IRS Incompetence

Yes... this is the agency that will enforce and administer obamacaid compliance. Congratulations comrades.

http://www.accountingtoday.com/news/irs-watch/irs-urged-crack-down-improper-eitc-actc-payments-72971-1.html

While the IRS is required by law to quantify or identify and take actions to address the root causes of improper payments in federal programs identified as being at high risk, it has only acknowledged one program—the Earned IncomeTax Credit program—as being at high risk for improper payments, the report from the Treasury Inspector General for Tax Administration noted. However, TIGTA’s report pointed out that the Additional Child Tax Credit is also at high risk of improper payments, although the IRS has not identified it as such. Using IRS data, TIGTA estimated the potential ACTC improper payment rate for fiscal year 2013 is between 25.2 percent and 30.5 percent, with potential ACTC improper payments totaling between $5.9 billion and $7.1 billion. In addition, IRS enforcement data show the root causes of improper ACTC payments are similar to those of the EITC. The IRS estimated that it paid $63 billion in refundable EITCs and $26.6 billion in refundable ACTCs for tax year 2012.

The IRS also estimated that 24 percent of all EITC payments made in fiscal year 2013, or $14.5 billion, were paid in error. The Earned Income Tax Credit and the Additional Child Tax Credit are refundable credits designed to help low-income individuals reduce their tax burden. While the IRS has developed processes to identify improper EITC payments and their root causes, it has not developed processes to quantify or identify the root causes of improper ACTC payments, according to TIGTA’s report. The EITC is used to offset the impact of Social Security taxes on low-income families and to encourage them to seek employment. The ACTC is used to adjust the individual income tax structure to reflect a family’s reduced ability to pay taxes as family size increases.

I have had many dealings with the IRS, and I can say that the IRS in my experience gets things right about 60% of the time. How would you like to go to a restaurant where they got 60% of your order right, and then when you were going to get change for your meal they could bring it back ranging from $160 to $40. I waited for a $25,000 refund for two years on utter incompetence of IRS employees to even have a cursory understanding of the tax code. Instead of fighting in Congress they should be doing their job. It starts with simplification of the tax code and all the benefits and loopholes to special interests who have written the tax code. When employees do not understand it, do not expect the average citizen to have a clue. When regular people need to hire a translator to do their taxes, the system is broken.

2seaoat wrote:I have had many dealings with the IRS, and I can say that the IRS in my experience gets things right about 60% of the time.  How would you like to go to a restaurant where they got 60% of your order right, and then when you were going to get change for your meal they could bring it back ranging from $160 to $40.   I waited for a $25,000 refund for two years on utter incompetence of IRS employees to even have a cursory understanding of the tax code.  Instead of fighting in Congress they should be doing their job.  It starts with simplification of the tax code and all the benefits and loopholes to special interests who have written the tax code.  When employees do not understand it, do not expect the average citizen to have a clue.   When regular people need to hire a translator to do their taxes, the system is broken.

I spent an entire summer dealing with the IRS over a trust account tax issue. Seems my aunt never bothered to file taxes on an account over which she was sole trustee (as opposed to the other accounts on which I received monthly statements and filed taxes religiously on behalf of my children. My aunt passed away, but I didn't know for months. After my daughter hired a Texas attorney and CPA firm, was appointed as successor trustee, and paid all the back taxes, the IRS assessed...not penalties, but INTEREST on penalties...in the amount of $16,000+. At that point, she could have asked for an advocate, and I strongly urged her to do so, but we were exhausted. In short, if it was necessary to assess penalties, those funds should have come from my aunt's estate, not from the trust funds she administered at Merrill Lynch. (The other accounts were jointly administered by Merrill Lynch and my aunt, which is why I received the statements and filed the taxes.) That would be bad enough, but there's still real property being "managed" by her daughter, who's just as loony or greedy as her mother, and who, I know for a fact, is filing fake P&L statements with the IRS.

2seaoat wrote: Instead of fighting in Congress they should be doing their job.  It starts with simplification of the tax code and all the benefits and loopholes to special interests who have written the tax code.  

I agree.  

I think a form of flat tax or simplified code is appropriate that cannot be toyed and played by politicians.  

No additions of tax credits.  Just a plain rate across the board.

Something as simple as 10% is understanding.  If you make $10 you pay $1.  If you make a $1,000,000  you pay $100,000.   All relative and fair.

Then it is the burden of Congress and the President to do the best with the people's hard earned money.

A flat tax would be a preservation of the current state of affairs and would make it more difficult for people who are trying to improve their economic situation...like recent college grads. What would you propose to do about passive income? What about depreciation? Do you see that taking 10% of $10,000 is not the same as taking 10% of $100,000? Do you see why?

I wonder how the country made it before there was an income tax?

Yes....I am being sarcastic.

Floridatexan wrote:
A flat tax would be a preservation of the current state of affairs and would make it more difficult for people who are trying to improve their economic situation...like recent college grads.  What would you propose to do about passive income?  What about depreciation?  Do you see that taking 10% of $10,000 is not the same as taking 10% of $100,000?  Do you see why?

The person making 10k doesn't have the same economic responsibilities of the person making 100k. Who in the hell makes 10k anyhow aside from high school kids?