Update on the current pathetic condition of the IRS
Michael PlaksPro Member
Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votesSobering assessment from the annual report by the Taxpayer Advocate Service (a semi-independent branch of the IRS basically tasked with specific and systemic problem resolution):
- 10-month refund delays on paper-filed tax returns are common
- backlog of millions of unprocessed tax returns is still here
- the IRS only answers 1 out of 10 calls, with an average 30-min hold
- they are vehemently opposed to implementing technology like bar codes
More details here if interested: https://www.thetaxadviser.com/...
@Michael Plaks the craziest part is many don’t realize an actual human, in 2022, sits at a desk to type in numbers from any paper filed returns! Maybe use OCR to start?!
@Michael Plaks the craziest part is many don’t realize an actual human, in 2022, sits at a desk to type in numbers from any paper filed returns! Maybe use OCR to start?!
Are we surprised? And sending in 87,000 armed agents will help how?
@Michael Plaks the craziest part is many don’t realize an actual human, in 2022, sits at a desk to type in numbers from any paper filed returns! Maybe use OCR to start?!
Are we surprised? And sending in 87,000 armed agents will help how?
87,000 armed agents is a media hype. They are indeed trying to hire a bunch of new employees, but they are for all kind of jobs, including answering phones and processing.
The IRS has always had a relatively small armed Criminal Investigation Division - the one that brought down Al Capone.
The biggest problem with their hiring plan is lack of resources to properly train these new employees. I expect an influx of poorly trained people unable to do their jobs. It's already a headache to deal with the IRS, and this will likely make it worse.
sending in 87,000 armed agents will help how?
We’re supposed to take such previously disproven drivel seriously?
Like it or not, better enforcement of the law is only fair. Don’t like it? Vote, and have our representatives change the laws.
Semper Fi, Mac
Like it or not, better enforcement of the law is only fair. Don’t like it? Vote, and have our representatives change the laws.
My bad, I meant the ones in the CI units only....
And this is not about enforcing laws only, this is about possible/probable harassment.
My .02 only.
@Michael Plaks the craziest part is many don’t realize an actual human, in 2022, sits at a desk to type in numbers from any paper filed returns! Maybe use OCR to start?!
sending in 87,000 armed agents will help how?
We’re supposed to take such previously disproven drivel seriously?
Like it or not, better enforcement of the law is only fair. Don’t like it? Vote, and have our representatives change the laws.
Semper Fi, Mac
@John Clark: Your comment: "We’re supposed to take such previously disproven drivel seriously?"
Exactly what part of this "drivel" has been "disproven"?
sending in 87,000 armed agents will help how?
We’re supposed to take such previously disproven drivel seriously?
Like it or not, better enforcement of the law is only fair. Don’t like it? Vote, and have our representatives change the laws.
Semper Fi, Mac
@John Clark: Your comment: "We’re supposed to take such previously disproven drivel seriously?"
Exactly what part of this "drivel" has been "disproven"?
I think he means that only some of the agents are being armed, those in the CI division. So not all of the 87,000 dimwits are being armed, just some. This hails back to the old days when we needed armed IRS agents to take down Al Capone.
@Michael Plaks the craziest part is many don’t realize an actual human, in 2022, sits at a desk to type in numbers from any paper filed returns! Maybe use OCR to start?!
Mark Kohler is far from "a random guy." He is a well-respected educator in tax and legal matters. I don't always agree with him, but it's not unusual between tax professionals.
For example, I disagree with this very common notion that extensions make it safer from an audit angle. This is based on an odd assumption that the IRS is extremely efficient and picks up their "quota" of audit targets between April and October. I very much doubt giving our government this much credit. Audits start about 2 years after filing. Are you saying they select their targets and then sit on that list for 2 years? Don't think so. I think they do not start picking their audit targets until 1.5-2 years later, well past the extension deadline. At which point extended and non-extended returns are in the same pool.
There're plenty of known audit flags to avoid though. Yes, definitely do not round your numbers. Do not claim unrealistic mileage. Do not claim real estate professional if you do not qualify. Do not claim your $40k rehab as "repairs." And a lot more.
The drivel is the “87,000 armed.” Disproved eight ways to Sunday at the very beginning.
