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.

Sunday, March 04, 2007

Browsers Beware

In response to my prior post, Lagniappe's keeper has informed me that every day I don't post, G-d kills a kitten. Being that I am very, very highly allergic to cats (from tabbies to lions and tigers and leopards), I risk an anaphylactic seizure every time I post. Nevertheless, I will continue to post from time to time.

Congresscritters Tom Reynolds (R, NY) and Jim Ramstad (R, MN) have introduced H.R 779, the Tax Snooping Prevention Act of 2007. Seems that the Treasury Inspector General for Tax Administration ("TIGTA")'s Semiannual Report to Congress of 31 March 2006 had reported that "[t]here has not been a noticeable decrease in the number of violations" of the antibrowsing provisions of Internal Revenue Code Section 7213A.

So Messrs Reynolds and Ranstad have proposed legislation to double the antibrowsing penalties. The penalties for willful unauthorized access of a taxpayer's records by IRS employees come in three flavors:

1. Fine and/or imprisonment.
2. Damages to the affected taxpayer (current minimum $1,000, which would double under HR 779).
3. Getting canned from your position with the IRS (or any other Federal agency).

My take on it:

First and foremost, my personal empathies lie with my ex-colleagues at the IRS. They, for the most part, labor diligently, within the constraints of the confusing tax laws and regulations, and the often dysfunctional IRS bureaucracy.

Which is why I have no problem with punishing the bad apples! America's tax system depends upon the taxpayer voluntarily, without compulsion or coercion of a Federal agent, truthfully and completely filling out and filing their tax returns and paying the taxes due. And the public will not do this if they knew that their personal info on the tax return would be bandied about to strangers (or, worse yet, to adversaries such as ex-spouses, nosy neighbors and the like). Which would mean a return to the more oppressive methods of taxation employed in other nations, today and in the past.

So I have no problem with, and in fact applaud, HR 779 per se.

But HR 779, if it becomes law, would not solve the basic problem, which is a complex, convoluted and confusing tax code that is unwieldy to interpret, enforce and administer. And I still am not convinced that Congress has the collective political will to bring about real reform to our taxation system.
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For the record:

A. When I worked for the IRS, I did not have the resources to personally access the IRS computer system for any purpose. If I needed a particular taxpayer's record, I had to fill out a form and submit it to a clerk whose job it was to perform the access and obtain the tax record print-out (which usually took a few days). So there was a paper trail of all my accessions of taxpayer info from the IRS computer system. And I will categorically state that each and every one of those accessions was either a case assigned to me, or directly related to a case assigned to me. IRS employees who follow such guidelines have nothing to fear from HR 779.

B. My own personal income tax returns have already been filed this year. The Internal Revenue Service Restructuring and Reform Act of 1998 tasked the IRS to get 80% of America's income tax returns filed electronically. They are short of this goal, and I have not been much help to them in achieving it. I have seen too many blunders with the IRS losing track of the tax returns it receives. Though the U.S. Postal Service is certainly far from infallible, it can keep the IRS honest if you use certified or registered mail to file your tax return.

2 Comments:

  • At 08 March, 2007 14:09, Blogger Aaron said…

    I've likewise filed my Federal return already.

    However, I submitted the filing electronically.

    I would think the DCN (Declaration Control Number)received from the IRS along with the response that they have received the tax return should suffice as proof of submission date of the return. If for some reason you think this would not suffice as proof, let me know.

    On the other hand, I sent the payment check in via certified mail.

     
  • At 09 March, 2007 04:04, Blogger Expatriate Owl said…

    Per Treas. Reg. Section 301.7502-1(d), Aaron is correct. He indeed has sufficient proof that his tax return was timely filed.

    But I will refer Aaron (and everyone else) to Page 3 of the Instructions for the 2006 Form 1040. One of the points touted by the IRS about its e-file program is that if you file, you will "receive an electronic proof of receipt within 48 hours after the IRS received your return."

    But per Treas. Reg. Section 301.7502-1(e), when I go to the Post Office and mail the tax return via certified or registered mail, however, the receipt given to me by Postal clerk is prima facie proof of a timely postmark and of the IRS's receipt of the document. I get it immediately! None of this 48 hours business.

    When the IRS can give me a receipt as fast as the Post Office can, then I will consider filing my returns electronically. For now, having seen too many dysfunctions during my past life with the IRS, I would rather that the IRS be kept honest by the U.S. Postal Service.

     

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