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IRS has two sets of rules: One for them & one for the rest of us

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POSTED March 29, 2014 12:09 a.m.

Ever been audited by the IRS?

I have. Three times.

When they demand documents they make it absolutely clear you have a set time, usually 30 days or less. They don’t care if you have to ask your employer for 5-year-old expense reimbursements when you traveled on business to Mexico and Utah because you find out later that it had been reported wrong to the IRS as advertising commission even though you never sold ads.

They don’t care if their demand letter arrived when you were on the first day of a 16-day vacation and you now have less than 14 days to get your ducks in line.

In short, they don’t care if you are working two jobs while running your own business, they want the documents and they want them in 30 days. They make it clear in nicely worded threats that at the very least you will be subjected to penalties, fines, and interest and could even be criminally prosecuted.

So what happens when Congress legally subpoenas IRS documents? The IRS tells Congress no can do as it would take years to provide all of the documents requested.

IRS chief John Koskinen said just that to the House Government Oversight and Reform Committee on Thursday. The committee is looking into how the IRS picked the various “social welfare organizations” that can qualify for tax-exempt status if they don’t primarily engage in political activity. 

Koskinen said the IRS has provided more than 1.1 million pages of documents since last spring to congressional committees. He said it is taking a long time because the law requires then to delete sensitive personal information about taxpayers from any document they give to Congress.

That said the IRS has still failed to produce any of the request for all emails since 2009 to and from Lois Lerner. She’s the former IRS top bureaucrat at the heart of the controversy who twice has appeared before Congress and each time refused to answer questions. Try that with an IRS auditor and see where it gets you.

Unless Lerner was personally intervening as a high level manager in individual tax cases, what type of sensitive personal taxpayer information could be in  emails especially between her and either White House officials, political operatives or other federal agencies?

It would be just easier to get the emails through the National Security Administration or perhaps John Snowden.

Most Americans probably could care less about one political party or those of a specific political leaning using the IRS against their opponents. We’ve come to expect such behavior from the adult juveniles that give government a bad name.

What is bothersome is that the IRS — as well as other government agencies — seems to operate above the law more often than not. The rules that apply to everyone else don’t apply to them.

My audits were triggered for a borderline political reason not connected with the IRS. I was one of two school board members that successfully led an effort to terminate a Western Placer Unified School District administrator. That administrator a few weeks after his dismissal was telling people around Lincoln that he had turned me and another board member into the IRS via a hotline where tips can be left anonymously for not reporting $10,000 in income. I dismissed it as gibberish.

Two years later I was hit with my first audit. I was told they were looking for unreported income.

After three years and an audit via the mail from Ogden and one at the Sacramento office I was hit with a tax bill for $76.32 including penalties and interest. I had failed to report interest on a passbook savings account.

It clearly wasn’t the IRS acting upon its own that led to the audit. They found irregularities — expense reimbursement for an entire year reported by The Press-Tribune erroneously as income from advertising sales. I would not have even tied it to a disgruntled ex-employee mouthing off if it hadn’t been for my fellow board member being audited concurrently.

As a taxpayer, I want the IRS to follow up on tips of potential fraud as everyone should pay their fair share despite what Congress thinks by doling out special tax breaks like most people give away Halloween candy.

That said, the IRS clearly using a hammer to get responses from taxpayers “under investigation.” The agency needs to respond in a timely and transparent manner when they are under investigation by our elected representatives who set the operating rules for the government which includes the IRS.

I’m sure if I didn’t comply with the IRS imposed deadlines it would have at the very least cost me more money.

 

This column is the opinion of executive editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA.  He can be contacted at dwyatt@mantecabulletin.com or 209.249.3519.

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