Football is Here!

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Leave it to a lawyer to find interest in obscure rules . . . yes, even in football.  Official NFL rules require the following:

The home club shall have 36 balls for outdoor games and 24 for indoor games available for testing with a pressure gauge by the referee two hours prior to the starting time of the game to meet with League requirements. Twelve (12) new footballs, sealed in a special box and shipped by the manufacturer, will be opened in the officials’ locker room two hours prior to the starting time of the game. These balls are to be specially marked with the letter “k” and used exclusively for the kicking game.

Tonight I will try to loosen up and have fun instead of wondering about this “special sealed box” and whether  the balls have been properly pressure-tested at 12.5 to 13.5 pounds per square inch.

Seizure of Assets II

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Even if the IRS has identified a “won’t pay” situation, there are a number of steps and procedures that must be followed in order to legally and successfully carry out an IRS seizure. Here are some of the pre-seizure considerations:

  1. Verification of the liability. This includes notifying the taxpayer of the liability and making sure he/she understands why the amount is owed.
  2. Consideration of alternative collection methods. Alternative collection methods include Installment Agreement, Offer in Compromise, Levy, etc. Technically the IRS does not need to attempt these methods, just consider them. However, it is standard practice to actually test them out to see if the liability can be satisfied first without resorting to seizure.
  3. Cost / Benefit analysis. The seizure process is an administrative nightmare; the revenue officer must consider the red tape, time investment, and costs of seizure to see if seizure is really in the government’s best interest.
  4. Prohibited seizures. There are a number of scenarios in which the Revenue Code prohibits seizure, such as a seizure conducted on the day the taxpayer has to appear in response to a summons, or seizure of property with insufficient equity to apply to the back tax liability.
IRM 5.10.1

Seizure of Assets

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Our tax relief clients often ask us if they should be worried about the IRS taking their home or other valuable assets.  We have to be careful about the way we answer this question because the IRS certainly has the power and authority to seize assets; they do it all the time.  However, we can often predict the likelihood of seizure based on the taxpayer’s individual circumstances.

For instance, seizures will generally not be conducted where taxpayers “will pay” or “can’t pay.”  The “will pay” situation is typically one in which the taxpayer is making preparations to pay, either by selling assets, obtaining a loan, or negotiating an installment agreement with the IRS.  If the taxpayer is “Currently Not Collectible” or is in the Offer in Compromise process, then these are considered “can’t pay” situations.

On the other hand, seizures will be considered where taxpayers “won’t pay.”  This is the category of taxpayers who repeatedly refuse to file tax returns and who keep piling up tax balances year after year.  It also includes those who rely on frivolous tax arguments or who refuse to cooperate with the IRS.  IRM 5.10.1.6.

Quote of the Day

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I don’t know if I have ever shared a favorite quote.  But today I came across a little jewel that I just have to post.  The author is a Forbes contributor, Peter J. Reilly.  He says that his clients should not try to anthropomorphize the IRS (i.e., give them a human face):

IRS does not execute its mission in a holistic manner such that you are dealing with a thinking being.  If the IRS is some sort of being, it is not that its left hand doesn’t know what its right hand is doing.  Its left hand is only vaguely aware that its right hand exists.

Florida’s New Anti-Saggy-Pants Law

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Florida has a new law that prohibits wearing saggy pants at school.  The bill’s primary proponent, Senator Gary Siplin, handed out belts to students today as a reminder to keep their pants cinched up.  Arkansas has similar legislation.  See full story on Reuters.  Siplin wants to encourage students to dress more professionally so they are on the right track come time for interviews following graduation.  In related news, Green Day’s Billie Joe Armstrong was recently kicked off a Southwest Airlines flight for sagging.

Go Hit a Wiffle Ball Today

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There are so many great things about Wiffle Balls.

  • My kids can’t hit them as far as a hard ball.
  • They don’t break windows.
  • It’s the only way I am able to throw a curve.
  • They’re made exclusively in Shelton, Connecticut

Check out this nice Labor Day story on NPR.

