 intentional and 11 accidental.  Is is just me or does this report make CI agents look like a bunch of clowns?

Right to Representation Threatened by IRS Carelessness

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Didn’t I just write about taxpayer rights?  Didn’t I say something about how the IRS is not interested in protecting taxpayer rights?  The Treasury Inspector General for Tax Administration (TIGTA) released a report today that exposes IRS’ disgregard for taxpayers’ right to representation.  I usually like being right, but not when it’s something like this that threatens access to tax relief.

There are procedures in place that are supposed to ensure that the tax attorney, or other representative, is kept in the loop with regard to certain key actions.  For example, an IRS Revenue Officer is not supposed to contact the taxpayer directly when there is a Power of Attorney on file, and a Revenue Officer is supposed to send copies of correspondence to the authorized representative.  However, the procedures are not being followed by some revenue officers and the procedures are not being enforced by some key management personnel.

I realize this is not a direct denial of the right to representation, but any action (or inaction) that would weaken the benefits associated with this right is troubling and should be viewed as a significant threat.  TIGTA’s report mentions that nobody complained about the infringements on their right to representation in any of the sample cases in it’s study, and I find this equally troubling.