For those of you who like
statistical gossip about the goings on inside the IRS, here's what happened this last tax season, along
with my inimitable insight - spelled sarcasm! (Where appropriate... And the comments are in shades of blue!)
TAX SEASON '98: Filing Stats from the IRS. According to the
Internal Revenue Service, taxpayers have reaped the benefits of
the two principal hallmarks of this very successful tax season:
increases in electronic activity and improvements in customer
service.
1) Electronic filing of tax returns -- by computer and by
telephone -- surpassed IRS projections, increasing by more than
28 percent, to 24.2 million returns as of April 17. The IRS Web
site had over 340 million hits from taxpayers seeking
information, forms or publications; almost tripling last year's
filing season activity. IRS TaxFax sent more than 750,000 faxes,
an increase of more than 30 percent.
This is my first year using E-File. I only tested it on about
a dozen returns. Will be doing it for mine, too. Because of my
software, TaxWorks, it turned out to simple and painless.
Looking at their TeleFile program (where you can file simple tax
returns by keying in information from your own phone), you can
see why H&R Block's commercials are starting to target more
sophisticated clientele. If TeleFile expands, the quickie, tax
storefronts like H&R Block and Jackson Hewitt will lose a major
part of their customer base. Even immigrants can use a touch
tone phone.
2) The IRS opened its telephone help lines 96 hours a week,
resulting in 17 million fewer busy signals. More than 150 local
IRS offices offered walk-in assistance on six Saturdays. A
special Earned Income Tax Credit Awareness Day and two Problem
Prevention Days helped taxpayers get the benefits they were
entitled to while avoiding mistakes on their returns.
Remarkably, except for once, every time I called the IRS, I
was connected to a live person in under ten minutes. Better
still, they were able to take care of putting holds on IRS wage
and bank levies on the spot. Sadly, though, my clients didn't
get the same results - you think maybe they don't know what to ask
for - or how? Like maybe my years of training and experience -
and the hours I put in to stay on top of the information and
procedures are worth something? What a concept.
As of April 17, the IRS had received more than 100 million tax
returns and processed more than $84 billion in refunds, with
nearly $32 billion of that amount deposited directly to
taxpayers' bank accounts.
1998 FILING SEASON STATISTICS
Cumulative through the week ending 4/18/97 and 4/17/98
|
INDIVIDUAL INCOME TAX RETURNS [electronic and paper]: |
|
Total Receipts
|
100,867,000
|
100,267,000
|
-0.6
|
|
Total Processed
|
68,411,000
|
71,906,000
|
5.1
|
See that reduction in total returns received? Do you think
that may have to do with the imbecilic Capital Gains maze? See
the IRS note below about Schedule D's.
|
ELECTRONIC-FILING -- TOTAL RECEIPTS: |
|
Standard E-file
|
14,242,000
|
18,307,000
|
28.5
|
|
TeleFile
|
4,677,000
|
5,933,000
|
26.9
|
What did I tell you about TeleFile? See, your own phone is now
a powerful weapon. And, if you want to file a fraudulent return -
you can stop jeopardizing your preparer! Not that I haven't seen
preparers filing false returns without even telling their
clients they've done that to/for them. These "pros" rely on
getting lots of clients because they are "expert" at getting
them high refunds. Ultimately, it's the client that faces huge
penalties when the fraud is discovered - and trust me,
the IRS is getting better at it!
|
REFUNDS CERTIFIED BY THE MARTINSBURG COMPUTING CENTER: |
|
Number
|
60,380,000
|
62,531,000
|
3.6
|
|
Amount (US$Billion)
|
78.221
|
84.217
|
7.7
|
|
Average Refund
|
1,295
|
1,347
|
4.0
|
Please note - this is after they held up lots of refunds due
to errors or fraud on the returns. Ask me about that someday.
|
Number
|
15,079,000
|
17,557,000
|
16.4
|
|
Amount (US$Billion)
|
26.896
|
31.849
|
18.4
|
This has great participation. But even though I really like my
buddies at the IRS, I'd never volunteer my bank account number
to them. What are you, nuts?
MAY PROBLEM SOLVING DAYS FOCUS ON SMALL BUSINESS. Beginning
May 16th, IRS will begin to emphasize the use of problem solving
days to resolve issues for small business as well as individuals. See
the IRS Digital Daily homepage:
or call the toll-free NAEA TaxFax (800-804-1040) to obtain the complete list (TaxFax doc. #760).
