I could a tale unfold whose lightest word
Would harrow up thy soul, freeze thy young blood,
Make thy two eyes, like stars, start from their spheres,
Thy knotted and combined locks to part
And each particular hair to stand on end,
Like quills upon the fretful porpentine.
– Hamlet Act I, Scene V –
Every year at least a dozen people visit my office to tell me how evil the IRS is. I listen patiently. In the vast majority of those conversations, however, I eventually discover that the individual is either a tax protester, a non-filer, or has had a long history of either lying or ignoring the IRS.
But every now and then I hear a real horror story. Here’s a few spine-tinglers:
A President (we’ll call him Job) of a mortgage brokerage company came to me in 2005 telling me that an IRS collection agent (we’ll call him Legree) had visited him at his place of business. However, there were two separate and distinct legal entities that operated out of the same small office building. Legree told the receptionist he needed to see Job immediately.
The receptionist said nobody named Job worked there. Legree then started shouting at the receptionist and telling her that the company had not paid it’s payroll taxes and that a lien would be filed and the IRS would close the business down if Job did not come out and speak with him immediately.
Other employees heard the ruckus and gathered around the receptionist and Legree. Legree angrily left an IRS summons on the receptionist’s desk and, again, in front of several employees, repeated his threats to close the business down.
Imagine the effect this had on employee morale? If I worked there and heard that, I would have dusted off my resume faster than an Sothebys auctioneer could say “abuse of power.”
I spoke with the receptionist of the company and several of the employees and they all corroborated the facts. I wrote a letter to Legree’s group Manager, Legree 2, and she told me that the agent had not violated any law. If the business didn’t owe taxes, she said, it had nothing to worry about. I then filed a TIGTA (Treasury Inspector General for Tax Administration) complaint against both Legree and Legree 2.
I received a response acknowledging my filing of the complaint but neither I, Job nor the receptionist and employees of the innocent business were ever contacted by a TIGTA investigator. The matter was, apparently, ignored.
Another client, we’ll call him, Alexander Hamilton, told me that an IRS collection agent (Aaron Burr, of course) called him after my client had missed a deadline for filing his delinquent tax returns and told him that because he had not promised to do what he said he’d do the matter was no longer a professional dispute, but a personal one. When I confronted Burr he told me how offended he was that Mr. Hamilton had insulted him by failing to do what he had promised then denied ever telling Mr. Hamilton that the matter was now personal. He forgot one little detail, however. He had left a message on my client’s cell phone reprimanding him for not filing the returns as he had promised. Then the agent said “don’t make this personal.”
When we confronted Mr. Burr’s group manager about the Revenue Officer’s behaviour he defended him by saying “his job is to collect taxes and that’s what he was trying to do.” When I suggested to the group manager that repeatedly telling a taxpayer “it’s personal” might be construed as a threat he became angry and accused me of threatening him.
Eat Your Heart Out David Letterman
Several years ago at about 7 a.m. I got a frantic call from a client saying that when he went out to get the paper he saw an IRS collection agent parked on the street directly in front of his house. We’ll call the agent Mrs. Gulch. My client owed more than $1 million to the IRS and had no equity in assets or sufficient income to repay anything but a very small portion of the IRS debt.
He told me that this was the third day in a row he had seen her parked in front of his house (apparently doing nothing but sitting in the car waiting for him to come out and see her sitting in the car).
If the agent had a purpose for being there (i.e. to assess the value of the house, determine who resided at the house, etc.) her presence would have been legitimate. But to merely appear at taxpayer’s home day after day was clearly a tactic designed to frighten my client and harass him into somehow paying off his IRS debt. I filed a complaint with Gulch’s group manager. The visits to my client’s home stopped, but Gulch was given more taxpayer files to handle.
Conclusion: The great majority of IRS agents are fair and decent people who respect the rights of taxpayers. But every now and then we encounter a rogue agent who let’s his power go to his head. As practitioners it is incumbent upon us to know what our clients’ rights are so that we can know when they are being violated and take action to prevent their continued violation.