Internal Revenue Incompetence #2

Filed in Tax, Savings by on January 13, 2012

Few taxpayers realize the fast growing extent of Internal Revenue incompetence. I mentioned this in my prior Internal Revenue incompetence post. However, even the Internal Revenue Taxpayer Advocate is now writing about Internal Revenue incompetence. She refers to it as a Threat from Increased IRS Automation and Workload. Her new report talks about inadequate taxpayer service, erosion of taxpayer rights and reduced tax compliance. She especially mentions automated adjustments to tax liabilities as creating problems. She suggests a comprehensive Taxpayer Bill of Rights and more Internal Revenue funding. However, the Obama Healthcare and related laws gave Internal Revenue up to 14,000 new agents, so more money is not the answer.

Here is one comment on the Taxpayer Advocate Internal Revenue incompetence story, “Ever try to call the practitioner hot line anymore? 45 minute holds! It is ridiculous…” Yes, Internal Revenue incompetence is ridiculous when Google has more than three million web pages with these terms. However, this Internal Revenue incompetence post made me add my comment:

The insane “Practitioner Hot Line” 45 minute holds are only the beginning. Instead of getting fax numbers at the start of calls, Internal Revenue incompetence makes us wait while agents get and look up client information. Then we often wait 30 minutes for them to get 2848 powers of attorney faxes. Many faxes do not go through, so you may need a second fax number. Agents also may cut you off in less than an hour (or 10 matters). This made me get 20 year 2848 forms from all clients, not the occasional one year form from those who need it. Bulk faxing these in advance, to the Internal Revenue CAF unit, costs us little, while wasting tremendous amounts of Internal Revenue time. The CAF unit quickly backed up, from 10 days to more than 30 days. However, this saves me 30 minutes on hold on each call.

You can then compound Internal Revenue incompetence by agents who play God. Some reject forms if you fill in dates taxpayers omit, even if you do so when taxpayers are with you. Many attorneys and legal secretaries say they routinely fill in such dates on agreements, but some IRS agents are occasionally above the law in this area. Other agents reject forms that list years like 2005-2011, when there is no room on the form for 2005 2006 2007 etc. Still others reject forms with attached schedules, when limited room and the supposed need to detail dates makes anything but a schedule (or many 2848 forms) impossible. Some agents also play God by rejecting Hot Line calls if you say you are a company officer, even if you also have a 2848. Still others reject your status as an officer unless you are an officer on state records, even if you send minutes proving you are an officer and state laws showing that there is no need to list more than one officer. These are only a few of the endless Internal Revenue incompetence problems with income tax administration, compliance and planning (misplanning). They cost us more than 50% of what we pay in income taxes. They also are the problems that made me an ardent supporter of those who want to abolish the income tax and Internal Revenue. We can save 95% of this $1.2 trillion in annual waste by replacing Internal Revenue incompetence with the Fair Tax (a sales tax, collected by states, with rebates for necessities).

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