The $10,000 IRS "The Apprentice" Parody

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Apparently it’s that time again.  That time when we poke fun at the IRS for idiotic mistakes, bad judgment, unfair rules, . . . horrendous training videos.  It has already become a regular topic for many writers and bloggers, but just how regular and how idiotic is up to the IRS.

Well, to be fair, the latest IRS training video, a spoof on Donald Trump’s reality show “The Apprentice,” was produced in 2011, around the same time as the now famous Gilligan’s Island and Star Trek videos.  So to say that the IRS is in total control of the negative press isn’t completely true; they’re still dealing with repercussions from the mistakes of a prior era, as they put it.  They claim to have a shorter chain on management and those that would have approved the ridiculous videos now.  Hopefully by now they have learned their lesson and are going to stick to things they are good at like bank levies and wage garnishment.

The Apprentice parody ranks right up there with the worst ever made.  I cannot for life of me imagine how it cost the IRS $10,000 to produce such utter garbage.  It was obviously filmed in one take, so even if they had to rent out the conference room to get just the right lighting and feel, it could not have been for more than a few hours.  They saved money on props by making some of them by hand and bringing others from home.  They saved money on wardrobe by wearing their own suits.  They even scrimped on the wig worn by the guy playing the part of “The Donald” — it was completely wrong.  Way too thick and way too dark.  And if they paid more than $100 to whoever was responsible for writing that train wreck of a script, then they got hustled.  One thing is for sure: these are 100% legitimate IRS amateurs, not paid actors, because they are horrible.

It’s pretty obvious that I derive a certain amount of selfish joy from critiquing IRS videos, but my primary reason for doing it is to help expose the underlying problem of waste.  This exposure has been difficult for the IRS.  Public relations are not the best right now.  I hope they have learned their lesson.

 

Did Lerner Mishandle Official Emails?

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These days I think few employers would have a problem with their employees using a company email account for personal matters.  As long as they are not goofing off while on the clock, it doesn’t cost the employer anything.  Although I am sure it is often listed as a prohibited activity in employee handbooks, I do not imagine it to be the type of rule that is strictly enforced.

But using a personal email account for business purposes is a bigger problem.  It would be unprofessional to send an official email from a personal account or to accept business emails on a personal account.  Sending internal documents from work to your own personal email account is an even bigger problem.  The House Oversight and Government Reform Committee apparently has been informed that Lois Lerner did just this.

Lois Lerner is the lady at the center of the IRS Tea Party targeting scandal.  She was thrust into the spotlight back in May when she invoked her 5th Amendment rights, refusing to testify before Congress.  Presently, the Committee is asking Lerner to produce “all documents and communications housed in [her] msn.com account.”  She has until August 27th to comply, after which I would imagine she will be subpoenaed, after which I imagine her lawyers will dispute it as being overbroad.

What makes this behavior especially repugnant is that THIS IS THE IRS we’re talking about, not a private company!  This is a branch of the US Treasury that we trust will be able to play fairly and keep information safe and secure.  Let’s hope we find out that Lerner was actually only emailing herself an innocent meme or something…

Lawmakers Seek to Punish IRS and Reward TIGTA

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A House subcommittee led by Rep. Ander Crenshaw (R-Fla.) agreed on a spending measure that would cut the IRS’ budget by 24 percent in 2014.  And on the other side of the coin, the bill would mean a $5.5 million budget increase for TIGTA (Treasury Inspector General for Tax Administration), the agency that has brought to light so many of the recent IRS missteps.

The bill is meant to “crack down,” “clean house,” and otherwise encourage the agency to be more careful and responsible in its administration of the tax laws.  It would also specifically address most of the problems we have read about in the news these last several months:

  • political targeting
  • training videos
  • lavish conferences
  • employee bonuses

Basically it would withhold funding until the IRS implements TIGTA recommendations.  TIGTA’s primary responsibility is to keep an eye on the activities and procedures at the Internal Revenue Service.  They are continually conducting audits, reporting on their results, and offering “recommendations” to the IRS when it is shown that they have fallen short.  Well, lawmakers are now hoping to make certain recommendations mandatory — mandatory in the sense that if they don’t make the changes then they won’t get full funding.

But the bill still has a long ways to go: first to the full Appropriations Committee, then to the House floor, then on to the Democrat-controlled Senate where it will face plenty of opposition.

Another IRS Mistake: Thousands of Social Security Numbers Exposed on Internet

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This time the IRS leaked thousands of social security numbers on its 527 “non-profit political groups” website.  The security lapse was brought to light by Public.Resource.org.

It is unclear how many SSNs were exposed and whether or not the SSNs were displayed alongside any other identifying information.  I think this would be an important detail.  I’m not sure what exactly is needed to perpetrate an identity theft or a financial crime using a SSN, but it seems to me that more would be needed than simply the SSN.  I would think that a criminal would need at least the name that goes with it too.

Furthermore, it looks like this information probably did not fall into the hands of any criminals.  The data remained up on the site for less than 24 hours, and during that time (if I understand the geek speak) there were only 8 total clicks on the page in question and no actual privacy complaints.

Still, as with all the other recent IRS blunders, what bothers most taxpayers is the fact that the mistake was made, not the end result or the damage that was done.  Think of how many visitors irs.gov gets each day.  Popularity-wise we don’t like it, but traffic-wise, it is one of the most visited websites in the country.  It just so happened that the SSNs were exposed in a little obscure corner of a massive, content-rich IRS website.  It is easy to see how this was a close call and could have been a much more serious mistake.  When it comes to our personal identifying information and our financial information, we don’t like close calls.  A close call just means that there could easily be a “next time” and next time we might not be so lucky.

