Taxpayer Money Finances IRS “Star Trek” Parody (#GotBitcoin)
“Space: The Final Frontier
These are the voyagers of the Starship Enterprise. Its never-ending mission is to seek out new tax forms. To explore strange new regulations
To boldly go where no government employee has gone before.” Taxpayer Money Finances IRS “Star Trek” Parody (#GotBitcoin)
Thus begins a six-minute “Star Trek” parody starring IRS employees and paid for with your tax dollars. It’s not likely to go over well with some Americans and members of Congress, especially since federal agencies have been complaining that it’s difficult to find trims under forced sequestration.
CBS News filed a Freedom of Information request asking for the video after the IRS earlier refused to turn over a copy to the congressional committee that oversees tax issues: House Ways and Means. According to committee Chairman Charles Boustany, Jr. (R-LA), the video was produced in the IRS’s own television studio in New Carrollton, MD. The studio may have cost taxpayers more than $4 million dollars last year alone.
According to a statement from the IRS, the “Star Trek” video (see above) was created to open a 2010 IRS training and leadership conference.
“Back in Russia, I dreamed someday I’d be rich and famous,” says one crew member in the parody.
“Me too,” agrees another. “That’s why I became a public servant.”
And the two fist bump.
A separate skit based on the television show “Gilligan’s Island” was also recorded. The IRS told Congress the cost of producing the two videos was thought to be about $60,000 dollars.
IRS Acting Commissioner Steven Miller said in a statement that one of the two videos was played in 400 locations and saved taxpayers $1.5 million over what it would have cost to train employees in person.
Nonetheless, the IRS issued a statement that reads: “The space parody video from 2010 is not reflective of overall IRS video efforts, which provide critical information to taxpayers and cost-effective employee training critical to running the nation’s tax system. In addition, the IRS has instituted tough new standards for videos to prevent situations similar to the 2010 video.”
In response to the release of the “Gilligan’s Island” parody, the IRS said in a statement, “This approach reflects a newer IRS model of using video to dramatically save on training and travel costs. Using video provides a more cost-efficient way of doing business than face-to-face meetings.”
The IRS explained that the “Gilligan’s Island” segment is the introductory part of a 12-hour video training series for IRS employees.
“The 2011 series was used to train 1,900 taxpayer assistance employees in approximately 400 locations across the United States, saving an estimated $1.5 million as compared to the potential costs to train these employees in person,” the IRS statement said.
This week, Rep. Boustany called on IRS to give a full accounting of production expenditures at the television studio.
Last year, a controversial General Services Administration (GSA) video surfaced. In it, GSA employees sang and joked about wasteful government spending. It had been shown at a 2010 government convention. Several GSA officials lost their jobs over the controversy.
IRS Has 1 Million Unprocessed Returns And 3 Million Pieces Of Unopened Mail After COVID-19 Wreaked Havoc On Tax Season
‘Our employees went through the same exact thing as every other American during COVID,’ said IRS Commissioner Charles Rettig.
The Internal Revenue Service still has about one million 2019 tax returns to process after the coronavirus pandemic and distribution of millions of stimulus checks upended operations, the agency’s commissioner told federal lawmakers this month.
“We have done all that we can really do,” said IRS Commissioner Charles Rettig, talking to members of the House Ways and Means Oversight Subcommittee. He said the committee still hears from constituents who haven’t received their refunds this year.
The approximate one million still-unprocessed returns are down from 2.5 million unopened returns in October, the last time Rettig testified about IRS operations in a tax season like none other. There’s now 3 million pieces of unopened mail, down from 5.3 million.
There are currently 6.8 million returns in process — which, Rettig explained, are returns that have gone through the IRS systems.
“On behalf of the Internal Revenue Service and every employee, for literally every American, we appreciate the patience and understanding,” Rettig said. “This is not an excuse, but I will say that our employees went through the same exact thing as every other American during COVID with respect to health and safety concerns.”
The agency had 59,000 staffers teleworking this week, a record for the IRS, he noted. The IRS is offering weekend shifts and overtime to get the work done, he added.
Rettig addressed a subcommittee chaired by Bill Pascrell Jr., a Democrat from New Jersey. In his opening remarks, Pascrell said he had a constituent who heard from the IRS not to expect a response on a 2019 tax return until January 2021.
“January?” he asked, also noting there are still people who are waiting for stimulus checks.
Saturday, Nov. 21, marked final day for people who have not filed income taxes to register on the IRS nonfiler portal to get their $1,200 stimulus check ahead of next tax season.
