IRS Introduces Mobile App “IRS2Go 2.0″

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If you own a smartphone, chances are you probably use it throughout the day to post, tweet, like, and follow. Maybe your addicted to Words with Friends or Angry Birds. You’re probably NOT ordering tax transcripts or checking on the status of your refund. But according to the IRS, at least 350,000 of you have the app that allows you to engage in said geeky mobile activities. And who knows, that number may have shot up even further after today’s announcement that the IRS is rolling out the updated version of its mobile app “IRS2Go 2.0.”

I don’t know, there’s something about the IRS and technology that reminds me of the time I witnessed my mother trying to communicate with Siri. A little awkward.

~ John Wetenkamp, tax relief attorney

IRS2Go has 7 main features (#4, #5, and #6 are new in version 2.0):

  1. Get Your Refund Status
  2. Get Tax Updates
  3. Follow Us
  4. Watch Us
  5. Get the Latest News
  6. Get My Tax Record
  7. Contact Us

For whatever reason, I’m doubting that 350,000 downloads figure. How many times have you installed a free app only to uninstall it minutes later after discovering you don’t like it? Does the 350,000 include that scenario? It’s not that the IRS doesn’t know technology. It’s not that the app has completely unusable features either. I just can’t imagine very many people would want to be reminded of their tax obligations (or tax problems) 6,000 times a day — each time they glance at their phone. Most people only want to think about the IRS one time per year, and even then they don’t want to have to ponder the thought for too long.

IRS Seeks to Cut Spending with Employee Buyouts

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The National Taxpayer Advocate released its annual report to Congress earlier this week. Their top complaint is that the IRS is severely underfunded, which is causing a number of problems, including an erosion of customer service and a dwindling of taxpayer rights.

One way the IRS is dealing with a smaller budget is by offering early retirements and employee buyouts. This practice really illustrates the IRS’ dilemma. The more seasoned, higher-paid IRS employees are the only ones being offered buyouts because they are the only ones that qualify for early retirement, and the IRS can make a bigger dent in their payroll by shedding tenured employees. So the IRS will be losing some of their best people and filling empty spots with new employees. I know that the TAS is of the opinion that the problems at the IRS are primarily due to them being understaffed, but I have to believe that part of it is due to a large number of new employees who are still learning their job duties.

It seems like a lose-lose situation for the IRS. Under current budget constraints, if they keep their seasoned employees then they can’t afford to hire enough staff. But if they allow them to retire early then they would be, in effect, trading their MVPs for rookies.

Newest Tax Gap Figures are Astounding

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On Friday the IRS released its “tax gap” figures for tax year 2006. The previous measurement was five years earlier in 2001.

The tax gap is the difference between what taxpayers should be paying and what is actually paid.  And while the newest figures may make you choke, they are not too much worse than 2001.

The gross tax gap in 2006: $450 billion.

The gross tax gap in 2001: $345 billion.

What contributes to the tax gap is failing to file, failing to report all income, and simply failing to pay. The biggest contributing factor is the underreporting of income.

A comprehensive explanation of the 2006 tax gap can be found on the IRS website.

Does the IRS Celebrate Christmas?

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IRS employees are given a paid day or two off around Christmastime, so we know that the IRS observes Christmas in that manner.  The US Office of Personnel Management (www.opm.gov) is the official source for federal holidays, and this year, for most federal government agencies, Christmas will be observed on Monday, December 26th.  But what about any other official IRS references to Christmas?

I was curious, so I searched for the term on the IRS website and there were 119 search results.  Here’s what I found:

  1. references to Christmas Island, a territory of Australia in the Indian Ocean
  2. references to the deduction of expenses related to Christmas Tree cultivation in the Farmer’s Tax Guide (Publication 225)
  3. references to an oil industry term (“Christmas Tree“) used to describe “an assembly of valves mounted on the casinghead through which a well is produced”
  4. old references to “Christmas in April” foundations that had lost their non-profit status
  5. references to various business names that include the word “Christmas”
  6. various references to the service’s observation of the federal holiday

So, there are no substantive references or discussions of Christmas on the IRS website.  I suppose that is as it should be.

www.mwattorneys.com

Chris Tucker Sheds Assets to Pay Back IRS

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Chris Tucker, the actor best known for his work in the Rush Hour series of films, has been selling his properties in Florida to pay back what he owes to the IRS.

Mr. Tucker owes $11.5 million in back taxes (perhaps somewhat less now that he has sold off some assets). Reports indicate that he sold his Florida properties for much less than fair market value, which indicates to me that he was in a big hurry to raise some cash under pressure from the IRS.

We don’t have the complete details, but with a $11.5 million tax bill, certainly the IRS has already threatened to seize his property. Why else would he take less than it’s worth? The dilemma for Mr. Tucker is if he had not sold the property, the IRS would have seize it and auctioned it off to the top bidder. A taxpayer can normally get a much better price in a private sale than what can be fetched in a public IRS auction. But the IRS doesn’t allow the taxpayer to put a property on the market and wait until he gets his asking price. Pressure from the IRS usually forces the seller to accept less — in this case, less than fair market value.

www.mwattorneys.com

IRS May have to Make Do with Less in 2012

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In difficult financial times, individuals are forced to take a good hard look at every single expense to make sure it is necessary.  And in the federal government, it’s no different.  Lawmakers are looking across the board at every service, program, committee, and agency.  Expenses that cannot be eliminated will be reduced as much as possible, . . . and rightly so.  Right?

What about expenses that generate revenue?  Should there be an exception?  IRS Commissioner Douglas Shulman believes that not all government expenses are created equal.  He believes that his agency should be treated differently.

The House Appropriations Committee has recently approved proposed legislation that would cut funding to the Internal Revenue Service by $600 million for fiscal year 2012 and Shulman is up in arms about it.  He has some bold words:

[T]hese budget cuts will result in a direct increase to the nation’s deficit.

~ Douglas Shulman, Commissioner of the IRS

Nice soundbite at least.  Here’s what he thinks will happen if we cut funding to the IRS.

  1. reduction in service
  2. reduction in revenue collected
  3. negative impact on voluntary compliance for years to come

As for a potential “reduction in service,” Shulman says that, in some instances (if the budget cuts are approved), it would take 5 months for the IRS to respond to taxpayers’ written inquiries and only half of those telephoning the agency would get through.  Resolution of back taxes would be slowed significantly.  I don’t know, maybe Shulman should welcome these cuts — it would allow his agency to continue providing low quality service, except now they would have a good excuse.  Read Shulman’s full letter here.