IRS Provides Laugh a Minute

At least the “Treasury Inspector General for Tax Administration” (TIGTA) has a sense of humor.  How else could he have come up with some of the self-serving drivel contained within  his December 30, 2010 report to IRS Commissioner for the Small Business/Self-Employed Division (SB/SE)?

IRS, you see, attributes some $148 billion (43 percent) of the tax gap to unreported income earned by unincorporated businesses, and the related unpaid self-employment tax.  So according to TIGTA, it’s necessary “to improve service to make voluntary compliance easier.”  His recent audit, therefore, “was initiated to determine whether the services provided by the SB/SE Division to its customers (that’s you – Ed.) will assist the IRS in achieving its customer service goals.”

Right.

So get out the crying towel when you hear TIGTA say, f’rinstance, “Outreach to small business taxpayers presents certain difficulties.  These taxpayers may not be members of trade organizations that provide their members education and services.  Moreover, rather than having an ongoing relationship with a tax practitioner (translation – a cop, in the view of the IRS, whose job it is to policy that small business tax accounting and reporting practices – Ed.) throughout the year, small business taxpayers may prepare their own tax returns or visit their tax practitioners only once a year to obtain assistance in filing their tax returns.”

And really be skeptical when you hear TIGTA say, with reference to “organizations that partner” with SB/SE (such as the American Institute of CPAs) that “IRS e-services and toll-free telephone lines are vital service channels to tax practitioners.”

The fact is, efforts to ever make telephone contact with a human being within the bowels of IRS is almost always a colossal waste of time.  Rarely, for one, can a practitioner every determine a direct phone line to someone who might help them out.  Another shining example of IRS “service” is the occasional provision of  a telephone number in some written communication or other, which leads to some IRS “servant” who never heard of the party who ostensibly owns the phone number in question!   This does happen – more often than not, in our experience!

So it’s real hard for us to shed a tear when we hear (TIGTA say) that “One of the difficulties the IRS faces in measuring its customer service (e.g., to determine customer service’s effect on voluntary compliance) is its ability to follow up on the compliance of the taxpayers.”

Not to mention the fact that the presumption, here, is that “service” is actually being delivered by IRS – a questionable assumption at best.

How did we ever get along without all of this “outreach” and “service?”

CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters.  You should consult your CPA regarding the implications to your own particular situation.

Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno.  He can be reached at 775-831-7288, welcomes comments below,  at jquinn@ashleyquinncpas.com, and invites readers to consider other commentary at www.taxlawtips.com.