Tax Advocate on Tax Filings

The Tax Advocate is on the side of tax reform and simplification. The national taxpayer advocate Nina Olson said that the code must be simplified. In her report to Congress her office stated that IRS data shows that individuals and businesses spent about 6 billion hours yearly complying with the tax code’s filing requirements, not including millions of additional hours spent responding to IRS audits or notices. The report says: “If tax compliance were an industry it would be one of the largest in the United States” To consume 6 billion hours the tax industry requires the equivalent of 3 million full-time workers, so says the report.. The current tax code contains more than 200 tax deductions credits, exclusions and similar tax allowances, if all tallied they amount to $1.42 trillion that’s more than Congress pays to run the entire federal government. Olson also requested that IRS change its culture from one that is enforcement oriented, to one that is service oriented and naturally she recommends that Congress give additional funding to the IRS to meet taxpayer needs. Not likely....

Tax Scammers...and the IRS Dirty Dozen

The tax scammers are having a field day. Millions of people are being cajoled and threatened into sending money or revealing damaging personal information to telephone callers and emailers. My professional email is being filled these days by scammers posing as prospective clients. Tags like “urgent- please help” or “I have been referred to you” or just a typically American surname is used as the reference. Opening an email from one of these conmen caused a virus that swallowed my laptop. But it could be worse. The tax scammers are working tax professionals this way. The “client”will seek advice in filing their individual or business tax returns. If the practitioner responds requesting tax data, the scammer forwards an email file for review. Once opened that file contains either a virus or a program designed to infiltrate the practitioner’s computer to obtain identifying and other confidential information. I now simply delete all of these emails as soon as received. If there is in fact a client seeking my services they will have to go about it in the old fashion way. The IRS has listed this scheme as one of the “Dirty Dozen” they publish every year along with many of the usual cast of characters including: Identity Theft, Return Preparer Fraud, Fake Charities (giving out fake news BTW), Padding Tax Deductions( America’s favorite indoor sport), False Credit Claims, Tax Shelter Abuse and Offshore Tax Schemes of all kinds. The list is revised from time to time as the tax season and the year proceeds.