IRS Takes a Beating

It seems like every news program or newspaper article these days starts off with the wrong doings at the IRS. First the non-profit status for organizations the 501(c)(4) status. The IRS code section 501 deals with non-profits. Most are 501(c)(3) which includes churches, Boy Scouts, Goodwill just to name a few. Part of the IRS code says that non-profits under the 501(c)(4) cannot have anything to do with the political election process. It appears the IRS pulled certain applications that used specific works like Tea Party in their name for additional scrutiny. The total number of applications pulled was 68 and all 68 were approved. I don't know if the delays impacted any election results but it appears to be politically motivated. Nothing happens at the IRS unless at least 2 layers of management approve it. All this happened under the former Director. To fire the interim Director who had nothing to do with the issue makes everyone involved look stupid. Second the IRS seems to have been spending over $25,000,000 of taxpayer dollars on meetings. In this day of online webinars or in house training there does not appear to be any fiscal reason to have 2500 IRS employees congregate in one location for a meeting that costs the taxpayers over $4,000,000. At $1,600 per employee that is a nice vacation. I think the managers and their superiors should be terminated. Third, the IRS is trying to get to the point where they are doing Real Time Processing of income tax returns. Real Time Processing is the ability to match the numbers on your tax return with the W2s, 1099s and 1098s that have already been sent to the IRS. For the 2011 tax year the IRS said they stopped about $200,000,000 in fraudulent tax refunds from being processed. Problem is about $200,000,000 were processed. Most of the fraudulent returns are identity theft. The thief obtains your social security number and then files a bogus tax return where all the numbers are made up so there is a big refund. The refund is deposited to a bank account. By the time the real person files their actual return it rejects because a return with that social security number has already been filed. When the IRS goes looking for the refund the bank account is closed and the address on the return is vacant. Real Time Processing would stop the bogus return because none of the information would match what was already on file at the IRS. Maybe the tax filing season would start in July and end November 15th. That way everyone has their refund by December 25th. The IRS has not give Real Time Processing project status yet. Project status means the IRS is working on what it would take to implement the program. At this point they are still discussing.