IRS Dirty Tricks

[Snaggletooth]

IRS has dozens of "dirty tricks." I would like for others to share on this discussion thread their own knowledge and encounters with IRS which are below the belt. One of them has already been thoroughly discussed so I will present it again and then add another.

1. IRS personnel are under the gun in the first four months of the year. Most of their personnel are overworked, under-resourced, and must schedule an extremely seasonal workload. However, in spite of this, their examination people instead of helping spread this workload around do what? That's right! Auditing people like crazy! Wouldn't this make sense to contribute to the manpower shortage and then spend the "off-season" conducting their audits?? But NO. some 80% of MY audits are scheduled during tax season. Armando says virtually the same thing, but doesn't give a percentage. There can be only one obvious conclusion to this lunacy: They want to schedule audits when tax professionals are not available - and get as many sucker taxpayers to show up without their preparers as they can!!

2. Audit notices, deficiency notices, adjustment notices, etc. You've seen hundreds of them. However, IRS is required to send these notices to the last known address, meaning the taxpayer will not receive them if he has moved beyond the timeframe for postal forwarding. But after the assessment occurs and the taxpayer is beyond the protest period, things change abruptly. IRS will track this guy down in the middle of Nevada, North Dakota, or even Saskatchewan. Levy his account, garnishee him, etc. and the taxpayer has never had the opportunity to protest the deficiency or otherwise work it out. They do not accept as fair CLEAR PROOF that the taxpayer has never been notified. (By the way, as tax preparers we should file Form 8822 - Change of Address - on every change of mailing address for our clients)

Any more?

[S T]

Audits During Tax Time

I agree with filing the change of address form, and try to do that on a regular basis, but sometimes overlook one. However, IRS states that they update their address file when they receive the next filed return from the taxpayer. Also the US Post Office notifies the IRS weekly with Change of Addresses requests.

As far as audits scheduled during Jan - April, not that I do that many audits, but the few notices that I have received, I have had very good luck in having the auditor schedule at my convenience, once the power of attorney has been filed.

First thing I do when the client calls to advise of the audit, is to immediately call the office number listed and advise the appointment clerk a POA will be forthcoming and that the appointment date will have to be rescheduled.

Sandy

[JON]

I must be lucky...

IRS notices are mostly computer related and timing always seems bad, but never more in tax season then out.

Whatever auditing has happenned in past years is going to double now, but I have never had problems with IRS and have had audits rescheduled to post tax season when requested.

I must be lucky. The IRS must be a lot nicer here....

[Armando Beaujolais]

One of the statements on the audit letter is that rescheduling because your tax preparer is not available is not a valid reason.

From personal experience and from speaking with other folks, I'd say over half of audits come during tax season. From some of the ridiculous things I've seen when taxpayers go down there by themselves, I can see why IRS agents would rather deal with an uninformed, vulnerable taxpayer instead of someone who has the ability to stand up to them.

From discussions with clients who went to audits without representation, probably the most absurd was the agent who refused to allow a business deduction for the taxpayer's fax machine. The agent said it was personal use.

The agent who said the mom paid over 1/2 of her own support when the mom got $3,000 a year from Social Security. You see, the old dad had $7,000 in Social Security, and he had money left over from supporting himself to help support the old mom. Right. Fortunately I stepped in as representative before the daughter got rolled. We'd taken the mom and not the dad as dependents, trying to go with the letter of the law. You guessed it, the agent was also asking for prior year returns. Why are they hammering people like this? It's because they're easy pickins.

The auditor who told the taxpayer it was necessary to have a receipt AND a cancelled check or deductions would not be allowed.

This is not to impugn revenue agents personally. Most are good people and are just trying to do their job. However, it's a sure thing that revenue agents take an adversarial perspective with their approach to taxpayers. Representatives need to understand that and respond accordingly.