IS THE IRS COMMISSIONER MY NEW BEST FRIEND?
Perhaps a little bit, but he’s not that much into you and definitely not for long. Yes, in response to the COVID-19 outbreak the Treasury Department and the Internal Revenue Service provided special tax filing and payment relief to individuals and businesses. The filing deadline for tax returns has been extended from April 15 to July 15, 2020.
Despite this extension the IRS urges taxpayers who are owed a refund to file as quickly as possible.
For those who can’t file by the July 15, 2020 deadline, the IRS reminds individual taxpayers that everyone is eligible to request an extension to file their return. And as always everyone should note that penalties and interest, the longtime favorite pain infliction tool of our new friends at the IRS, will begin to accrue on any remaining unpaid balances as of July 16, 2020. You will automatically avoid interest and penalties on the taxes paid by July 15.
THE HONEYMOON PHASE WILL NOT LAST LONG
COVID-19 is now waning in America and as long as there is not a significant resurgence, the re-opening will continue even if we get another wave in the fall. People are heading back to work and dollars are starting to flow around the economy again. The bills are now due and the IRS Revenue Officers and Agents are ready to start knocking doors again.
If anything this period should be looked at as a temporary respite where the IRS is slightly more understanding than usual. For people with tax issues its potentially the last best chance to get your affairs in order before the hammer comes down later this year. Soon the IRS will not be so understanding.
THE MINDSET OF IRS REVENUE OFFICERS
It is well known that Revenue Officers basically believe they’re sort of tax cops and unpaid taxes or unfilled tax returns should really be a criminal offense (even though this is clearly not the case).
Every Revenue Officer considers individuals and especially employers who withhold taxes and fail to pay them to the government as an act of thievery. Revenue Officers do not want to hear excuses why individual taxpayers took money that was owed to the government and spent it on cars and luxuries or why employers took funds, in trust, from their employees for their withholding and FICA taxes (called “trust fund taxes”) and not remit them to the IRS as required. Revenue Officers are merciless in these collection situations and taxpayers need to have a resolution plan when they come knocking due to unpaid taxes.
COMPLIANT TAX PAYERS WILL ALWAYS BE #1
For the long run the IRS’s best friend will always be compliant tax payers who are up-to-date with their filing and this can be plainly seen in their acts (as opposed to their words).
Last year newly appointed IRS Commissioner Charles Rettig’s himself initially noted emphasis on customer service and tax payer experience. Perhaps this genuine or maybe it was a ruse to get him past a dead locked Congress, we’ll never know. But his true feelings are reflected in his appointment or Eric Hlyton as the commissioner of the customer facing Small Business/Self Employed (SBSE) Division.
It would be reasonable for you to assume that Eric Hlyton would be from the civil side of the IRS and a strong tax payer advocate. Unfortunately your assumption would be very wrong.
Prior to his appointment to the civil side Hlyton was a deputy chief of the Criminal Investigation Division. While this choice might seem at odds with Commissioner Charles Rettig’s noted emphasis on customer service and tax payer experience, the reality is that ultimately the IRS has no love for non-compliant tax payers.
Upon appointment Eric Hylton himself noted;
“In my opinion, enforcement-—appropriate enforcement—is customer service to the folks who are doing it correctly, who are doing it right, and that’s a different spin on enforcement”.
IRS HIRING SPREE IN 2019 AND 2020
The most important portent for what is coming later in 2020 however, is the IRS hiring spree over the last year. According to Commissioner Charles Rettig, the IRS hired hired nearly 10,000 people during the 2019 fiscal year and plans to hire more than 5,000 additional workers. Speaking at the American Institute of CPAs (AICPA) conference in Washington, D.C., Rettig touted the good news. Rettig has made staffing a priority, noting earlier this year that the agency “essentially lost an entire generation of IRS employees” from 2011 through 2018.
These newly minted IRS Revenue Agents have not been hired to provide friendly customer service to troubled tax payers. They are enforcement specialists. Many of them are now sitting at their home office desks, locked and loaded itching for a fight.
At heart they are tax cops and come July 15, 2020 when the gates are open they’ll be out like sharks hunting down errant tax payers.
If you’ve got unfiled tax returns then submit the form below to schedule a free 30 minute call with one of our Enrolled Agents to understand what you need to do to get your affairs in order with the IRS and put your tax troubles behind.
An Enrolled Agent is a far more efficient and economic option than a Tax Attorney and will help get you back in the IRS good books.
