As the world slows down for summer, so does the IRS scandal. The TaxProf has only a half-dozen items in yesterday’s daily roundup of IRS scandal stories. Where are we at?
There’s no smoking gun, like an e-mail from President Obama to Doug Shulman telling him to thwart the Tea Party. The mystery now appears to be the level of involvement of IRS personnel in Washington, who appear to have closely monitored the handling of the Tea Party 501(c)(4) applications, while left-leaning applications flew through the system. While some folks are in a hurry to bury the issue, there are plenty of remaining issues, as Eliana Johnson recounts:
Who at the IRS, for instance, developed the intrusive and exhaustive questions that were sent to the tea-party groups? Why did so many of those groups have to wait years for their applications to be processed, and why are many more still waiting? Who specifically were the IRS officials in Washington directing the Cincinnati agents targeting the tea-party organizations?
It’s also become clear that the political culture of the IRS was hostile to Tea Parties at the top levels. IRS defenders have pointed to Doug Shulman’s status as a Bush appointee as evidence of IRS neutrality, but it turns out that he has a long left-side political history. The same goes for Holly Paz, a high-ranking IRS lawyer who had a key role in overseeing the non-approval process. The best argument that can be made on behalf of the agency is that because the political culture was so far to the left, they didn’t realize how biased they were being — they actually could have believed Tea Party applications were political, while “progressive” ones were just good people trying to do good things. That hardly inspires confidence.
While former Commissioner visited the IRS a lot — the exact number of visits isn’t clear, but it was more than Shulman could precisely remember — it appears his t0p aide went to the White House 2 or 3 times weekly. It’s hard to imagine that slow-walking Tea Party applications would require that level of Administration involvement, but it does show a disturbing level of day-to-day administration involvement with the workings of the tax agency. It best, it reflects how the IRS has become a multi-portfolio superagency stretching across the government, which is a terrible thing by itself.
Andrew Mitchel, Mandatory Electronic Filing for FBARs Coming Soon. Remember, they are due this week. The Treasury (inexcusably) says the timely-mailed, timely-filed rule doesn’t apply to foreign financial account disclosure filings, so you should mail them by today to beat the June 30 deadline.
- In a stunning reversal of course, the U.S. Tax Court has agreed with the IRS that the signing of a CRP contract coupled with compliance with the contract provisions (whether personally or via an agent) results in the party signing the contract being in the business of participating in the CRP and engaging in an “environmentally friendly farming operation.” The result was that the CRP payments were subject to self-employment tax.
Paul Neiffer, Your CRP Income May Be Subject to SE Tax: “Under the ruling of this case, it appears that almost any farmland enrolled in CRP will be subject to SE tax (at least in the Eighth Circuit) unless the case gets appealed and overruled which may take a
couple of years to resolve.”
Jason Dinesen, Commentary on the IRS’s E-Services Decision:
The IRS says few practitioners are using E-Services (I think they said only 10% of power of attorney requests come through that system).
Still, in the year 2013, it seems more logical to encourage more practitioners to use E-Services instead of closing it down and taking away the electronic option completely.
Yet another bad IRS decision. Meanwhile, TaxGrrrl reports that Defying Directive, IRS Set To Pay Out $70 Million In Employee Bonuses. Priorities.
Christopher Bergin, Another Bad Day for the IRS (Tax Analysts Blog)
William Perez, Small Business Week: Deducting Health Insurance Benefits
Peter Reilly, Tea Party Patriots — Federalist Papers — Really ?
Tax Policy Blog, Tanning Tax Not So Hot
Tax Justice Blog, A Reminder About Film Tax Credits: All that Glitters is not Gold
Kim Reuben, Andrew Cuomo’s Lesson in What Not to do With Rising Tax Revenues (TaxVox)
Robert D. Flach, TAX RETURN ERRORS:
Using a tax preparation software package is no substitute for knowledge of tax law. This applies to paid preparers as well as individual taxpayers. I sometimes wonder how many alleged tax professionals, especially those employed by the “fast food” tax preparation chains, are really nothing more than data entry clerks.
Garbage in, garbage out.
The Cubs losing ways: IRS Continues Its Scrutiny Of Leveraged Partnerships: 2009 Sale Of Chicago Cubs Finds Itself In Service’s Crosshairs Fortunately for Cubs fans, it’s the seller’s problem.
Good luck with that. Billionaire Seeks $186 Million Tax Refund, Claims IRS Biased By ‘Politically Charged Atmosphere’ (Janet Novack)
Gee, who saw this coming? Governor signs bill paying off Honey Creek Resort debt. Operating resorts is one more thing the State isn’t very good at.