Your Tax Dollars at Work - an Editorial.

Eva Rosenberg, EA Your TaxMama

Over the last decade, IRS has had to battle the legislature to get operating funds. Ironically, even though IRS has collected billions of dollars from major cases, like the Son of Sam tax scam, the Service hasn't even been permitted to keep the penalties to help their budget.

Of course, the argument is, if IRS is permitted to keep the penalties, they'll assess high penalties to fund the agency.

TaxMama feels that if IRS is permitted to keep all penalties they collect from any taxpayer, when the penalties total $50,000 or more, that wouldn't be a threat at all. After all, anyone with penalties that high AND the money to pay them, would be battling the tax assessment with a team of EAs, CPAs and/or attorneys anyway. The courts would prevent IRS from assessing the tax if IRS is wrong. And with no tax, there would be no penalties.

Set the bar high enough, and IRS gets a decent working budget, more incentive to go after the real offenders - and less incentive to chase after small fry. How could we lose.

Anyway, here's IRS, collecting all this money, still having to fight to pay their own bills.

So, finally, IRS Commissioner Mark Everson announces that he's closing 68 taxpayer assistance centers - and that gets Congress' attention.

Congress insists the IRS keep those centers open.

Do you think this was just a really good bluff to get the legislature's attention? I love it! Don't ever play poker with Mark Everson.

[Of course, both the House and the Senate are throwing money at studies to learn the impact of the closures. Wouldn't it be cheaper just to use the money allocated to the studies to keep the centers open?]