Future IRS tactics

[Nashville]

Notice the "bailouts" don't stop. No one is accountable for their mismanagement, no one has to pay their house mortgage, no one has to deal with anything as one special interest group after another lines up for the Federal dole. The U S Treasury shows up as a loving, caring Santa Claus to prop up everyone's need for money.

From where I sit, there appears to be no limit to the amount of money the politicians are willing to promise away so that no segment of the economy has to suffer. The Federal Reserve can't go up on interest rates because that will kill the economy too. In fact there have been recent slashes downward, and stocks rebound from these only temporarily before slumping again. So the dollar weakens, and/or the order to simply "print" money will be given. If they were to raise interest rates, the U S Treasury could not even afford to pay the extra interest.

After promising away so much money, what kind of pressure is going to be placed on the IRS to collect? Is this "loving, caring" Treasury going to manifest itself as the much-discussed "kinder, gentler" IRS?

I doubt it. I expect quicker action by the IRS, more gestapo-like tactics, and more unfavorable court cases. More pressure on preparers to become auditors. Plus higher taxes if Mr. Obama does all of the things he wants to do. Add to this more last-minute tax legislation around Christmastime every year from Congress to try and tweak the latest Treasury problem, or mollify congressmen who want special tax concessions in trade for their vote on unrelated legislation.

Will these increased collection efforts compensate for the $1 trillion the govt has promised to bail out this sick economy? No, it will hardly make a dent. But a more aggressive IRS will be lurking out there for us to deal with.

[Lion]

Kinder, Gentler

I've watched the kinder, gentler IRS disappear almost as quickly as it appeared. This year, I've had bad attitudes from most IRS employees, deprecating clients who were right as well as those who were wrong but confused, not treacherous. I agree that the IRS has already been put on notice to collect, collect, collect. They're getting mean. And, all these regulations putting more "enforcement" on us preparers who are supposed to be our clients' advocates -- don't get me started...

[MLINDER42]

Irs Tactics

I have already seen way more CP 2000 coming to my clients. I also have done way more prior year returns do to IRS pressure.I have also had more new clients with letters of impending wage attachment than any time before. It is taking more time for them to process written answers and to receive replies back. But also made a lot more money this off season.

[DaveO]

Audits, Audits and more Audits

I've had more in the last 2 years than in the previous 10 years. I finally had to dedicate a file drawer to Form 2848. We are seeing a CP2000 or some other inquiry at least 2 or 3 times a month. Virtually all are wrong to some degree and most are completely wrong. In most cases a human looking at the return would have understood and not issued the notice. There seems to be no minimal standard of care in place at the IRS at all.

It seems they are employing a "throw it on the wall and see what sticks" approace to collection. At least our jobs are more secure than most.

[Burke]

At least our jobs are more secure than most.

Yup. I don't think any of us are going to see a reduction in clients or income.

[joanmcq]

yes, audits are going WAY up. I don't fault the IRS. They are between a rock & a hard place, since the budget deficits have been blamed on the 'tax gap' and not on the tax cuts or overspending.

[Nashville]

Tax Gap

Joan Mc, the so-called "tax gap" is very substantial, but is too often the target of politicians to take the blame off themselves for their own deficits.

From what I've seen, IRS is dealing with this "tax gap" by sending out more and more CP2000s, and electronic examinations for alleged underreporting. This only deals with people who are trying to file returns. The tax gap could be better closed by them getting off their butts and going out into the field and doing real audits. It would also stop people from taking their tax preparation business to "Shifty-eyed Sam" across town.

I haven't seen any of this out of the IRS, folks. Maybe it is coming.

[joanmcq]

Oh, I know the tax gap is real. I rep DIY returns, remember? I know what kind of crap is being filed. But you are right in that a lot of returns aren't filed. I also visit tax protester sites just for the laugh value. I have friends that I know don't report their cash income; and some of them have substantial cash income. No, I don't do their returns.

But also, since unlike a lot of you who don't deal with the IRS every day, (not to mention all the states) I've seen the change in focus and the increase of audits and increase in the assessment of penalties. Just this year they started assessing the accuracy related penalty for "repeat offenders"; people who have the same issue two or more years in a row, regardless of the amount of tax due, whereas they didn't use to bother with it until the tax due was at least $5k. And this stuff started just after the big brouhaha started being made of the tax gap to take the pressure off the media attention on deficit spending.