It Finally Happened: IRS Won’t Take Cash!
No – not because Obama has so devalued your greenbacks.
It’s just a matter of procedure, you see – one of those great innovations of our time: the electronic payment scheme which the Revenooers just can’t seem to live without.
That’s how Allgreens got whipsawed, anyway, prompting a trip to meet the Revenooers in the Tax Court.
Seems Allgreens is in the medical marijuana business in Colorado. And because of the Federal complexities (i.e.-illegalities) imposed upon medicinal pot companies, notwithstanding permissive local law in their state, some in this business just cannot seem to open bank accounts. Those darned meanie banks have made it impossible for many such businesses to deal through the otherwise accessible banking system.
And that’s the problem – since the rigid IRS insists on payment of payroll taxes via the Electronic Federal Tax Payment System (EFTPS), folks with no bank accounts and who try instead to pay in greenbacks have a little bit of a problem.
So here comes Allgreens, with just this issue, which gets slapped with various penalties for not following the EFTPS regimen, notwithstanding its efforts to pay in cash and stay clean!
“It was not that the taxpayer did not want to make use of the EFTPS,” quoth Allgreens’ attorney Rachel Gillette in the Tax Court petition. “Rather, the taxpayer is unable to secure a bank account due to the nature of its business. With no bank account and no access to banking services, the taxpayer is simply incapable of making” the payments electronically.
So there – another case of an intractable procedure overriding the imposition of a little common sense, in our view.
And while IRS gets assaulted for being unreasonable, here comes the Taxpayer Advocate slamming the blokes for perhaps too often and too loosely trying to assist taxpayers in navigating complications of the tax laws through the publication of “frequently asked questions,” or FAQs.
Advocate Olson recently pointed out that because FAQs don’t rise to the level of “published guidance,” taxpayers may encounter problems as a result, including having to deal with cases of IRS changes to some of its answers without notice to we and thee.
Generally, reliable “published guidance” includes Regulations, Revenue Rulings, Revenue Procedures, Notices and Announcements. Folks can rely on contents. And when IRS wants to change some previously published contents, they do so in a formal way. Not always the case with FAQs.
Another problem is the fact that nobody ever knows who is writing FAQs and answers, because no contact name is listed, which typically is provided in Regulations and other “published guidance” mentioned above.
Some also think the increasing use of FAQs by the Revenooers is indicative of their waning budgets, and lack of resources to prepare and issue the more authoritative forms of “published guidance.”
The message? Caveat emptor – rely on FAQs at your own risk. Putting it another way, you get what you pay for.
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 may be reached at 831-7288, welcomes comments at firstname.lastname@example.org, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.