Tax Roundup, 10/7/2013: Not everything the IRS auctions is as glamorous as the Chromaro. And another Tax Fairy sighting!

October 7th, 2013 by Joe Kristan

Last week we mentioned the Chromaro, a toy seized by the government from a man who tricked out a Camaro with proceeds stolen from the IRS via identity theft refund fraud.  It will eventually be auctioned off to help recoup a small fraction of the stolen money.

The IRS Auction site lists other items the IRS has received from hapless taxpayers, many of which may be more difficult to unload than a Chromaro.  For example, this “Small Town Establishment – Bar/Lounge, 1,764 SF” in Blue Grass, Iowa, “Locally known as 202 W. Mayne Street, Blue Grass, Iowa”:


202 W. Mayne Street, Blue Grass, Iowa. IRS image.


Not nearly as shiny as the Chromaro.  Googling the street address generates the result “Harley’s Bar & Grill,” which probably means that it’s not a clubhouse for Kawasaki owners.  Whatever the clientele, it’s not nearly as shiny as the Chromaro.



Kay Bell,  Audit target? You’re getting a bit of a shutdown break

Janet Novack, Can’t Stop The Machine: During Shutdown, IRS Computers Still Churn Out Tax Liens, Levies And Bills: 

The IRS sends out more than 2 million entirely automated  “math error” notices a year telling taxpayers they made an arithmetic error, omitted a kid’s Social Security number, claimed a credit incorrectly, or otherwise did something the IRS considers a mistake.  These computer generated notices are “summary assessments”—meaning the taxpayer owes the extra money unless he contacts the IRS within 60 days to clear up the issue and to preserve his appeal rights. Good luck with that. No one is answering the phone or reading the mail at the agency.

Funny how it is essential to kick old people out of their private homes just because they are on government land, but it is also essential to not lift a finger to help taxpayers receiving erroneous tax notices from robots.


David Cay Johnston, The Importance of Tax Tribunals (via the TaxProf).  Iowa has a poor system of tax appeals that is stacked against the taxpayer, but even Iowa’s flawed system is better than that in many states.  The real answer is a dedicated Iowa tax court to enable Iowans to have their tax cases heard by judges who actually know a little about taxes.


Jack Townsend, To Opt Out or Not to Opt Out – That is the Question.  It refers to the IRS offshore “amnesty” program.

Leslie Book,  Court of Federal Claims Holds that Agent’s Fraud Does Not Extend Statute of Limitations (Procedurally Taxing)

TaxGrrrl, Lauryn Hill Leaves Prison Early, Releases New Single All In 24 Hours   


tax fairyPeter Reilly, Unveiled God Needs A Lawyer In US District Court :

There is a concept that my blogging buddy, Joe Kristan, calls the Tax Fairy – “the magical sprite that can make your taxes go away with fancy tax footwork”.  Corporation Sole has been a Tax Fairy wannabee for a while.

But, as Peter notes, there is no Tax Fairy.



Russ Fox,  Yet Another Reminder that a License Doesn’t Always Mean Ethical Behavior

The idea that just because people have licenses that they will all suddenly go the straight and narrow is laughable. There were tax crimes years ago; there will be tax crimes in the years that follow…licensing or not.

But with licenses, the government gives the cheater a seal of approval.


Lyman Stone,  The Vicious Cycle of New Jersey Property Taxes (Tax Policy Blog)

TaxProf, The IRS Scandal, Day 151

The Critical Question:  What’s the Matter with Oregon’s New Tax Deal?  (Tax Justice Blog)


News from the profession: Accounting Student Struggles with Love, Money, Blemish of Unknown Origin (Going Concern)



The income tax, the Ultimate Swiss Army Knife of public policy.  Flickr Image courtesy redjar under Creative Commons license.

The income tax, the Ultimate Swiss Army Knife of public policy. Flickr Image courtesy redjar under Creative Commons license.

Brian Gongol

The Treasury Department does a lot of things, but the original Treasury Act of 1789 didn’t say anything about a responsibility to the economy as a whole; instead, it charged the Treasury with making and keeping accounts by collecting taxes and other revenues and by managing how they are spent. At a time of government shutdown, perhaps it’s worth asking whether we’re keeping the Treasury occupied enough with its essential tasks, and not over-extending the scope of responsibility far more than is healthy for the department (and the country). Mission creep that grows to the extent that the Treasury Secretary thinks his primary job is to manage the economy (rather than to collect taxes and pay the nation’s bills) probably points us in the wrong direction. 

That’s a very diplomatic understatement of the problem.  The federal income tax law, just one subset of the Treasury’s portfolio, is designed to manage the economy in all kinds of ways.  A few, just off the top of my head:

Industrial research


Ethanol Production

Wind energy


College education

Subsidizing residential rents

Subsidizing home ownership

Subsidizing old buildings

And now, running the nations health care finance system.

The wisdom of the government in trying to do any of these things at all is at best debatable, and doing it all through the income tax is folly.  Yet the politicians continue to use the income tax as the Swiss Army Knife of public policy.  And like the Swiss Army Knife, if you add too many gadgets to it, it stops being very useful at anything.



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