On several occasions the U.S. Postal Service (Postal Service) attempted, albeit unsuccessfully, to deliver the 2006-2007 notice of deficiency to petitioner at the address of his Columbus Drive apartment. On at least two occasions the Postal Service left notices of attempted delivery of certified mail at that address. In those notices, the Postal Service informed petitioner that it had certified mail to deliver to him and that he had to sign a receipt for that mail before the Postal Service would deliver it to him.
The taxpayer never got around to doing so. Yet he still wanted to fight the deficiencies in Tax Court:
It is petitioner’s position that he is entitled under section 6330(c)(2)(B) to contest the underlying tax liability for his taxable year 2006. In support of that position, petitioner contends that although respondent mailed to him by certified mail, return receipt requested, the 2006-2007 notice of deficiency that was addressed to his Columbus Drive apartment, he did not receive that notice within the 90-day period during which he could have filed a petition with the Court with respect to that notice. In support of that contention, petitioner relies on his testimony at the partial trial in these cases.
There’s a 90-day deadline to file with the Tax Court, starting with the receipt of the Notice of Deficiency. The Tax Court enforces the deadline pretty strictly. And you can’t extend the deadline just by ignoring your mail:
On the record before us, we hold that petitioner may not decline to retrieve his Postal Service mail, when he was reasonably able and had multiple opportunities to do so, and thereafter successfully contend that he did not receive for purposes of section 6330(c)(2)(B) the 2006-2007 notice of deficiency. On that record, we reject petitioner’s contention that he is entitled under that section to dispute the underlying tax liability for his taxable year 2006.
Paul Neiffer, Is Low Section 179 Causing Low Equipment Sales?
Mixed message. From Tax Analysts ($link): “Taxpayers considering the IRS’s new streamlined filing compliance program need to think carefully about whether their actions were truly non-willful, because a certification that proves untrue could expose them to more charges from the Justice Department, Kathryn Keneally, former assistant attorney general for the DOJ Tax Division, said June 24.”
The Treasury just can’t quite get the hang of this. What taxpayers need is bright-line guidance that lets them come into compliance, at least below a relatively-generous dollar threshold. Instead they have to come in with their hands up, while the IRS reserves the right to open fire — to second guess their state of mind. That’s not necessarily very comforting.
But get past the shouting and two very important issues remain on the table: The first is the IRS has been terribly managed for years and needs to be fixed. It’s easy to forget, but that’s why Koskinen is there.
The second is that the commissioner appears undeterred in his efforts to rewrite the rules for 501(c)(4) non-profits that are engaged in political activities. That seemingly obscure effort will have an enormous impact on future U.S. elections and the balance of political power in the U.S.
This is chilling. And Mr. Gleckman seems to think it’s just an effort by a disintersted public servant to impose order on chaos:
Koskinen is under great pressure from liberal and conservative groups and from lawmakers on both sides of the aisle to abandon the effort. Don’t for a minute think that the House’s proposed $300 million cut in the IRS budget, its endless requests for IRS documents on multiple subjects, and even the email hearings themselves are not in part an effort to sink—or at least slow–these regulations.
Yet, Koskinen has refused to blink.
If you think Koskinen isn’t a partisan operative at the IRS, you haven’t been paying attention. All of the pressure to “reform” the (c)(4)s has come from the left. And it’s clear from the Tea Party targeting that the IRS can’t be trusted to regulate political actors evenhandedly. If Mr. Gleckman is right, Koskinen’s mission is not to help the IRS to recover from its scandalous practices, but to institutionalize them.
TaxProf, The IRS Scandal, Day 412. About 40 links today, primarily on Commissioner Koskinen’s appearance before Congressional investigators and related missing e-mail developments. It’s hard to imagine how this Commissioner could do a worse job at coming clean and improving IRS relationships with GOP congressional appropriators.
Jonathan Adler, IRS agrees to pay non-profit group $50,000 for unauthorized release of tax return. But nobody will lose their job, and the $50,000 won’t come out of any individual perpetrator’s pocket. In fact, the leaker gets to maintain his/her anonymity, and presumably employment too. And even though it was an illegal, and presumably partisan, disclosure of taxpayer information, the Justice Department isn’t going to investigate.
TaxGrrrl, Lois Lerner And The Case Of The Missing Emails. “Yes, that’s right: the IRS used the same backup strategy for its important data that I used to record my soap operas in college.”
Russ Fox, Koskinen Channels His Inner Nixon. “The IRS continues to look hyper-partisan, and that’s not a good thing for anyone.”
The Hill, Archives official: IRS didn’t follow law on missing emails. But Commissioner Koskinen says no apologies are in order, so stop bothering him.
Accounting Today, AICPA Says IRS Voluntary Tax Preparer Certification Program Is Unlawful:
The AICPA’s letter emphasizes the following points:
• First, no statute authorizes the proposed program;
• Second, the program will inevitably be viewed as an end-run around Loving v. IRS, (a federal court ruling rejecting an earlier IRS attempt to regulate tax return preparers);
• Third, the IRS has evidently concluded, in developing the proposed program, that it need not comply with the notice and comment requirements of the Administrative Procedure Act. This is incorrect; and
• Finally, the current proposal is arbitrary and capricious because it fails to address the problems presented by unethical tax return preparers, runs counter to evidence presented to the IRS, and will create market confusion.
Not that being illegal will bother them; see above.
Arnold Kling, In Our Hands. Mr. Kling discusses his idea for replacing all means tested welfare programs like the Earned Income Credit with a universal voucher: “Keep in mind that under current policy, many low-income households face effective marginal tax rates of 100 percent or higher. That is, they are better off with something less than full-time, year-round work.”
David Brunori, A Bad Law Addressing a Bad Business Tax (Tax Analysts Blog)
Local option business taxes, whether imposed on income, gross receipts, or personal property, are terrible ways to raise revenue. Only 14 states authorize their use, and they raise a paltry sum compared with the property tax or even local option sales and income taxes. Virtually all the public finance experts who have studied the issue denounce their use.
Of course, Iowa has lots of these.
Sydni Pierce, Congress, Take Note: More States Are Reforming Antiquated Fuel Taxes This Summer (Tax Justice Blog)
Andrew Lundeen, Obamacare Increases Marginal Tax Rate on Labor by Six Percentage Points (Tax Analysts Blog). “In the case of the Affordable Care act, Mulligan is talking about implicit marginal tax rates, or ‘the extra taxes paid, and subsidies forgone, as the result of working.'”
Tags: Adrienne Gonzalez, Andrew Lundeen, Arnold Kling, David Brunori, Howard Gleckman, John Koskinen, Jonathan Adler, Judge Chiechi, Paul Neiffer, preparer regulation, Sydni Pierce, tax court, TaxGrrrl, TaxProf