The drivel is the “87,000 armed.” Disproved eight ways to Sunday at the very beginning and only Biden-lost believers give credence to such Fox News lies.
Let's refrain from politics and aggressiveness here. We can state our opinions without.
Mark Kohler is far from "a random guy." He is a well-respected educator in tax and legal matters. I don't always agree with him, but it's not unusual between tax professionals.
For example, I disagree with this very common notion that extensions make it safer from an audit angle. This is based on an odd assumption that the IRS is extremely efficient and picks up their "quota" of audit targets between April and October. I very much doubt giving our government this much credit. Audits start about 2 years after filing. Are you saying they select their targets and then sit on that list for 2 years? Don't think so. I think they do not start picking their audit targets until 1.5-2 years later, well past the extension deadline. At which point extended and non-extended returns are in the same pool.
There're plenty of known audit flags to avoid though. Yes, definitely do not round your numbers. Do not claim unrealistic mileage. Do not claim real estate professional if you do not qualify. Do not claim your $40k rehab as "repairs." And a lot more.
You raise a very good point though. "Audits start about 2 years after filing."
I have been planning a post on a Flipper that just had his trial for tax years 2014-2016. This is October 2022. The grand jury returned the indictment in Aug 2021 I think it was. I would have thought that the SOL was the standard 3 years, so detail is missing in the article. He was found guilty on all counts. I have a suspicion of the sequence of what happened. Once I dig into it and find out more, I'll post it. It will be an interesting study and fair warning for flippers and wholesalers. MIght keep some people out of trouble.
Sobering assessment from the annual report by the Taxpayer Advocate Service (a semi-independent branch of the IRS basically tasked with specific and systemic problem resolution):
- 10-month refund delays on paper-filed tax returns are common
- backlog of millions of unprocessed tax returns is still here
- the IRS only answers 1 out of 10 calls, with an average 30-min hold
- they are vehemently opposed to implementing technology like bar codes
More details here if interested: https://www.thetaxadviser.com/...
Embarrassing to say the least. I contacted them multiple times in 2021 & 2022 and was never able to speak to a real person.
well of course its "crazy" for you "guys' " point of view to have paper returns filed... But, if I can file my own returns for free (well, cost of paper and postage) just as well instead of paying an accountant, why should I? If the lobbyist would allow the gov't/irs to put out a free software package for me to file electronically for free, I would. If "the powers that be" would have continued to sufficiently fund the IRS instead of allow the staff to be reduced some 50% over I think last 10years, we wouldn't be in this accusatory mode --- well, there will always be people with their opinions... Trying to stay apolitical, but it would seem that if ANY organization/element was allowed to atrophy, the outcry in this country is to let it fail but it sucks so bad why would we want to make to better "... to suck more???.."
You want your phone calls answered? Fund it so there is somebody, hopefully trained and experienced, to answer your calls. Better yet, if you are that so gosh darn great, why do you even need to make a phone call? The accountants/cpa/tax preparers are so good, why do we need auditors???? Why do public corporations get their accounts audited? Trust the accountants.. like trusting the lawyers... hmmm...
Customer service is pretty awful across the board IMO, gov or corp. I just spent 3 months wrestling with a loan processor to close an escrow account for a new loan that I never wanted opened. I followed their instructions, it was supposed to take 3-7 days, and they kept 'losing' the request - and calling a new rep every week and starting over was like being in the twilight zone. There was no way to get a specific rep to commit to helping me, even when I spoke to managers. They would promise to send me a status and help see it through - and just never did. I called probably 25 times and wasted hours of my life because I wanted that several thousand dollars of MY MONEY back.
Great business to be in I guess - processing payments on behalf of a company that actually writes loans and takes risk, with no accountability to your 'customers.' Adding no value.
got an email from paypal last week. they will start reporting any goods/services transactions over $600/year to IRS. IRS loves nothing more than to squeeze the little guy just a tad more.
This was done by Congress, not the IRS. And you were always supposed to report all your income, with or without 1099s.
