Thanks to Bubblebustin for discovering:
Shulman #IRS #OVDP program receives scathing review from Taxpayer Advocate – Adventures in #FBAR http://t.co/t4BRKIayO6
— U.S. Citizen Abroad (@USCitizenAbroad) July 11, 2013
This really is a must read. If Taxpayer Advocate is critical of the IRS creation, administration and “execution” (pun intended) of the voluntary disclosure programs who wouldn’t be? Thanks to the work of Just Me, NotThatLisa, Moby and more we have learned a great deal about the “nuts and bolts”, “continued injustices” and confiscatory nature of the programs. We are also being introduced to a certain breed of lawyer who clearly is NOT working in the interests of the client. Those lawyers who automatically (without taking the time to completely understand the facts) put people into OVDP are committing ethical violations. The tragedy is that there are a number of them out there.
Those who are NOT Twitterliterate will find the report here:
When I saw Bubblebustins’s comments I posted the following comment, which she encouraged me to include with this post.
This is a great find and should be read by all. Taxpayer Advocate minimizes the true damage that the Shulman Voluntary Disclosure programs have done to the IRS and therefore to America, it’s citizens and it’s other residents.
Here is a partial list:
1. Through its unreasonable and immoral behavior, the IRS has reduced ALL incentives to come into compliance. For the average middle class “jay walker”, it’s hard to imagine receiving worse treatment than in OVDP. Why? Assuming minimally competent legal counsel, the IRS has little chance of successfully asserting willful penalties. The unreasonable behavior of the IRS has done nothing except generate contempt for the IRS. Furthermore, by reducing all incentives to come into compliance many rationally believe they are better off staying out of compliance.
2. Through its inconsistency in application (nobody really knows how they will be treated) the IRS has ensured a total lack of trust in the IRS.
3. It’s recent abuse of authority (quite possibly under the direction of the Obama administration) has further eroded confidence in the organization.
4. For many, the IRS has become the face of the U.S. government. This is bad for immigration. It is bad for responsible citizenship. It has resulted in a world where people want to renounce their citizenship. It is simply bad for America and its stakeholders.
5. The design of the OVDP program demonstrates beyond a shadow of a doubt that it is about “confiscating assets”. It’s not about taxation. It’s about confiscation. Just look at what the penalties have been relative to the tax owed. When much of this is related to Americans abroad buying mutual finds in their country of residence it becomes even more sickening and sickening it is.
6. By the fall of 2011the IRS clearly knew that many Americans abroad and green card holders had entered the OVDI program. They knew this was inappropriate. What did the Shulman IRS do? They came out with OVDP 2012 without any change in the rules/qualifications. Absolutely contemptible behavior.
7. They changed the rules in OVDP 2009 – remember the “bait and switch”. They failed to respond to the Order of Taxpayer Advocate to remedy the situation. They set themselves up as judge, jury and executioner to destroy the lives of a lot of good people who believed this was their only way of coming into compliance.
8. They failed to respond to the concerns of the New York State Bar Association concerning the administration of OVDI 2011.
9. In the December 2011 Fact Sheet, they promised further guidance for how Americans Abroad could come into compliance. One would have thought this guidance would have appeared prior to the June 15, 2012 tax filing deadline. The guidance did NOT come prior to the deadline. Rather an announcement was made at the end of June 2012 with a promise of further instructions to come. This did not come until August 31, 2012 (making it difficult for people to deal with their 2011 taxes).
10. What about Green Card Holders residing in the U.S. who want to be in compliance? Right, what about them?
The effects of the Shulman IRS on America have only begun to be felt. This is a sick, sick organization.
If you have read this far and are thinking of entering OVDP, I have a word of advice for you:
BTW, the interview with Marie Sapirie has been posted else where at IBS, since I first mentioned it here, I would point out that the tax notes article was made public on their free web site here.
News Analysis: The Personal Impact of Offshore Enforcement
Read this as well:
Particularly also the Appendix – a FOIA request submitted 3 times to the IRS – with most of the request items denied.
‘The 2013 GAO Report
of the IRS Offshore Voluntary Disclosure Program Reveals Key Facts:
There Were Not Billions of Income Taxes Collected
Few Offenders (378 Taxpayers) Represented One Half of All Collected Dollars – Reported At that Time
Taxpayers with Smallest Accounts (10th Percentile) – Apparently Owed (Median) of a Few Hundred Dollars per Year in Income Taxes’
By: Patrick W. Martin, and
G. Michelle Ferreira,
more statistical and critical analysis of the OVD programs and how the IRS ‘marketed’ them to minnows and those with no criminal liability through threats and misinformation. The authors submitted FOIA requests three times to the IRS in order to analyze the actual makeup of those participating and the outcomes they received in the OVDs.
and read this comment I am copying from Robert Woods Story on the surge in expatriation..
Mr. Wood. Again, congratulations and thank you. What you describe ie the truth. The great majority of us Americans living and working abroad are not renouncing in order to avoid paying taxes. I am beginning to explore this possibility because I can not spend six months filing my Income Tax return to two countries, besides being double taxed. Not to speak of the enormous fear of doing something wrong and losing my life savings. Do I like this? No! But I feel I have no choice.
Let me use this opportunity to let you know about the obligation of the IRS Commissioner to answer the report of Nina Olson to Congress.
Here is an excerpt from the National Taxpayer’s Advocate Annual Report to Congress for 2013, page 2, dated December 31, 2013:
“Congress provided for the IRS’s ability to comment and respond to the National
Taxpayer Advocate’s recommendations (both in the Annual Reports and elsewhere) by requiring the Commissioner to “establish procedures requiring a formal response to all recommendations submitted to the Commissioner by the National Taxpayer Advocate within 3 months after submission to the Commissioner.6”
Note 6 reads as follows: 6 The Commissioner shall establish procedures requiring a formal response to all recommendations submitted to the Commissioner by the National Taxpayer Advocate within 3 months after submission to the Commissioner. C § 7803(c)(3).”
The cited reference states the following: “The Commissioner shall establish procedures requiring a formal response to all recommendations submitted to the Commissioner by the National Taxpayer Advocate within 3 months after submission to the Commissioner.”
The IRC from which this information is extracted was approved by Congress
As far as I have been able to determine this procedure was followed by IRS commissioners until Commissioner Doug Schulman, towards the end of his 5-year term as IRS Commissioner, ceased complying with this obligation. Since then none of the several persons who have been appointed Commissioner by the President, have complied with this obligation. Since early in Commissioner Shulman’s tenure, no such reports have been issued.
To which Robert replied…
Thanks for this, and especially thanks for digging out the requisite response that is supposed to come out of a Taxpayer Advocate recommendation. I have been meaning to look this up. Of course, I thought Nina Olson would make an outstanding Commissioner!
Thanks for keeping tabs on that @Just Me. I am finding it almost impossible to keep track of all that is going on on all threads and angles.
And thanks for being so patient and diligent about cultivating a dialogue with someone who has the knowledge and ability to investigate what you highlight. I think we have done alot to point out good leads for stories and research – if any US or other journalists had the motivation to pursue them – not just the human interest angles – which require real names, but the legal, civil and procedural injuries that CBT, FATCA, and FBAR have provoked.
The failure of anyone to get the requisite details via FOIA – for the true numbers expatriating, and for the true treatment of those in the OVD programs is telling.
Where would we be without Nina Olson? I shudder to think.
We can only hope that the new Commissioner will start reading Nina’s reports, and even if NOT responding officially according to the law,he will listen and take some action…
Maybe this is an indication of that? Don’t know, but kinda sounds like it…