IRS: The Raiders of Government Agencies

Usually when people are dressed in black surrounding a hole in a solemn ceremony, its a funeral.  But Tony Sparano, the interim head coach of the 0-4 Oakland Raiders, gathered the team for a special symbolic football burial this week.  He said that the football represented the first four games of the season.  The hope is that this little exercise will help the team to put it all behind them and move forward with a clean slate.

Maybe the IRS Commissioner, John Koskinen, should do something like this with his team.  I’m not sure what item(s) could be used to represent the past few years of missteps at the IRS, but to really drive the point home he would need to dig a hole the size of the Grand Canyon.  Actually, come to think of it, maybe they already did this exercise using Lois Lerner’s hard drive.  Nobody would ever consider that the IRS actually physically buried her emails in the ground.

Oakland Raiders vs. Internal Revenue Service.  Obviously the comparisons are unlimited given the fact that a Raider is actually a pirate, and a pirate is known for forcefully taking one’s hard-earned booty.  But I’ll leave this to your own imagination.

IRS Audits and Public Perception

We know there is at least some rhyme or reason to who gets selected for an IRS audit.  If we knew all the criteria, we could position ourselves to avoid audits 100% of the time, but, for obvious reasons, the IRS hasn’t been so generous when it comes to publishing their audit selection criteria or algorithms.  One thing that we can be sure of is the IRS flags tax returns that possess certain risk factors because, if they’re going to spend resources auditing a certain number of returns each year, it might as well be those that are more likely to contain errors or “problems.”

So far, so good.  That much makes sense.  The IRS flags cases that it considers to be good audit material.  But, based on a news story that broke today, maybe the IRS should also be flagging cases that should not be audited.

Of all the “do not audit” entities out there, shouldn’t Logan Clements, the producer of “Sick and Sicker: ObamaCare Canadian Style,” be near the top of the list?  I haven’t seen this film, but I’m gonna guess that Clements is not a big fan of Obama, and not a big fan of the Affordable Care Act.  And I have absolutely no idea about the integrity of his taxes, but it just doesn’t look right for the IRS to audit somebody like this.  Meanwhile, Clements is using the media attention from the audit to catapult his film into the spotlight quite nicely.  I understand the IRS faces a catch 22 here: if they audit this guy, it looks very fishy, but if they let him go, it sets a weird precedent and makes a whole segment of society (notable conservatives) exempt from audits.  In fact, I think a strong case can be made that public perception should not even enter the equation.  But the IRS better hope they find something seriously wrong with this guys taxes.  Or if it turns out to be a “no changes” kind of audit, they had better close it quickly and hope this story fades away quietly.

 

IRS Scandal: Damage is Done

As we learn more about the recent IRS scandal, it appears that it was not limited to low-level employees in Cincinnati.  Top IRS officials in Washington may have known what was going on as far back 2011.  Although the president has promised a full investigation into the matter, much of the damage has already been done.  An alleged criminal who successfully defends himself in court is still sullied by the criminal trial itself.  Likewise, even if the IRS is successful in explaining away some of the accusations of political bias, there are many individual taxpayers who will have already lost faith in the IRS.

When people ask me about interacting with the IRS, I tend to speak very bluntly about the adversarial relationship; that the IRS is not on their side in looking for tax relief and that their one goal is to collect as much money from them as legally possible.  However, I stop short of saying that the IRS will cheat people out of the money they have earned or that they will treat some groups or people differently, even though I know for sure that it’s not out of the question.  No doubt this scandal raises some serious questions for the average taxpayer:

“If high-level IRS administrators will not deal fairly and neutrally with all taxpayers, or will turn a blind eye to bias, then why couldn’t it just as easily (or even more easily) happen with regard to my own individual taxes?” 

“If the IRS will not administer the tax laws fairly and neutrally, then why am I even paying?”