I came across this MUST read article. Note that this is written by a very experienced EA (“IRS Enrolled Agent“). He notes that it is hard to communicate with the IRS from Alaska. It is much harder for U.S. citizens abroad to communicate with the IRS. This is definitely worth a careful read. You will understand the IRS better.
— U.S. Citizen Abroad (@USCitizenAbroad) January 14, 2013
Those who are NOT twitter literate can read the article here.
January 12, 2013
By 1989 the Internal Revenue Service had closed virtually all of its field offices in Alaska, concentrating everything in Anchorage with an adjunct in Fairbanks. Travel budgets for IRS employees were virtually eliminated, too, so by the early 1990s almost all audits in the state of Alaska were done by telephone and fax machine. It was a system that worked because there was some IRS employee in Anchorage available via phone to us folks in the bush who would deal with our problem. Then in 2007 we got a new IRS commissioner and considerable transition in the Anchorage office, more or less simultaneously. One Sue Matters took over in Anchorage what used to be called “Problems Resolution,” put up a sign saying “Walk-ins welcome,” and turned off the telephone. So Anchorage is serviced, and the rest of us have been dumped into a large black hole.
To give you some idea of how crazy this crap is back about seven or eight years ago I had a client who sold out a large fishing operation in Alaska to move to the Midwest because of his wife’s job situation. So a Midwest IRS office gets a big Alaska business operation cashing out and expects to cash in by auditing the account. I call the IRS auditor and ask him when by telephone he will be ready to do the audit. Aghast, he insists a telephone audit is not possible; this to someone who has been handling telephone audits, at the IRS’s insistence, at that point for almost 20 years. It took four U.S. Senators to convince the IRS in this office otherwise, and the case was ultimately closed out routinely, by telephone.
Since 2007 the situation has not simply deteriorated; I am now convinced it has just become a damned scam, and I am very tired of it, and am disgusted by it. The IRS is stealing from the public intentionally. They make mistakes, assess penalties on their own mistakes, then make it virtually impossible to get to someone to fix the mistake. Multiple situations, indeed most of them arguably, are subject to either elimination or reduction of the penalties imposed; so the IRS has intentionally created a system so dense, so obtuse, and so based on multiple levels of extended call-waiting and confused and confusing messages, frequently ending with a disconnection or unintended reconnection to another IRS office in another part of the country, that even I as a professional with 37 years experience cannot wade through it with any reasonable prospect of success.
The purpose of this crap is to exhaust you and make you go away; to steal your money.
Here’s another case in point, one I am trying to deal with on the phone even as I one-peck this article. I am now in my seventh hour of trying to deal with a matter that should have taken no more than ten minutes to fix. Back in August last year a client mailed in a tax return I had prepared on their behalf, and for which an extension had been filed, and attached to it a check for several thousand dollars to pay the bill. The check was promptly cashed, but for whatever reason the IRS did not get around to processing the tax return until March 2012, at which point the automatic processing automatically assessed massive failure-to-file penalties. It should take a matter of minutes for some IRS person to reverse this gaffe.
But instead the taxpayers’ 2011 refund has been reduced to pay for this incorrect assessment, so the IRS already has the money, and there is no easy way to get it back. They really have neither intent nor desire to give it back; they have created a system designed to exhaust you into just giving up. The system is specifically designed to systemically steal your money. Oh, they have a system in place to attend to grievances; it is just completely inaccessible to anybody, and it is intentionally designed that way.
We need a new IRS commissioner right now, and we need a new attitude and a new system immediately. The IRS gets plenty already; they do not need to steal, and the thieves need to be cleaned out now. The thieves in this case are the” systems hogs” who worship system, but exclude the customer (the taxpayer in this case) from the process; i.e. a standard current business model, take your money and then tell you to go to hell.
No taxpayer or accountant should have to endure the intended torture of trying to deal with the current bureaucratic structure of the IRS. The grievance and appeals process is not broken; it is designed to serve the needs of the bureaucracy at the cost of the customer (the taxpayer), and that is the intended result.
Here’s another case in point. Back in the fall of 2009 New Zealand national security intercepted a tax package I had sent to a client in New Zealand because of a slight address flaw. They held onto it for more than a month before forwarding it to the client, so his filing was late, and substantial penalties were assessed, and collected. These penalties were all reversed given the circumstances. What occurred in the fall of 2009 was resolved in the summer of 2012. In the meantime the U.S. government was using this man’s money. After running this case through multiple stages of appeal, and getting nowhere, I finally traveled to the Fresno, California, IRS offices to see someone face to face.
At that point I was told that I had to go through a series of no fewer than five to seven written appeals, all of which would be processed by the computer, and rejected (the go to hell, customer, part of the business model) before a single human being would intervene in the process. And that basically is what happened. Almost three years to resolve a simple case that should have taken a few minutes on the telephone.
Up until 2007 the old system took care of these problems in a few minutes. Up in Anchorage there was someone who answered a telephone, or returned calls (something the contemporary IRS virtually refuses to do), and routine problems with the IRS were handled routinely, and in very short order.
I respectfully request immediate action on the part of our two U.S. Senators and our Congressman to restore IRS customer service to the rest of us in Alaska about the time they finish reading this. Waiting for years while trying to deal with an impossible system is just stealing by another name. And wasting my time by the bucket loads trying to solve a simple problem is just another form of rip off crap.
Update: After almost ten hours of dithering, primarily waiting for some IRS person to answer a phone, the case on which I was working to recover an unwarranted FTF penalty was rejected by the computer. The IRS staff person was quite nice in explaining to me the randomness of this action. “We have no idea why the computer decides as it does. The computer decides, and all I can do is inform you of that fact.” I now get to write five to seven letters of appeal, all of which will be rejected out of hand by the computer, before some IRS person will extend to my client the courtesy of reviewing the case.
I urge you to forward this article to anybody and everybody, and to, furthermore, relay your experiences with the IRS to your Congressperson and to your two U.S. Senators. Only by so doing can this mess be cleaned up. Hearings are generally required to accomplish that, and that takes noise from the hinterlands. This is not in any sense exclusively an Alaska problem; this mess affects everyone who has to talk to the IRS about their taxes.
David G. Hanger, EA, MBA
Published January 12, 2013