Heightened Enforcement of 1099 Compliance

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Politicians are desperately trying to increase revenue without raising taxes.  One way to do this is to beef up enforcement of the tax laws already on the books.  According to the IRS, the best place to focus these efforts is on small businesses and their tax obligations, specifically their 1099 reporting requirements.  The IRS has always had a more difficult time getting money out of the self-employed.

IRS Commissioner, Doug Shulman, recently told a Congressional committee: “the thing you have to remember about the [tax] gap is it’s like a deep shale oil reserve, it’s not money sitting there that’s easily tapped, in many ways we have tapped the easy money… the real answer, the place where we have leverage, is information reporting.”

What this means for the regular taxpayer is that the IRS is going to be furiously ramping up its collection efforts in the coming months.  The government seems eager to pour more money into the IRS.  According to Commissioner Shulman, each 1 percent improvement in compliance will produce an added $20 billion in revenues.  For more details, click here.

Santa has his Naughty List; IRS has PDT Designation

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Given the number of contacts the IRS makes with taxpayers day after day, the number of (how shall we say this) “confrontations” is relatively small. Yet there are always those who hope they can find tax relief through nefarious means, including the use of force. And the IRS has fairly elaborate guidelines for handling situations involving dangerous or aggressive taxpayers, including a special PDT (Potentially Dangerous Taxpayer) classification that may be assigned to an account. See IRM 25.4.1.

IRS field officers are instructed to try to avoid in-person contact with PDTs. But if in-person visits are necessary, then they are supposed to arrange armed escort from TIGTA personnel. Regular Revenue Officers are prohibited from carrying firearms or any other weapons, including pepper spray (IRM 5.1.3.2.1 ).

If the act(s) or behavior(s) in question do not rise to the level of “dangerous,” then there is an intermediate designation known as “CAU” (Caution Upon Contact) with its own set of criteria and procedure.

The burden of an IRS tax debt can be stressful, discouraging, even overwhelming.  However, resorting to threats or violence is never acceptable. Contact Montgomery & Wetenkamp, and let us demonstrate how the pen is mightier than the sword in getting you the tax relief that you deserve.

State Bar Publication for Teenagers

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The California State Bar recently updated its publication entitled When You Turn 18: A Survival Guide for Teenagers.  It’s a 16-page publication covering a wide range of legal topics pertinent to teenagers and those who are moving beyond the age of minority.  The last time the guide was updated was in 2008.  The new version covers some timely topics such as underage drinking, illegal computer downloads, identity theft, sexting, and employer monitoring of emails.

The State Bar plans to release the guide in mid September.  If you think your teenager would benefit from a careful study of this guide, simply send an email to 18@calbar.ca.gov and specify how many copies you want and where you want them sent.  The guides and the shipping are free.  What’s not free is being a good parent; the cost is your time, dedication, and love.  So work through the guide together, asking and answering questions as you go.

IRS Mission Statements

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The last time I checked, there was no tax relief division of the IRS.  But the way their mission statements are worded so warm and fuzzy, one might be tempted to think otherwise.  The two primary divisions most taxpayers interact with fall under the Services and Enforcement arm of the IRS:

Wage & Investment Division

The mission of the Wage & Investment Division of the IRS is “to provide top quality service by helping taxpayers understand and comply with applicable tax laws and to protect the public interest by applying the tax law with integrity and fairness to all.”

Small Business / Self-Employed Division

The mission of the Small Business/Self-Employed (SB/SE) Division is “to provide SB/SE customers top-quality service by educating and informing them of their tax obligations, developing educational products and services, and helping them understand and comply with applicable laws, and to protect the public interest by applying the tax law with integrity and fairness to all.”

Note the verbs in these statements.  The IRS is supposed to “help,” “protect,” “educate,” and “inform.”  In my interactions with the IRS over the years, I do not get the sense that they are doing a satisfactory job of meeting these standards.  But it’s an unfair standard to hold them to when, in fact, their true mission is to COLLECT REVENUE.