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Down Memory Lane

The IRS is getting steadily and significantly more aggressive in its pursuit of taxpayers who owe back taxes. Back in the 1990s, after Congress held hearing after hearing which exposed business-as-usual abusive behavior by IRS agents, laws were changed. The IRS restrained itself. New laws restrained it too. This hated and feared government agency was reined in. The IRS made explicit efforts to be a “kinder, gentler” government agency. No more though.

Meet the new boss

Fast forward a few years to the 2000s: The country is fighting a long and expensive war. The historic, large government surpluses of the late 1990s have disappeared and been replaced by historic, enormous debts. The country is broke, and the IRS has been given marching orders to do something about it – that is, collect more tax money.

Collectors on steroids – pumping up IRS collection stats

So, while seven, eight, and nine years ago, the IRS’s focus was, however briefly, on “service,” to help taxpayers understand the rules and bring them back into the system, in recent years and especially now, the focus and the resources of the IRS have been pointed right at enforcement. (“Enforcement” is a neutral-sounding word for the life-disrupting powers the IRS has to freeze bank accounts, seize bank accounts, garnish paychecks, ruin credit ratings by filing liens.)

The numbers show a steady increase in enforcement. For example, filing federal tax liens has risen approximately 20% from more than 544,000 in 2003 to almost 630,000 in 2006.

More immediately noticeable and damaging to a taxpayer is when the IRS acts to levy and so take by blunt force a taxpayer’s assets, whether it is a bank account or wages, or even accounts receivable owed to the taxpayer by the taxpayer’s customers or clients. Levies have more than doubled since 2003 from a just under 1.7 million to more than 3.7 million.

Just look at the steady rise since 2003 shown in a chart made from the IRS’s own statistics:

 

           2003 

           2004

2005

    2006

Enforcement activity:

 

 

 

 

Number of notices of Federal tax liens filed

544,316   

534,392  

522,887   

629,813   

Number of notices of levy served upon third  parties

1,680,844   

  2,029,613  

2,743,577   

3,742,276   

Number of seizures

399   

440  

512   

590   


What this all means is that the IRS is more energetic than ever in its efforts to go out and collect taxes that it believes are owed.

A reporter recently asked: “What do people dread about tax season and why?”

In our experience, people dread what seem like tentacles, claws, and the inescapable grip of the IRS.

It can be like a nightmare or horror movie come to life: an enormously powerful, seemingly brutal, irrational and punishing bureaucracy that can focus on you, a taxpayer who’s just trying to make a living and pay his or her bills, and use that focus and that power to take over your life, turn it upside down, ask all sorts of invasive questions and do the financial equivalent of a colonoscopy – without an anesthetic!

The dread also comes from the fear that this huge and hugely powerful bureaucracy might use its huge power to freeze your bank account, empty it, and even seize your paycheck.

While taxpayers who are up-to-date might dread the tax man one season a year, if you’ve fallen behind, it is the sort of fear that stays with you all the time because this is a problem that will not go away by itself.

IRS problems do not have to last forever – you can do something about it!

Even though an IRS problem will not go away by itself, it doesn’t mean you are stuck with it forever. Fortunately, if you decide to do something about it and take action, these are problems which can be solved.

We help taxpayers, both individuals and businesses, solve their tax problems so they can take their lives and businesses back. Our clients get the added peace of mind of knowing that when they hire us we talk to the IRS for you, so that you don’t have to. Read more about putting your IRS problem into the past by going to the page, IRS Tax Problem Solving – Tax Controversy Resolution. To get there, click here now.

Not only do we vigorously represent the rights of taxpayers, sometimes the IRS just gets it wrong, and we help our clients by helping the IRS get it right. See, for example, “IRS Backs Down and Apologizes.”

 

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Law Office of Allan R. Pearlman • 116 West 23 Street, Suite 500, New York, NY 10011 • Tel. (646) 827-4257