Tax Problems Blog

September 21, 2017

Installment Agreements and streamlined installment agreements – Taxpayers are entering into agreements they cannot afford

Filed under: IRS Abuse, Misuse, and Taxpayer Rights Violations — Administrator @ 1:46 pm

The Taxpayer Advocate (September, 2017) has posted concerns about the disturbing long term effects on taxpayers entering into installment agreements that prevent them paying basic living expenses. The following are key points:

1. Taxpayers are routinely entering into and making payments on installment agreements despite having monthly income lower than their Allowable living Expenses.

2. Collection alternatives (e.g., Offer in Compromise, installment agreement, currently not collectible), should be designed to set a taxpayer up for success in meeting tax obligations. This includes paying current taxes.

3. The IRS Allowable Living Expenses do not adequately capture all necessary expenses.

4. Installment agreements are the most common collection alternative for taxpayers.

5. Installment agreements that disregard the taxpayer’s ability to pay AND meet basic living expenses, is an agreement set up for failure.

6. The “streamlined” installment agreement is the most frequently used form of installment agreement (in fiscal year 2014, 94.9 percent of installment agreements were streamlined; in fiscal year 2016, 84.4 percent of installment agreements were streamlined).

7. Using a Streamlined installment agreement means that there is NO financial analysis and NO application of the Allowable Living Expense “standards”. The IRS simply divides the balance due by 72 or even 84 months. As a consequence, the required monthly payment bears no relationship to what the taxpayer can actually afford to pay.

8. Disturbing long term effects – study found that 40 percent of all taxpayers who entered into installment agreements in 2014 had income levels below their Allowable Living Expenses – meaning those taxpayers could not meet their basic living expenses.

9. Over 400,000 taxpayer accounts in the study qualified for Currently Not Collectible. Thus, payments to the IRS created economic hardship. The taxpayer making payments were thus foregoing basic living expenses (such as utilities, food and a place to live).

10. The study found that taxpayers who had gone through a financial analysis (through the Advocates Office) to determine if the taxpayer could actually afford the streamline installment agreement payments (without foregoing basic living expenses) had a lower default rate than taxpayers who had not. During this financial analysis, consideration wass given to: the ability to pay basic living expenses, whether there is sufficient withholding to make sure current taxes are full paid, and that self-employed persons have sufficient income to make their estimated tax payments. Read More Here

IRS Corruption – Deep State

Filed under: IRS Abuse, Misuse, and Taxpayer Rights Violations — Administrator @ 10:31 am

Justice Dept refuses to open IRS Corruption Criminal Conduct investigation – Lerner / IRS deliberately targeted political opponents .. FBI, Justice Dept. Collaborated with IRS to prosecute groups illegally …

in video approx 7:48
Inside Judicial Watch: JW’s Battles Against the Deep State

September 20, 2017

IRS Allowable Living Expense Standards Do Not Provide Taxpayers With a Sustainable Standard of Living

The Taxpayer Advocate (August, 2017) has made findings as to the method the IRS uses to determine the amount of basic living expenses it should take into account concerning payment of tax debt over time. The following are the key points:

1. Congress directed the IRS to make sure taxpayers who enter into offers in compromise still have enough money to cover their basic expenses.

2. Congress told the IRS to “develop and publish schedules of national and local allowances designed to provide that taxpayers entering into a compromise have an adequate means to provide for basic living expenses.”

3. The IRS Allowable Living Expenses (ALE) standards have come to play a large role in many types of collection cases (e.g., non-streamlined installment agreements, claiming economic hardship… ).

4. ALE standards are used by the IRS to calculate a taxpayer’s monthly expenses, which in turn affects the resolution of the taxpayer’s case because it reflects how much he or she can afford to pay the IRS. ALEs cover common expenses such as food, clothing, transportation, housing, and utilities.

