Can the IRS be Friendlier and More Efficient at the Same Time?
The Treasury has been working on stepping up its exam and collections efforts. As a result the IRS appears to be moving back its pre-Revenue Restructuring Act (RRA) of 1998 posture, which was enacted as a result of numerous IRS abuses. Yet, the IRS is still bound by the RRA. Are we asking too much of the IRS to be more efficient and friendlier at the same time? Is that possible? If so, how?
The short answers are that we are not asking too much and it is possible. Now, for the most part, IRS personnel are friendly. However, all that means is that they are a little more polite and they may even smile when they make false statements (citing notes of conversations that did not occur), make intentionally deceptive statements (purporting to state the law by reading a document aloud while intentionally skipping over the part that is helpful for clients, implying that the part that was read was all there was – even though the listener had copy of the exact same document in front of them), and flat out stating that they will not consider a taxpayers case (even though the internal revenue code, treasury regulations, and the internal revenue manual require that they do so).
I often encounter honest and fair IRS personnel that carry out their duties with the utmost integrity. But I have also encountered an increasing number of abusive IRS employees as of late. The increasing frequency of these encounters is probably a result of the Bush administration giving the IRS the go-ahead to ramp up its exam and collection efforts, an action which probably stirred up anti-taxpayer sentiment in the IRS that was previously dormant.
Regardless of the cause, I have been getting the impression that taxpayers' are becoming more and more frustrated by the IRS. In fact, anti-IRS sentiment seems to have been increasing so much as of late that many taxpayers have begun talking about taking alternative actions against IRS personnel, such as bringing various types of civil suits against IRS personnel and even taking steps to harm IRS personnel financially. For example there seems to be an increasing number of taxpayers who are filing frivolous liens and financing statements against IRS personnel. We saw this recently in US v. Stouder II, which involved a taxpayer who filed financing statements against two IRS employees in the amount of $300 million, in an effort to harm the IRS employees' personal credit rating. The federal court declared the financing statements void; however, the IRS employees credit rating was probably harmed. The taxpayer probably achieved his aim.
I feel caught in the middle. Of course I would never counsel a taxpayer to file a frivolous or fraudulent document or case, nor would any other tax attorney that I know. It is wrong. Taxpayers who file such cases should be subject to sanctions. However, taxpayers should have some more effective means of redressing grievances against abusive IRS personnel. We already have laws on the books that deal with these types of acts, yet this cat-and-mouse game continues. This game harms the IRS's image, it hinders the collections of tax revenues, and it is a wasteful use of limited resources.
If there is to be some improvement it must start with the IRS. The IRS must admit that there is a problem. IRS personnel at the highest and lowest levels must begin to discover and weed out abusive employees. Moreover, the IRS must begin to recruit and retain fair and honest employees. Of course this would probably entail paying higher wages and seeking higher qualified employees. These steps should be taken before the IRS increases its collections activities; otherwise we will see more and more IRS abuses and taxpayers pursuing alternative remedies – a tit for tat scenario similar to the one that prompted Congress to enact the friendlier-IRS RRA. In the end, honest taxpayers are the ones that are harmed by this game. Why should honest taxpayers be subject to an increasing frequency of IRS abuses (which may very well be a response to previous abusive actions by other taxpayers)? At this point it is not likely that the IRS is going to change voluntarily, so Congress should preemptively act to halt this wasteful game.
The short answers are that we are not asking too much and it is possible. Now, for the most part, IRS personnel are friendly. However, all that means is that they are a little more polite and they may even smile when they make false statements (citing notes of conversations that did not occur), make intentionally deceptive statements (purporting to state the law by reading a document aloud while intentionally skipping over the part that is helpful for clients, implying that the part that was read was all there was – even though the listener had copy of the exact same document in front of them), and flat out stating that they will not consider a taxpayers case (even though the internal revenue code, treasury regulations, and the internal revenue manual require that they do so).
I often encounter honest and fair IRS personnel that carry out their duties with the utmost integrity. But I have also encountered an increasing number of abusive IRS employees as of late. The increasing frequency of these encounters is probably a result of the Bush administration giving the IRS the go-ahead to ramp up its exam and collection efforts, an action which probably stirred up anti-taxpayer sentiment in the IRS that was previously dormant.
Regardless of the cause, I have been getting the impression that taxpayers' are becoming more and more frustrated by the IRS. In fact, anti-IRS sentiment seems to have been increasing so much as of late that many taxpayers have begun talking about taking alternative actions against IRS personnel, such as bringing various types of civil suits against IRS personnel and even taking steps to harm IRS personnel financially. For example there seems to be an increasing number of taxpayers who are filing frivolous liens and financing statements against IRS personnel. We saw this recently in US v. Stouder II, which involved a taxpayer who filed financing statements against two IRS employees in the amount of $300 million, in an effort to harm the IRS employees' personal credit rating. The federal court declared the financing statements void; however, the IRS employees credit rating was probably harmed. The taxpayer probably achieved his aim.
I feel caught in the middle. Of course I would never counsel a taxpayer to file a frivolous or fraudulent document or case, nor would any other tax attorney that I know. It is wrong. Taxpayers who file such cases should be subject to sanctions. However, taxpayers should have some more effective means of redressing grievances against abusive IRS personnel. We already have laws on the books that deal with these types of acts, yet this cat-and-mouse game continues. This game harms the IRS's image, it hinders the collections of tax revenues, and it is a wasteful use of limited resources.
If there is to be some improvement it must start with the IRS. The IRS must admit that there is a problem. IRS personnel at the highest and lowest levels must begin to discover and weed out abusive employees. Moreover, the IRS must begin to recruit and retain fair and honest employees. Of course this would probably entail paying higher wages and seeking higher qualified employees. These steps should be taken before the IRS increases its collections activities; otherwise we will see more and more IRS abuses and taxpayers pursuing alternative remedies – a tit for tat scenario similar to the one that prompted Congress to enact the friendlier-IRS RRA. In the end, honest taxpayers are the ones that are harmed by this game. Why should honest taxpayers be subject to an increasing frequency of IRS abuses (which may very well be a response to previous abusive actions by other taxpayers)? At this point it is not likely that the IRS is going to change voluntarily, so Congress should preemptively act to halt this wasteful game.
 
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