Fixing the IRS: Where do we Start?

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It’s no secret that the IRS makes mistakes, sometimes serious mistakes.  It may have been secret before (at least for the average taxpaying citizen) regardless of the Treasury Inspector General for Tax Administration (TIGTA) reports that highlight the agency’s deficiencies.  But in recent months the IRS has been under intense media scrutiny, bringing these reports out into the open in mainstream media outlets.

The problems at the IRS are the result of:

  • ineffective training
  • weak leadership
  • poor judgment
  • inexperienced employees
  • an overly-complex tax code
  • simple human error
  • insufficient funding

This is by no means a comprehensive list.  And it’s easy to lump them all together and imagine one comprehensive solution.  There are some who think all the problems can be fixed by increasing funding to the IRS.  They see this as the root of all employee development, training, and managerial issues.  This is perhaps the primary argument of IRS sympathizers; however, I’m not so sure there is an all-in-one solution for cleaning up at the IRS.

To use a recent example, why don’t IRS Revenue Officers (RO) always follow legal guidelines when seizing taxpayer property to cover unpaid taxes?  This is probably the most serious collection action that the IRS can take.  And besides going to prison, this is what taxpayers fear more than anything.  So, why do they get it wrong sometimes?  We can probably rule out “complex tax code” because the procedures for seizure of property are clearly laid out in the Internal Revenue Manual (IRM) so an RO has only to follow the steps.  But any of the other listed reasons could realistically apply.

Although I think it is impossible to narrow it down to one root problem, it is clear that there is quite a bit of overlap.  For example, an inexperienced employee is more likely to make simple human errors and use poor judgment in his work.  And lack of/ineffective training is a symptom of poor leadership.  This overlap is a good thing when contemplating solutions because it means that addressing one issue will automatically improve another.  It also means that once we get started on the task of fixing the IRS, we’ll already be closer to our goal than we think.

IRS Funding: Seems Adequate to Me

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Some say the biggest problem at the IRS is that they are not allocated enough money to be able to administer the tax laws fairly and competently.  Even Nina Olson, the National Taxpayer Advocate, has bought into this theory:

Today, the IRS is an institution in crisis. In my view, however, the real crisis is not the one generating headlines. The real crisis facing the IRS — and therefore taxpayers — is a radically transformed mission coupled with inadequate funding to accomplish that mission. As a consequence of this crisis, the IRS gives limited consideration to taxpayer rights or fundamental tax administration principles as it struggles to get its job done.

~ Nina Olson, in her mid-year report to Congress

What’s ironic about this quote is it was released today along side juicy headlines about IRS employees using government credit cards to make some highly questionable purchases of alcohol, expensive meals, party supplies, and even porn.  Of course many of these purchases were made on cards that were reported stolen.  I’m sure that’s true because there is no way any IRS employee would abuse his card privileges.

I don’t know Nina, I usually agree with your opinions, but it seems to me that the crisis is fairly well summarized by the headlines.  Why downplay the high-profile mistakes that are so very telling of what’s going on at the IRS?  And how is it that the IRS’ mission has been “radically transformed”?  Regardless of any official mission statements, their mission has always been, and always will be, to collect as much revenue as possible without too much regard to fairness, tax relief, and taxpayer rights.

So if the “real crisis” is inadequate funding, then why should we turn a blind eye to outrageous spending abuse?  There is no way in this world we should increase funding to the IRS until they clean house.

Miller and Lerner Received Credible Threats

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There are many reasons why you should never threaten an IRS worker besides the fact that it is just not nice.  You could be blacklisted by the IRS or placed on their Potentially Dangerous Taxpayer (PDT) list.  Or, if the threat is serious enough, you could be prosecuted for an “attempt” crime like the Alaskan, Lonnie Vernon, who was recently sentenced to over 25 years imprisonment for conspiracy to kill an IRS Revenue Officer.

The IRS is abundantly aware of the risk involved in collecting taxes, especially when enforced collection actions, such as bank levies and wage garnishments, are employed.  IRS personnel have protocol for handling potentially dangerous situations and there are procedures (many carried out by TIGTA) in place to help protect IRS employees who have to work in these conditions.  Most often, the IRS employees who are subject to threats and dangerous situations are the Revenue Officers who work on the front lines and have direct personal contact with taxpayers.  However, we are currently hearing about threats directed at high-level IRS officials based on their supposed responsibility for the shortcomings associated with the IRS scandal.

Both Steven Miller (former acting IRS Commissioner who was fired by President Obama on May 15th) and Lois Lerner (head of the IRS tax exempt unit who has placed the blame on folks in Cincinnati) have been intimidated by threats of physical violence according to their attorneys and others who are close to them.  This is not normal.  Even the person holding the top job at the IRS, the Commissioner, typically has required very little by way of security over the years.  Maybe this will have to change.

Is IRS Ready for Obamacare Amid Turmoil?

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The IRS was selected as one of the main agencies to implement President Obama’s new health care law.  Many of the provisions will go into effect next year.  But it is difficult to see how the IRS will be able to get all its ducks in a row amid the tax exempt applications scandal, congressional scrutiny of overspending, and various leadership changes.  All this turmoil seems to have come at a time when the IRS will be needed most.

There were more than 40 tax code changes associated with the Affordable Care Act, many of which are still being hammered out.  Here are some of the tasks that the IRS faces in the coming months:

  • collect tax penalties from individuals who fail to obtain insurance and employers who fail to provide it
  • define key terms in the law such as “minimum value,” and “minimum essential coverage”
  • issue guidance on new forms

Will the IRS be ready, or will they try to request an extension?

IRS Scandal: Damage is Done

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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?”