5. The Taxpayer Advocate identified the following problems with the current ALE standards:

a. “The standards are based on what taxpayers pay, not what it costs to live. And since many of the IRS standards are based on average expenditures, there is a chance the taxpayer’s expense is greater than the survey average.”

b. “Spending habits are not consistent over income levels. For instance, while housing costs now account for about 25 percent of a family’s pre-tax income, among low income renters, some may spend up to half of their pre-tax income on rent.”

c. “The ALE standards are outdated and should include all expenses necessary to maintain the health and welfare of households today, including an allocation for digital technology access, child care, and retirement savings.”

d. “The IRS decreased the amounts for some of the expenses in 2016 based on its belief that expenses are going down. This was done despite the fact that the IRS and TAS reached a joint agreement in 2007 saying “the allowance amount for any ALE category cannot be decreased unless something economic changes significantly, such as a major sustained recession or depression.” Even with TAS’s concerns with the IRS decision last year, the IRS again decreased ALE standards in 2017. All of our research shows that costs are going up. More importantly, the average taxpayer is facing more financial strain.”

e. “Until there is improvement, the ALE standards won’t truly capture what it costs for a taxpayer to pay for basic expenses. And any taxpayer who is unable to resolve their tax debt will be vulnerable to IRS collection action otherwise prohibited by Congress.”

Read More HERE

September 14, 2017

Government Corruption – ATF

Filed under: IRS Abuse, Misuse, and Taxpayer Rights Violations — Administrator @ 10:38 pm

ATF got raided – slush fund – government corruption.
Read here

September 13, 2017

Only the “little” people get prosecuted

Filed under: IRS Abuse, Misuse, and Taxpayer Rights Violations — Administrator @ 9:59 am

Top IRS Official not prosecuted for crimes. Listen to Judge Nepolitano:

September 6, 2017

Federal Payment Levy Program: The New IRS Automated Levies on Military Retirement Payments May Be Harming Veterans Experiencing Economic Hardship.

Federal Payment Levy Program: The New IRS Automated Levies on Military Retirement Payments May Be Harming Veterans Experiencing Economic Hardship.

The Taxpayer Advocate has reported on the above in a two part series.

The Taxpayer Advocate expressed concerned about a recent IRS change in its policy regarding adding military retirement payments as a payment stream to the Federal Payment Levy Program. Under this program, an automated system identifies taxpayers with unpaid tax liabilities who receive certain payments from the federal government. A continuous levy for up to 15% of federal payments due these taxpayers can be made for the unpaid federal liabilities.

This IRS policy change has not been widely publicized.

The Taxpayer Advocate states, in part:

“I am deeply concerned that the IRS has decided to target retired service members, not long after recent military engagements in Iraq and Afghanistan have decreased in intensity. Serving in the United States Armed Forces requires years of tremendous sacrifice, challenging and dangerous assignments, frequent moves across the country, long separations from family, and fairly meager pay. Whether viewed as the sole means of income or a reward from the U.S government for serving 20 years in the Armed Forces, a service member’s retirement pay should not be considered another automatic FPLP funding stream.”

The Taxpayer Advocate advises that the IRS’s data provided as justification for its actions are inaccurate and misleading.

The Taxpayer Advocate concludes in stating:

“…I therefore find it baffling that he IRS refuses to apply the LIF [Low Income Filter] to military retirees who may be experiencing economic hardship.

… I am disappointed the IRS has refused to adopt the recommendation to run all military retirees through the LIF [Low Income Filter] and believe its failure to do so will cause the agency to issue a significant number of levies it will be required by law to release because of the taxpayer’s economic hardship.

… military retirees are an easy target for the IRS because retirement benefits are an easily identifiable levy source. By cherry-picking retired service members’ pensions for automated levies without taking into consideration individual taxpayers’ facts and circumstances, the IRS violates these taxpayers’ right to fair and just tax system, right to be informed, and right to quality service. (See Taxpayer Bill of Rights (TBOR)).”

You can read the Taxpayer Advocate two part series HERE.

August 22, 2017

IRS Targeting of Groups …

Filed under: IRS Abuse, Misuse, and Taxpayer Rights Violations — Administrator @ 5:04 pm

Source: The Washington Times – Thursday, August 17, 2017

A federal judge on Thursday ordered the IRS to name the specific employees the agency blames for targeting tea party groups for intrusive scrutiny and said the government must prove it has ceased the targeting.

Judge Reggie B. Walton also said the IRS must explain the reasons for the delays for 38 groups that are part of a lawsuit in the District of Columbia, where they are still looking for a full accounting of their treatment.

