The other day, I wrote about the IRS’s decision on its e-filing suppliers.  Remember, the IRS is not monitoring quality of its e-filing suppliers.  Stated differently, the firms that are listed on the IRS website as being able to help you with e-filing of tax returns, may be letting you use software that calculates the refund/amount owed incorrectly.  The IRS identified this risk, and decided to accept it.

What would the IRS say if taxpayers decided that they would scribble whatever they wanted in each box and turn it in?  Think about how the negotiation of that audit might look…

IRS:  Ms. Smith, how did you calculate the information for line 23 of your return?

Ms. Smith:  I didn’t.  Y’all made the rules too complicated for me to understand them so I decided to fill in whatever I want.  Isn’t that what your e-filing software suppliers did?  And, you are encouraging people to use those suppliers. 

IRS:  Ms. Smith, what happened with the e-filing software is beside the point.  We are here about your audit.  Do you realize that this is a very serious matter?  You are obligated to file an accurate return.

Ms. Smith:  Of course it is a serious matter.  You are taxing people, encouraging them to use firms that are delivering defective information, and citing administrative burden as justification.  Yet, when I cite administrative burden associated with calculating my taxes, you say that it isn’t relevant.  Is that fair?  Is it right? 

IRS:  It is the law.

Ms. Smith:  It may be the law, but might does not make right. 

A discussion like that could end up going no where fast…  No matter how that negotiation progresses, the IRS looks bad.  It seems to me that the relationship that the IRS has with taxpayers is harmed any time it holds itself to a lower standard than it establishes for taxpayers.  And, citing the law as an excuse may not play very well.   

Suppose that Sam Supplier is reading this article, what takeaways might he gain for dealing with Connie Customer?

Filed by Coleen Davis at 6:47 pm under Current Events, Negotiations, Planning Tips