Fellow CPA and tax blogger Monica Lawver writes about the wackiness of some IRS agents:
Seems the news is flooded these days with stories of IRS agents and their various shenanigans.
I hope stories like these convince people with IRS trouble to seek the help of a qualified tax professional! In a perfect world, the system would be fair, and people could deal effectively with the IRS on their own.
But we do not live in a perfect world, the IRS system is not fair, and so taxpayers are in much better shape if they hire a qualified professional to manage the process.
To read these harrowing stories check out Monica’s blog post titled Yet Another Scary IRS Agent Story.
I agree with Monica that the IRS often does not play fair.
In my experience some IRS agents (the collection agents, especially) act differently when they are dealing directly with a taxpayer than they do when they are dealing with an experienced tax pro.
There is no ethical excuse for this disparity, but it’s understandable why IRS collection agents do it.
The goal of the IRS collection agent is to get paid. Consequently, if he can make the taxpayer fearful enough it might increase the likelihood that payment will be made in full.
More than a few taxpayers have told me that an IRS agent told them that if they didn’t pay a delinquent tax debt, the IRS would throw them in jail.
I have never had an IRS agent make this kind of a threat to me because he knows it’s a lie and he knows that I know it’s a lie.
It is not a crime to be unable to pay your taxes.
These unethical IRS agents, when confronted with their unlawful threats, deny that they ever said them. And since it’s the agent’s word against the delinquent taxpayer’s word, there isn’t much that can be done about it.
For a few of my own haunting tax yarns read my blog post titled Horrifying Tax Tales.
And for a story about an IRS agent who tried to get my client to fire me and my subsequent efforts (ongoing) to get that agent terminated, read my blog post titled The Tax Lawyer’s Letter to IRS Commissioner Doug Shulman on IRS’s Abuse of Taxpayer Right to Counsel.
8 responses so far ↓
1 Monica Lawver // Aug 8, 2009 at 1:30 pm
Thanks for the mention. I used to have such faith in “the system,” being a generally trusting and optimistic person. Alas, time and experience have made me cynical! But I like to think knowing how the world really works enables me to be a much more effective advocate for my clients.
2 Peter // Aug 8, 2009 at 3:49 pm
Monica,
George Bernard Shaw said,
“The power of accurate observation is called cynicism by those who don’t have it.”
You have it!
3 John Doe // Dec 15, 2009 at 12:02 pm
The IRS assessed me with over $400K in trust fund taxes and penalties for not signing a check to the IRS for taxes due when in fact the company’s checking account was overdrawn by over $200K! As “Controller” (in name only) I would have committed a felony to execute a check for the company to the IRS. This company was undercapitalized and insolvent from the outset and the President and General Manager insisted on approving ALL expenditures before a check was written, signed and mailed. He (the President) was a Law School dropout but had learned enough to pass the liability on to others. My wife had breast cancer during this time and I had to have a job regardless of the risk in order to provide for her medical care. I owned no stock and was not on the board of directors; all of this was in the President’s name. The IRS would never even allow me an appeal and I have a letter that refers to the ruling on “my appeal” which never happened! Anyone out there have any experience like this? dgm
4 Peter // Dec 15, 2009 at 7:18 pm
John,
Before the IRS assesses a trust fund penalty against a taxpayer it must first send that employee a letter stating that it’s proposal to assess the penalty and giving the taxpayer 60 days to file a written protest of the proposed assessment.
Even if you failed to respond to the 60 day notice, there are some other ways to protest the penalty even at this late date. But if you signed checks and generally made decisions about which of the company’s creditors got paid and which of them did not, you probably won’t win. If you signed checks on someone else’s orders and can prove it you might have an outside shot of prevailing but you’ll have to show that you did believed the payroll deposits were being made or were going to be made.
As for the President of the company, if you believe this is his liability and he intentionally left you on the hook you can sue him in civil court.
5 IRS Uses Fear to Force Compliance // Mar 25, 2010 at 9:33 am
[...] IRS Horror Stories [...]
6 Peter J. H. Walker // Jun 21, 2010 at 9:17 pm
I am a 78 years old who is suffering from partial renal failure. The IRS levied my Social Security Benefit of $761.00 per month, which is my only source of regular income. Senator Harry Reid, whom I have supported for 25 years in every election he ran for office, ignored my urgent plea for help. WHO IS WORSE: The IRS or Senator (hopefully soon to be FORMER Senator) Harry Reid? At least the IRS has the excuse that it is just doing its job. Did Senator Reid do his?
7 Peter // Jun 21, 2010 at 10:11 pm
Peter,
You don’t need Harry Reid. Go to the IRS.org website, find form 911 and file a request for assistance from the Taxpayer Advocate’s Office.
Tell them about your hardship and health condition and that you need every penny of your social security to survive. Make sure you ask them to release the social security levy.
It will work if you have just enough income to pay your monthly expenses and no significant equity in assets.
Good luck.
8 Joe // Dec 1, 2010 at 5:09 pm
IRS Horror Stories…Check out this IRS employee ratings website. If the IRS employee you are dealing with is not in the database, add them.
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