Judge Walton approved another round of limited discovery in the case and laid out six questions that the IRS must answer, including the employees’ names, why the groups were targeted and how the IRS has tried to prevent a repeat.

At a hearing earlier this week, Judge Walton said it was time to get everything on the table.

“Lay it on the line. Put it out there,” he told attorneys for the IRS, who are continuing to fight some tea party groups’ demands for full disclosure.

The targeting scandal burst open in May 2013 when the IRS admitted it had been pulling conservative-leaning groups’ nonprofit status applications out of the usual processing queue and subjecting them to extra scrutiny and extraordinary delays because of perceived political activity. [read more here]

See Judicial Watch Press Release regarding filing suit here

Judicial Watch Obtains 695 Pages of Obama IRS Scandal Documents – Records Not Produced in Initial Congressional Investigation (here)


August 21, 2017


Filed under: IRS Abuse, Misuse, and Taxpayer Rights Violations — Administrator @ 12:43 pm

The TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION has issued its July, 2017 report concerning The Internal Revenue Service Continuing to Rehire Former Employees With Conduct and Performance Issues. The report is dated July 24, 2017 (Reference Number: 2017-10-035).

The report advises: “Given the substantial threat of identity theft and the magnitude of sensitive information that the IRS holds, hiring employees of high integrity is essential to maintaining public trust in tax administration and safeguarding taxpayer information.”

The findings of the report were: “…While most employees who are rehired do not have prior conduct or performance issues, TIGTA found that more than 200 (approximately 10 percent) of the more than 2,000 former employees who were rehired between January 2015 and March 2016 were previously terminated from the IRS or separated while under investigation for a substantiated conduct or performance issue. More than 150 of these employees (approximately 75 percent) were seasonal. Four of the more than 200 employees had been terminated or resigned for willful failure to properly file their Federal tax returns; four separated while under investigation for unauthorized accesses to taxpayer information; and 86 separated while under investigation for absences and leave, workplace disruption, or failure to follow instructions. This includes positions with access to sensitive taxpayer information, such as contact representatives.”

It is clear that hiring employees of high integrity is essential to not only maintaining public trust in tax administration, but also safeguarding taxpayer information.

The Treasury Inspector General Report shows that the IRS is continuing to hire employees with a history of unauthorized access to taxpayer information, failure to follow instructions, and workplace disruptions. …. Such actions are in direct contravention of the Taxpayer Bill of Rights. For example, this is a threat to, inter-alia, a taxpayer’s Right to Privacy, and Right to Confidentiality (…”Taxpayers have the right to expect appropriate action will be taken against employees, … who wrongfully use or disclose taxpayer return information…”).

The TIGTA report also found that:

“27 former employees failed to disclose a prior termination or conviction on their application, as required, and were rehired by the IRS. … , TIGTA has serious concerns about the IRS’s decision to rehire certain employees, such as those who willfully failed to meet their Federal tax responsibilities.”

The TIGTA report states: “In reviewing prior IRS employment issues associated with rehired employees, we considered some of the issues to be significant. In addition, we noted that applicants with prior IRS conduct and performance issues sometimes repeated past behaviors within 19 months of returning to work at the IRS. … Given the substantial threat of identity theft and the magnitude of sensitive information that the IRS holds, hiring employees of high integrity is essential to maintaining public trust in tax administration and safeguarding taxpayer information.”

Citation is made to a previously issued TIGTA report which had likewise found that the IRS had been hiring prior employees with substantiated conduct or performance issues.

A Table of Examples of Significant Prior IRS Conduct Issues for Rehired Former Employees shows multiple categories, including the rehiring of former IRS employees who had Falsified Employment Forms, Official Documents, or Unofficial Documents. Two rehired employees had repetitively falsified employment forms by omitting prior convictions or terminations. One rehired employee had several misdemeanors for theft and a felony for possession of a forgery device, and another rehired employee had threatened his or her co-workers.

So, you are advised by the IRS that your information is secure, that you are to provide all of your information, and as far as personal security when at an IRS office – just trust the government. After all, you don’t know anything about the IRS employee, but the IRS does.

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