I agree that this reporting provision is awful, but not because it's "squeezing the little guy" - it's awful because of the massive confusion and double reporting it will create if not overturned. Let's hope it will get removed.
well of course its "crazy" for you "guys' " point of view to have paper returns filed... But, if I can file my own returns for free (well, cost of paper and postage) just as well instead of paying an accountant, why should I? If the lobbyist would allow the gov't/irs to put out a free software package for me to file electronically for free, I would. If "the powers that be" would have continued to sufficiently fund the IRS instead of allow the staff to be reduced some 50% over I think last 10years, we wouldn't be in this accusatory mode --- well, there will always be people with their opinions... Trying to stay apolitical, but it would seem that if ANY organization/element was allowed to atrophy, the outcry in this country is to let it fail but it sucks so bad why would we want to make to better "... to suck more???.."
You want your phone calls answered? Fund it so there is somebody, hopefully trained and experienced, to answer your calls. Better yet, if you are that so gosh darn great, why do you even need to make a phone call? The accountants/cpa/tax preparers are so good, why do we need auditors???? Why do public corporations get their accounts audited? Trust the accountants.. like trusting the lawyers... hmmm...
A few points in response:
- It's not crazy to file paper returns. It's crazy that they still process these paper returns by manually keying them in - a horribly inefficient and error-prone process that must be replaced with OCR, bar codes and other technologies that have been in use everywhere except the government.
- Free tax preparation, including eFiling, does exist if your AGI is under $73k: https://www.irs.gov/filing/fre... The IRS announced they are finally working on universal free eFiling for any level of income.
- The IRS is chronically underfunded indeed, and it is as chronically inefficient. The new bill just poured another pile of money into the IRS which is supposed to fund new hiring, new technology and yes, more enforcement. I'm not very optimistic personally. Funding the government is a black hole.
- Where the powerful interests mess it up the most is not in underfunding the IRS. It is in creating and growing the atrociously complex tax law we have, and it keeps getting worse. But trying to simplify it would inevitably remove existing tax breaks from this or that group (like real estate investors, for instance) - and it is a political disaster. We all want a simple(r) tax system but only as long as we personally do not have to pay more. Good luck with that.
- Auditors are not there because they do not trust accountants, even though some accountants are not to be trusted. Auditors are there because they do not trust the taxpayers, and rightly so IMHO. It's basic human nature to underreport income and inflate deductions when it affects how much you have to pay. And even people who are completely honest (and their accountants) make mistakes due to the insane complexity of the rules.
@Michael Plaks I’m no news nerd but haven’t we starved, raped and pillaged the IRS? We strong capitalist think of ourselves as “self made”‘ but this place wouldn’t be great if it was any less socialist. The IRS has been vilified but it’s just an agency to collect the money to pay for what makes this country great
@Michael Plaks the craziest part is many don’t realize an actual human, in 2022, sits at a desk to type in numbers from any paper filed returns! Maybe use OCR to start?!
@Michael Plaks it is an affront to curtail truthful speech that might offend - That’s how we got Agent Orange
Thanks. Yes, I know free filing system exists. But, doesn't do me much good.. Its been around for I thought at least over a decade, but everything I've read said it was hamstrung because the lobbyist (for the tax preparers) kept it beat down. Yes, I head finally they were given the go ahead to work on a more "universal solution." yeah, just to think they could have been working on a system for at least the last 10 years...
not sure how bar codes or 2D matrixes would help. Not even sure how much OCR would help if somebody hand filled in the paperforms. Granted, I at least fill them in electronically then print them out. Remember, the rest of us non-professional tax preparers (it still our right I thought to be able to fillout our own forms) don't have a system to spit them out for us. I don't keep track of whatever new tech, but unless the data was entered electronically in the first place, I don't see how any of it can be pre-encoded into a printed barcode. We can't even do 1099's from electronic docs ourselves -- us non-professionals.
Government isn't supposed to be efficient... I find it interesting people keep throwing darts at it, but they keep staying in places where it still exists...
Oh, sure tax payers aren't to be trusted... But, I was referring to the auditors/cpa's who are hired to audit accounts of publically traded companies... It would seem that since they are paid, they are okay to continue. Just similar to how lawyers are pretty much the most protected profession since, at least up until recently perhaps, its the lawyers are generally sit in Congress writing up the laws.
(sigh) such is life...