IRS officials have reached out directly with more than 4,000 shelters to connect people who are homeless with their stimulus check, Rettig said.
The hearing comes two months ahead of Joe Biden’s start as president and Pascrell noted the IRS commissioner is a presidential appointee who can stay or go depending on the president’s determination.
Rettig, a Trump administration appointee, said he doesn’t plan to offer a resignation ahead of any request from the Biden administration to step down. Rettig’s term, on paper, runs through 2022.
Some observers doubt Biden would replace Rettig.
Pascrell asked Rettig to offer his resignation “to the incoming president to facilitate the transition to the new administration.”
The lawmaker was critical of Rettig for not providing President Donald Trump’s tax returns. The committee has sued for the tax returns in a case that’s gone up to the Supreme Court and been remanded to the lower courts.
Pascrell pressed Rettig if he would give Trump’s tax returns to the committee if he as asked to do so once the Biden administration takes over.
Rettig said he couldn’t discuss Trump’s tax returns because of pending litigation. “I cannot answer the question, sir,” he said.
IRS Funding Surge Punted From Bipartisan Infrastructure Package
Democrats still plan to fund major hiring boost for the tax agency in another measure.
n infrastructure package negotiated by a bipartisan group of senators and President Biden will no longer provide a funding surge to the cash-strapped Internal Revenue Service after Republican lawmakers balked at the proposal.
The bipartisan infrastructure framework had originally included the boost for IRS to offset the costs of $1.2 trillion in spending on roads, bridges and other projects. The funding was expected to create net revenue by allowing IRS to hire more staff and launch more audits and investigations into non-filers and high-income tax cheats.
Biden had originally requested $80 billion over the next decade for the tax agency—suggesting it would bring in $700 billion in revenue—but the bipartisan group negotiating the package never revealed the amount it had agreed to spend.
Sen. Rob Portman, R-Ohio, who is helping to lead the negotiations, confirmed to CNN on Sunday the proposal had been dropped.
“In terms of IRS reform, or IRS tax gap, which is what was in the original proposal, that will no longer be in our proposal,” Portman said, adding, “One reason it’s not part of the proposal is that we did have pushback.” Some Republicans, such as Sen. Ted Cruz, R-Texas, had expressed wariness of the funding increase, suggesting the agency would unfairly target some Americans.
The bipartisan package is now in flux, with lawmakers renegotiating how they will offset costs. Portman explained Republicans are seeking “cooperation from the White House and [Senate Majority Leader Chuck] Schumer [D-N.Y..] on our pay-fors.”
The Biden administration and IRS leadership has called IRS funding critical to offset more than a decade of cuts or relatively flat funding at the agency. IRS has shed 17,000 enforcement workers over the last decade, disproportionately from highly specialized, senior examiners who typically focus on the wealthiest individuals and corporations.
IRS Commissioner Charles Rettig has said boosted enforcement would focus on high net-worth individuals, large pass throughs, corporate compliance, employment tax field examinations and non-filers with virtual currency, among others. The hiring surge would also go toward customer service efforts, with the goal of improving the phone answering rate to 75% of calls. During the COVID-19 pandemic, that rate dropped to 7%.
Democrats are not willing to abandon their push to boost IRS resources. As part of Biden’s plan to further increase infrastructure spending and to pass other priorities, Democrats are planning to pass a larger package through a process called reconciliation. Republicans have voiced their opposition to that $3.5 trillion bill—the details of which are also still being hammered out—but Democrats can pass the measure unilaterally if they avoid any defections in the Senate.
The bipartisan measure will need 60 votes in the Senate to pass, while the Democrats-only reconciliation bill would need just 50 to allow Vice President Kamala Harris to cast the tie-breaking vote. Democrats are aiming to walk a fine line to avoid losing any votes from their coalition.
They are now planning to help offset the costs of that package with IRS funding and the expected net revenue it would produce, which further pushed Republicans away from including it in the bipartisan measure.
“We found out that the Democrats were going to put a proposal into the reconciliation package which was…similar to the one we had, but with a lot more IRS enforcement,” Portman said.
The IRS is also seeking a funding boost through the regular appropriations process, hoping to add 6,000 employees in fiscal 2022 alone. Rettig said the agency has already built hiring and onboarding plans to get applicants into the agency quickly after receiving congressional approval. The National Taxpayer Advocate, however, recently warned that IRS is “not equipped to handle the influx of hiring the IRS needs.”
The Latest IRS Headache For Taxpayers: 11 Million ‘Math Error’ Notices
Tax changes like the ones brought by last year’s stimulus payments often trigger a surge in such problems.
