Expatriate Owl

A politically-incorrect perspective that does not necessarily tow the party line, on various matters including but not limited to taxation, academia, government and religion.

Friday, June 09, 2006

IRS loses file again:

In a yet to be officially reported case (which may well never be officially reported), the IRS lost the taxpayer's administrative file, but the taxpayer was unable to prove the IRS's assessment incorrect, and so, judgment was entered against the taxpayer.

The case is United States v. David A. Williams, 2006 TNT 111-16, (M.D.Pa., No. 3:04-CV-0394, 15 March 2006).

Critical as I am about the IRS, my heart doesn't really bleed all that much for the taxpayer involved for the following reasons:

A. Mr. Williams did not file his 1987 and 1988 tax returns until 2002.

B. Mr. Williams failed to substantiate all of his claimed dependency exemptions. He was able to come up with the birth certificates for 2 of his children, but unable to show birth certificates for the other 2 (nor even any evidence that they resided with him or were dependent upon him).

C. The title certificate for a motor vehicle claimed as a business expense was incomplete (and possibly intentionally occluded when a copy was made).

The Court was not impressed with the sparse evidence presented by Mr. Williams, and so, the assessments reflected on the IRS's transcript were deemed to be correct because Mr. Williams was unable to overcome the presumption of correctness to which the IRS is entitled.

My post of 23 December 2005 discusses a CPA who failed to file his own tax return timely. The system is inherently biased against late filers.

[If this posting does not seem to reflect the usual degree of thought and research that I put into other postings, it is because I am very, very, VERY swamped now. Much has happened which otherwise would elicit a comment from me, but I have had to pass it up.

In addition to my normal routine, I am teaching an undergrad Summer Session course in Business Law (and am only posting this because I need a break from grading the assignments that were handed in yesterday). This I can generally wing from last year's lecture notes. The real time and energy drain is the graduate Estate & Gift Tax course I am slated to teach, for the first time, during the 2nd Summer Session. For this I must tool up from scratch, which wouldn't be so bad, except that Congress is now fighting it out as to the future of the Estate Tax, so much of the lecture notes I am now assembling may well be inapplicable when I start teaching the course in less than one month. So things will likely grow very busy over the next month, which likely will not facilitate too many postings.]

And Congress must do something about the Estate Tax, because as matters currently stand, it will totally disappear on 1 January 2010, and then suddenly reappear with respect to decedents dying on or after 1 January 2011. From a taxation point of view, lots of wealthy people would be worth more to their children and other heirs if they died in 2010 than in 2011 or afterward. It would therefore not be unsurprising in the least if, during the final weeks of 2010, a greater than statistically expected number of older wealthy people were to die under unexplained or unusual circumstances.

And because, in many localities, the long-tenured police detectives typically have "use it or lose it" annual leave at the end of a given calendar year, the law enforcement authorities will be ill-postured to investigate the mysterious deaths until the detectives return from extended winter vacation.


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