IRS problems good for taxpayers?
For the Nevada Appeal
Well, what a fine howdy-do and a happy yippity-skippity we have here! The Internal Revenue Service got caught with their hands in the cookie jar. I suppose it is no surprise to those who were being picked on. If you are in the groups that IRS higher-ups currently “like” and thus are feeling “safe,” just remember that power exercised against one group could easily be exercised against others at some other time.
Abuse of power should concern everybody. It’s wrong and ends up creating a distrust of the government, which could lead to less voluntary tax compliance. Our tax system is built on voluntary compliance.
What does this mean to Joe Taxpayer? IRS personnel might feel pressure to be less aggressive (at least temporarily).
One has to believe the IRS internal memos are pressing agents to take less controversial collection actions for a while. It won’t last for ever, and it might not even be that noticeable, but one never knows until they try.
So, if you are dealing with the IRS in any manner other than just annually filing your tax return, don’t be afraid to ask for extra concessions in the form of reduced penalties, interest and favorable payment arrangements. You might even get a reduction in tax owed if an offer in compromise is in order.
If you are being audited, you might be able to propose a more aggressive interpretation of the tax law favoring your position and actually see the IRS agent give you some benefit of the doubt.
Perhaps you have a foreign bank account that you have failed to report in the past. Now might be the best time to come clean with a temporarily “kinder, gentler” IRS.
If you are a nonprofit organization being audited, perhaps the agent might now want you to believe you had a favorable ending over a short period so you don’t run down to the local newspaper to tell the “latest story” of abusive IRS tactics.
Have you been considering amending your prior-year tax returns to take advantage of a more aggressive tax position? Perhaps now is the time to do it. The IRS may (and I stress may, since nobody knows for sure) be more accepting of such a position than it was a month ago.
Are you an employer who has been treating “employees” as “independent contractors,” contrary to the definition of an “employee” per tax law? There are amnesty programs available to make the change. You might find the IRS in a more forgiving mood right now when determining the computation of back taxes, interest and penalties due.
If you have been trying to get an exemption determination for your political group (do I hear “tea party”?), don’t be discouraged; try again. There is a good chance you will be approved, even rather quickly.
Don’t get greedy, though! Did you hear? “Do not corner something that you know is meaner than you.”
Kelly Bullis is a certified public accountant in Carson City. Contact him at 775-882-4459 or BullisAndCo.com.