Millions of Americans have gotten a scary, confusing letter from the Internal Revenue Service in 2021 saying they owe more taxes. Making matters worse, many of the letters are about stimulus payments meant to lessen the blow of the pandemic.
The explosion of IRS bills to taxpayers fall into a category known as “math-error” notices, and the IRS sent out more than 11 million of them from Jan. 1 to mid-August.
That compares with about 765,000 for the same period in pandemic-disrupted 2020 and about 2 million in 2019, according to National Taxpayer Advocate Erin Collins, who heads an independent unit within the IRS charged with safeguarding taxpayer rights. Ms. Collins is trying to help taxpayers who got these notices, and now several million filers will get more time to respond.
Despite their name, math-error notices aren’t just about arithmetic. Instead, they are tax adjustments for a variety of issues detected by IRS computers during return processing. They usually result in tax due, a smaller refund or even a higher refund in some cases.
When the letters assess taxes due or reduce refunds, as millions do, they are treacherous for filers because the first notice is also the final notice–unlike with many IRS letters. What’s more, the law assumes recipients have conceded if they don’t respond within 60 days.
The case then goes directly to the IRS’s dreaded collections process, so taxpayers often face liens or levies faster than with a conventional audit.
Yet the information in math-error notices is often so incomplete that they baffle even tax professionals.
Chastity Wilson, a former IRS lawyer now with professional-services firm CLA, says the firm currently has a client with a math-error assessment of $154,000 for an alternative-minimum-tax issue. But the IRS letter provided no explanation as to why, and the agency moved the case to collections despite timely requests for holds.
“It’s unfortunate we’ve gotten to this point,” Ms. Wilson says. “There’s no way this case should be in collections, and it makes taxpayers anxious and afraid.”
This year’s surge in math-error notices isn’t a huge surprise to pros. Ms. Collins says more than 80% of the mistakes involve filers’ claims for Recovery Rebate Credits, the term for stimulus payments claimed on tax returns. In the past, taxpayers have been confused by tax changes made in response to a crisis. After Congress enacted the Making-Work-Pay credit in the wake of the 2008 financial crisis, the IRS found more than 16 million errors involving it.
An IRS spokesman said the agency is streamlining procedures for 2022 based on what it learned this year, in part by sending taxpayers a letter saying what payments they’ve received.
What caught Ms. Collins’s attention when she researched this year’s letters is that the IRS omitted the crucial 60-day deadline on millions of math-error notices it sent involving Rebate Credits.
So she pushed back and scored a win for taxpayers: Now about five million recipients of earlier notices will get a new, clearer one restarting the 60-day clock. An IRS spokesperson says the agency hasn’t determined when these letters will be mailed.
“Large agencies like the IRS inevitably make some mistakes, and good customer service requires they own them and fix them,” Ms. Collins said. “I commend the IRS for doing the right thing.”
Ms. Collins is also reminding all taxpayers—even those not getting a second letter—of their rights regarding math-error notices. For example, the IRS is supposed to drop an assessment and reconsider the case if a recipient simply requests an “abatement” during the 60-day response period. Even if the deadline has passed, the IRS should rescind the assessment if the filer provides evidence the agency was wrong.
She is also pressing the IRS to clarify these notices further, such as by adding the deadline for a response and providing more specifics on the errors.
The opacity of math-error notices is a longstanding issue for the IRS, one that has been raised repeatedly by the previous taxpayer advocate, Nina Olson, and others. When Congress gave the agency the ability to issue these notices in the 1970s to simplify some error resolutions, it required the agency to spell out the mistake. But many notices don’t do so.
“The IRS is at risk of having courts rule that these assessments are illegal because the notices seldom comply with the law’s language requiring them to explain the error,” says Leslie Book, a tax professor at Villanova University’s law school.
Ms. Collins’s recommendations should help if the agency adopts them. But taxpayers still face the enormous problem of communicating with the IRS when it lacks the resources to deal with mail backlogs or answer the phones—and the clock is ticking toward the 60-day deadline.
On this issue, Ms. Collins cites hair-raising data. By her analysis, only 8% of 173 million callers reached an IRS employee in the first six months of 2021.
Next year the IRS will face more challenges involving math-error notices. In addition to reviewing millions of 2021 stimulus payments, the agency will have to check taxpayers’ reporting of expanded child tax credits, including advance payments of them received this year. It will be a massive job.
The bottom line: math-error notices—and the problems they bring—aren’t going away.