Terrific. A brilliant idea. Don't abuse it! Go in, with or
without your preparer if you have been having a problem for a
long time. Don't go there to have people do your return for you;
to convince the IRS to break the law; or to set up a simple
installment agreement - you can do that one by phone.
Go to the Problem Solving Days if the IRS made a mistake and you
haven't been able to get anyone to understand - like your
husband filed a joint return without your signature, while you
filed your own separate return - and the IRS is charging you for
taxes on an illegally filed return. You know, stuff like that.
You must make an appointment for these days. See if your
situation qualifies when your call for the appointment.
IRS LOOKING FOR SCHEDULE D FROM ONE MILLION TAXPAYERS.
At least one million taxpayers with capital gains distributions of less than
$33 failed to attach a Schedule D to their returns and will be
hearing from the IRS. . . the Taxpayer Relief Act of 1997
eliminated the option of taxpayers with capital gains
distributions of less than $300 simply writing "CGD" next to the
capital gains line on Form 1040. Absent the Schedule D, the IRS
does not know at which rate a distribution should be taxed. TRA
97 created tax rates of 28, 25, 20 and 14 percent, depending on
how long the instrument was held and when it was sold.
Duh, I don't get it. Do you?
PENALTY RELIEF FOR FAILURE TO TIMELY FILE THE 1997 FORM
3520-A. Because the 1997 Form 3520 A, Annual Information Return
of Foreign Trust With a U.S. Owner, was not available in time for
foreign trusts to meet their filing requirements, no penalties
will be imposed.
Gee, they've never done that before! Uh huh. Do you know how
many times we've had filing requirements and the forms (and
rules) didn't exist for more than a year after they were due to
be filed? Talk about vaporware!
IRS PROSECUTIONS VARY. If you live in a small city in the South
in 1996, you were twice as likely to face an IRS criminal
prosecution than if you lived in a large metropolitan city such
as Los Angeles. A study done by the Transactional Records Access
Clearinghouse found that per capita tax convictions were twice
the national average in Pensacola, Fla.; Greensboro, N.C.;
Memphis, Tenn.; and Charleston, W. Va. Convictions in Los
Angeles, Chicago, Boston and Detroit were below the national
average. "Depending upon where you live, there are many
hard-to-explain variations in how the government treats
taxpayers," said David Burnham, the study's author, who will
testified before the Senate Finance Committee on April 28.
Whew! Get out of those small towns, buddy. Too many people
know what you're up to. And the best source of criminal
information is from people who turn you in. Did you know about
Form 211? The one that will give you a reward if the IRS can
prove your accusations and collect money from your (former)
friends, boss or lover. (Talk about Orwell's 1984!)
IRS AUDIT REVEALED CONFIDENTIALITY FLAWS. Aghast to find that by
simply offering a taxpayer's name, address and Social Security
number, a government investigator was able to gather confidential
taxpayer information with a simple phone call, the IRS has put in
place new requirements for release of information. Now calls to
change a taxpayer's address or release of tax account information
will require at least two other pieces of information in addition
to the name, address and phone number.
Well, that makes my job that much harder. Professionals with
legitimate powers of attorney are finding it harder and harder
to get problems resolved because the IRS agents are being over
careful!
SIGNS OF THE NEW IRS . . . want to know more about the
Commissioner's proposed reorganization for IRS? Just go to the
IRS homepage (see tax links on NAEA homepage ),
scroll down all the way to the bottom, and click on "Meet the
Commissioner," then "The IRS is Modernizing."
If all of this has intimidated you or helped you understand why
you need a wiser and brighter tax mind to help you, ...and you don't
want to pay me my exorbitant fees (trust me, I do not come
cheaply!) - here's a great source for the nation's tax experts:
NAEA's toll-free Enrolled Agent Hotline helps you find a local
Enrolled Agent - fast ... here's the number: 800-424-4339 or
visit the Tax Channel on the World Wide Web: http://www.naea.org
or at AOL - America Online, keyword Tax Channel
In fact, I borrowed these Tidbits from E@LERT that the National Association of Enrolled Agents send exclusively to
member EAs.
FREE SUBSCRIPTION:
