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P.O. Box 476
Schaller, IA 51053
IRS Strategic Plan Through Fiscal 2017
Here is what to expect when you make your initial contact
with Your IRS Problems Solved®:
VOL 1 ISSUE 2
4 1
Every five years the IRS issues a Strategic Plan (SP)
setting forth the strategies and tactics it intends to employ
to enforce tax collection. My approach to the column for
this issue diverges from the usual in that I will be relying
heavily on a newsletter written by my colleague Dan Pilla.
Dan is one of the top tax experts in the country. He has
written numerous books on the subject of taxes. The
Associated Press has noted that he probably knows more
about the tax law than the IRS commissioner. He has
testified before Congress and has been influential in drafting
tax laws that help protect us from an overly zealous IRS. I
will attempt to highlight the more significant points that
Dan makes in his newsletter Pilla Talks Taxes, the January/
February 2015 issue. However, Dan has packed so much
important information in this issue that he has given me
permission to make the entire newsletter available on our
website www.buckcpa.com. If you are even moderately
interested in how the IRS plans to “attack” us during the
duration of this SP, I strongly recommend that you read
the complete newsletter there. Some of the language used
by the IRS is truly frightening. Please note that unless
otherwise indicated, areas in quotation marks are direct
quotes from Dan’s newsletter.
Over the past few decades there has been a real tug-of-war
over whether “service” or “enforcement” should be the
larger goal of the IRS. “Service” is part of the name of this
organization, but, unfortunately, we find ourselves in
an era where enforcement receives the overwhelming
attention and financial resources provided by Congress.
The vast majority of us citizens are law-abiding, even when
considering income taxes. We are willing to abide by the
law – IF WE COULD ONLY UNDERSTAND WHAT
THEY WANT FROM US. There has been much in the news
recently indicating that actually getting a response from the
IRS when seeking information will reach the lowest levels
seen in many years. The suggestion is that less than 50%
of phone calls to the IRS will even be answered. We tax
professionals have had a special number we can call to help
our clients resolve tax issues however, even that line is
subject to go unanswered for extremely long periods of
You will provide some contact information
to our phone receptionist.
You might be requested to provide (via our
secure server) copies of certain documents
you have received from the IRS (or state
taxing authorities) so we can review them
before our phone consultation
A phone appointment will be set for a mutually
acceptable time in the next day or two
At the appointed time you will phone and be
provided a free initial conference with Tom
Buck, CPA. The purpose of this conference is
to discuss, in enough detail, your particular
problem with this single purpose in mind
– deciding whether we can help you
resolve your problem.
Over many years of helping people with IRS problems,
I have learned how to define a tax problem pretty quickly
and then determine what the outcome ought to be based
on our understanding of the tax law. Once we are confident
what the outcome should be, we do everything necessary
to make that outcome a reality.
It is important for you to know that there are some
cases we do NOT take because the case can’t be won and
we will not put the taxpayer in a worse position by taking
their money when we can’t offer any significant help. Our
goal is this —that we are able to get the relief the taxpayer
needs and, often, have the cost of our services paid for
by the savings we help create.
“Defending our fellow citizens against their government
by making sure the IRS obeys the rules.”
Tom Buck, CPA
Donna Cavanaugh, EA O: 888-364-4496
F: 888-364-4496
March/April 2015
time (often hours). “Even while the tax laws are getting
more complicated every year the IRS’s clear focus is on
after-the-fact enforcement, rather than helping people
comply in the first place.”
In this SP you will learn that the IRS believes, among other
things that you are a tax cheater, that it needs ever
increasing amounts of information about you, that this
information must be provided not only by other
governmental agencies, but also information from foreign
governments AND that it must increase audit and
investigative activities in every area.
You will find the IRS broke this SP into two major sections:
1. “Deliver high quality and timely service.”
Dan’s comment: “The IRS talks a good game throughout
its SP regarding taxpayer service, but the facts betray
something much different.” The IRS blames lack of
funding by Congress for its low levels of service, but
“…the truth is the agency makes the conscious choice
to put taxpayer service well behind enforcement when
it comes to resource allocation.” You should read the
entire newsletter to get the full picture, but here are
some observations made by the National Taxpayer
Advocate in her 2014 report to Congress:
“The IRS is unlikely to answer even half the
approximately 100 million phone calls it receives
Citizens who do get through will experience extremely
long hold times IRS eliminated tax return preparation
assistance altogether IRS will answer far fewer tax law
questions than in the past. The agency will answer no
tax law questions after April 15 leaving those who file
later in the year simply ‘on their own.’”
About three of the eight pages of Dan’s newsletter deal
with the misnomer of IRS “service”. Essentially – there
ain’t none. (Continued on Page 2.)
–
Read all of Dan Pilla’s article by visiting:
www.yourirsproblemssolved.com.
Do open all mail from the IRS - ignore it at your eventual peril!
Don't respond to the IRS without seeking the advice of a tax professional first - only exception
is to inform the auditor that you have appointed a Power-of-Attorney representative.
Don't meet with the IRS personally - in almost every case, we do not ever allow our clients
to speak with the IRS, even with us present.
Don't try this at home - the old adage that the lawyer who represents himself has a fool for a
client holds true when the IRS is after you. Later I'll share my own IRS audit experience with
you. The first thing I did when I received my audit notice was to hire the best tax attorney I
could afford. You owe it to yourself to contact us first, so that we can guide you—before
you make a decision that could cost your dearly.
Comments and Suggestions Visit our website for even more tax-related content!
Do open all mail you receive from the IRS - do
this and you will never get that nasty notification
that the IRS is taking your bank balance or part
of every paycheck.
Do open all mail from the IRS (this is important
enough to repeat) - IRS will make numerous
attempts by mail to get your attention. These
are opportunities to learn exactly what the IRS
is up to. HOWEVER, navigating these IRS waters
can be problematic even for experienced
professionals - get help.
Do contact Your IRS Problems Solved® for a free
consultation to determine if we can help you. If
you have no options, we will tell you that the IRS
has you by the short hairs and not take money
from you if we can't help. In most cases there is at
least one solution that will pay for itself. We take
you through the entire process and don't quit until
we get what we told you the result would be.
Your comments and suggestions on ways that we can make this
newsletter more useful to you are welcome. We also invite you to
visit us at: www.yourirsproblemssolved.com. Our website is updated
regularly with fresh information on a myriad of tax topics. If you leave
your email address, you will be notified whenever we post new material.
Space within this newsletter is a bit limited sometimes there will
be topics which require more space than we can devote to them here.
In that case, we will try to give a short, executive summary and invite
you to the website for a more complete treatment.
As a final note, if you have acquired a physical copy of this newsletter
but would rather have it emailed to you, simply send your request to
[email protected]. To opt out of receiving the newsletter
entirely, send an email to the same address.
2 3
For when you get an IRS letter notifying that you have been chosen for an IRS audit:
IRS Levies and Liens
Dos and Don’ts For when your banker or employer tells you they have
to send your money to the IRS:
2. “Effectively enforce the law to ensure compliance with
responsibilities and combat fraud.”
Dan observes that at the end of the day, the IRS is an
enforcement agency. Its idea of helping people comply with the
law has moved strongly toward implementing and enforcing an
ever-increasing number of penalties (whose amounts are also
increasing regularly). “There are over 170 different penalty
provisions in the tax code. These provisions are used millions
of times each year against individuals and businesses.” Here is
an extremely important point: “I have always maintained that
the failure to comply is more about the lack of knowledge that
it is the intent to evade or defeat the payment of taxes.”
Under this SP the IRS intends to challenge the income
reported on a tax return rather than the deductions. Why
should this matter to you? Dan calls this “…the economic
reality or lifestyle audit. This is an audit approach concentrated
on your lifestyle as a means of judging whether you reported all
your income… That is to say, they will question directly
whether your lifestyle is consistent with the income reported
on your tax return, including investigating whether that lifestyle
suggests you earned more than you reported.” It’s not difficult
to note how this approach is likely to lead to arbitrary
decisions on whether you should be subjected to an IRS audit.
The SP specifically states: “we recognize that widely
publicizing timely enforcement actions can have a deterrent
effect, preventing taxpayers from becoming non-compliant
in the future.” Remember Joe Louis, Willy Nelson, Leona
Helmsley, Redd Foxx, Wesley Snipes and other well-known
citizens whose IRS problems were widely publicized? However,
it gets even scarier than that as the SP goes on to state: “… the
IRS is working to ‘reward people who disclose taxpayers that
fail to pay the taxes they owe.” To me, this is too strong a
reminder of past totalitarian regimes (think Nazi Germany)
IRS Strategic Plan Through Fiscal 2017 (continued from Page 1) which encouraged citizens to report against their friends and
neighbors. “Imagine the notion of Americans terrified of the
idea of running afoul of the IRS and at the same time, terrified
that their own neighbors may be spying in the hope of receiving
a reward. Is this really the kind of tax system we want to
encourage?” I would add – Is this really the kind of America
that any of us wishes to live in?
In light of this it is astonishing that the SP includes a
provision that it intends to “build and maintain public trust.”
In conclusion, as I once again strongly recommend that you
read this newsletter in its entirety, I quote Dan’s observation
that you need to be prepared to defend yourself. “Make no
mistake about it. This is an all-out attack on your financial life.
The IRS believes you are a tax cheater. They are working
tirelessly to track and assimilate your every financial move,
both business and personal. They will use that information
against you at every turn, attempting to justify the claim that
you earned income you did not report. The IRS will attempt
to put the burden on you to prove a negative…” just exactly
how do you go about proving that you have reported ALL
of your income?
I leave you with the reminder of our business motto (cited
frequently in this column) – Defending our fellow citizens
against their government by making sure the IRS obeys the
rules. I never expected that we citizens would have so much to
fear from our government and how much “defending” we might
all need in the future.
P.S. Dan Pilla founded and heads up the Tax Freedom
Institute, of which I have been a proud consulting member for
almost twenty years. Consulting members are comprised of
attorneys, CPAs and EAs who specialize in helping taxpayers
who have IRS problems. Become a non-consulting member or
sign up for Dan’s newsletters at www.taxfreedominstitute.com.
Audit Dos and Don’ts
We always recommend that our clients retain copies of
their tax returns for ever. They don’t take up much space
and you can never tell when they might come in handy. My
usual rationale is that you might want to go back and see
during what year some event in your life occurred – like
what year did we sell that house or some such.
Today we had a call from a person in California who has
a tax problem. The State tells him that he needs to file tax
returns for his small business for the years 1991, 1992 and
1993. We would never have thought that ANY taxing
authority would be looking for tax returns that far back. By
and large, even if you haven’t filed tax returns with the IRS
for many years, they will only require you to go file back tax
returns for six years. Going back twenty-five years is unheard
of – although in our experience, the California Franchise Tax
Board can be real hard noses.
From the sound of things, if this poor fellow can’t produce
copies of those ancient returns, the State will go after him for
$50,000+ they say he owes. We do not know at this time
whether he actually filed the returns in question (please
remember that if a tax return is not filed, the statute of
limitations never even starts to run). However, assuming that
he did, but cannot prove it, the result will be the same and he
will owe the State. So the moral of this story is – keep you
copies of tax returns forever – they could save you major
headaches in the future.
Why Keeping Old Tax
Returns Shouldn’t Be a
Thing of the Past
…