Tax Representation and Resolution from Tax Masters Patrick Cox

The recent commentary about tax law changes and tax law enforcement budget increases coming from the White House has many in big business stopping and taking note. The implications of changing how the IRS taxes multinational companies will mean a good deal of work for staff and contract accountants all across the nation. Doubling the budget for IRS enforcement activities in a single year and adding almost 800 new agents will invariably increase audits, levies, liens, garnishments, and yes, collected revenue. You probably saw that President Obama had several things to say about taxes and the IRS over the last two weeks. We were particularly struck by the following quote.

“If financial institutions won’t cooperate with us, we will assume that they are sheltering money in tax havens, and act accordingly. And to ensure that the IRS has the tools it needs to enforce our laws, we’re seeking to hire nearly 800 more IRS agents to detect and pursue American tax evaders…”

Guilty Until Proven Innocent? 

I had to do a double take when I saw this quote from the president’s remarks from the White House on May 4, although I will say that we have seen the IRS getting even tougher since the election and the White House messaging plays into that trend. The implication of an IRS that assumes guilt until the taxpayer proves innocence harkens back to the IRS feared by so many before RRA ’98 was passed into law. Don’t get me wrong. Everyone should pay their taxes, even multinational conglomerates. However, the implication that these companies are defrauding the government of money seems odd, especially when it is the very rules put in place by current tax law that allow these multinational companies to establish systems that keep them from being double- or triple-taxed by multiple governments. Regardless of the merits of the proposed tax law changes, the fact is that many of these multinational companies will be very busy over the next year or so figuring out how to get around whatever language finds it way into the new laws. And when the 800 agents hired to chase these companies can get no traction, guess where they are going to turn their attention.

Focus on the Middle and Working Classes

Being in the tax resolution business, we know that IRS agents tend to go after low-hanging fruit first. In the world of tax evasion, back taxes, tax debt, and audits, it is generally far easier to allege and collect tax debt from those who cannot afford to hire tax help. This is in no way a judgment against the IRS, but rather an observation. When these new 800 agents get up to speed and realize how difficult it’s going to be to fight accounting staffs at multinational conglomerates, they’re going to need some easy wins to balance their case load. And we fear that they’ll turn to the middle class and working class tax offenders in short order.

Congress to IRS Commissioner–Shrink the Tax Gap

We are extremely concerned about how a growing deficit, unprecedented tax gap, and planned budgetary increases for IRS collections will effect our typical client and the common American. I had the fortune of speaking with a respected Senator this week who sat on the confirmation committee that eventually voted to confirm former IRS Commissioner Mark Everson. I mentioned to him that the days of a kinder, gentler IRS seem to have ended. The Senator agreed and shared with me that in the confirmation hearings, Everson had been told in no uncertain terms that it was his responsibility to enforce the law and that Congress expected him to figure out how to shrink the tax gap. That was in 2003. The six years since Everson’s appointment have been tumultuous for the IRS, but one thing is certain given the recent focus on enforcement–the IRS is ramping up to increase its ability to locate and collect additional tax revenue.

Tax Masters–A Step Ahead

That’s where Tax Masters comes in. We are here to help taxpayers who encounter IRS abuse and who cannot afford to pay the IRS what they owe. We are extremely successful at what we do because we know the law, pay attention to trends and changes in the IRS, and use what we know to keep our clients a step ahead of aggressive collections actions.

If You Have a Tax Problem, Tax Masters Can Help

My advice today is simple and direct. If you have a tax problem, now is not the time to sit back and wait for tomorrow. Given the president’s proposal of doubling the tax law enforcement budget in a single year and quadrupling funding for tax compliance to $2.1 billion over the next five years, it’s clear that this administration plans to fund the Congressional mandate to collect the tax and enforce tax law. Acting before the IRS hires more agents and implements new strategies for locating and collecting additional tax revenue can keep you out of more serious trouble. Compliance is the key. Contact us today and let us help you solve your tax problems before they escalate any further.

Until you need us,

Patrick Cox Tax Masters