P.O. Box 476

Schaller, IA 51053

IRS Strategic Plan Through Fiscal 2017

Here is what to expect when you make your initial contact

with Your IRS Problems Solved®:

VOL 1 ISSUE 2

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Every five years the IRS issues a Strategic Plan (SP)

setting forth the strategies and tactics it intends to employ

to enforce tax collection. My approach to the column for

this issue diverges from the usual in that I will be relying

heavily on a newsletter written by my colleague Dan Pilla.

Dan is one of the top tax experts in the country. He has

written numerous books on the subject of taxes. The

Associated Press has noted that he probably knows more

about the tax law than the IRS commissioner. He has

testified before Congress and has been influential in drafting

tax laws that help protect us from an overly zealous IRS. I

will attempt to highlight the more significant points that

Dan makes in his newsletter Pilla Talks Taxes, the January/

February 2015 issue. However, Dan has packed so much

important information in this issue that he has given me

permission to make the entire newsletter available on our

website www.buckcpa.com. If you are even moderately

interested in how the IRS plans to “attack” us during the

duration of this SP, I strongly recommend that you read

the complete newsletter there. Some of the language used

by the IRS is truly frightening. Please note that unless

otherwise indicated, areas in quotation marks are direct

quotes from Dan’s newsletter.

Over the past few decades there has been a real tug-of-war

over whether “service” or “enforcement” should be the

larger goal of the IRS. “Service” is part of the name of this

organization, but, unfortunately, we find ourselves in

an era where enforcement receives the overwhelming

attention and financial resources provided by Congress.

The vast majority of us citizens are law-abiding, even when

considering income taxes. We are willing to abide by the

law – IF WE COULD ONLY UNDERSTAND WHAT

THEY WANT FROM US. There has been much in the news

recently indicating that actually getting a response from the

IRS when seeking information will reach the lowest levels

seen in many years. The suggestion is that less than 50%

of phone calls to the IRS will even be answered. We tax

professionals have had a special number we can call to help

our clients resolve tax issues however, even that line is

subject to go unanswered for extremely long periods of

You will provide some contact information

to our phone receptionist.

You might be requested to provide (via our

secure server) copies of certain documents

you have received from the IRS (or state

taxing authorities) so we can review them

before our phone consultation

A phone appointment will be set for a mutually

acceptable time in the next day or two

At the appointed time you will phone and be

provided a free initial conference with Tom

Buck, CPA. The purpose of this conference is

to discuss, in enough detail, your particular

problem with this single purpose in mind

– deciding whether we can help you

resolve your problem.

Over many years of helping people with IRS problems,

I have learned how to define a tax problem pretty quickly

and then determine what the outcome ought to be based

on our understanding of the tax law. Once we are confident

what the outcome should be, we do everything necessary

to make that outcome a reality.

It is important for you to know that there are some

cases we do NOT take because the case can’t be won and

we will not put the taxpayer in a worse position by taking

their money when we can’t offer any significant help. Our

goal is this —that we are able to get the relief the taxpayer

needs and, often, have the cost of our services paid for

by the savings we help create.

“Defending our fellow citizens against their government

by making sure the IRS obeys the rules.”

Tom Buck, CPA

Donna Cavanaugh, EA O: 888-364-4496

F: 888-364-4496

info@buckcpa.com

March/April 2015

time (often hours). “Even while the tax laws are getting

more complicated every year the IRS’s clear focus is on

after-the-fact enforcement, rather than helping people

comply in the first place.”

In this SP you will learn that the IRS believes, among other

things that you are a tax cheater, that it needs ever

increasing amounts of information about you, that this

information must be provided not only by other

governmental agencies, but also information from foreign

governments AND that it must increase audit and

investigative activities in every area.

You will find the IRS broke this SP into two major sections:

1. “Deliver high quality and timely service.”

Dan’s comment: “The IRS talks a good game throughout

its SP regarding taxpayer service, but the facts betray

something much different.” The IRS blames lack of

funding by Congress for its low levels of service, but

“…the truth is the agency makes the conscious choice

to put taxpayer service well behind enforcement when

it comes to resource allocation.” You should read the

entire newsletter to get the full picture, but here are

some observations made by the National Taxpayer

Advocate in her 2014 report to Congress:

“The IRS is unlikely to answer even half the

approximately 100 million phone calls it receives

Citizens who do get through will experience extremely

long hold times IRS eliminated tax return preparation

assistance altogether IRS will answer far fewer tax law

questions than in the past. The agency will answer no

tax law questions after April 15 leaving those who file

later in the year simply ‘on their own.’”

About three of the eight pages of Dan’s newsletter deal

with the misnomer of IRS “service”. Essentially – there

ain’t none. (Continued on Page 2.)

–

Read all of Dan Pilla’s article by visiting:

www.yourirsproblemssolved.com.

Do open all mail from the IRS - ignore it at your eventual peril!

Don't respond to the IRS without seeking the advice of a tax professional first - only exception

is to inform the auditor that you have appointed a Power-of-Attorney representative.

Don't meet with the IRS personally - in almost every case, we do not ever allow our clients

to speak with the IRS, even with us present.

Don't try this at home - the old adage that the lawyer who represents himself has a fool for a

client holds true when the IRS is after you. Later I'll share my own IRS audit experience with

you. The first thing I did when I received my audit notice was to hire the best tax attorney I

could afford. You owe it to yourself to contact us first, so that we can guide you—before

you make a decision that could cost your dearly.

Comments and Suggestions Visit our website for even more tax-related content!

Do open all mail you receive from the IRS - do

this and you will never get that nasty notification

that the IRS is taking your bank balance or part

of every paycheck.

Do open all mail from the IRS (this is important

enough to repeat) - IRS will make numerous

attempts by mail to get your attention. These

are opportunities to learn exactly what the IRS

is up to. HOWEVER, navigating these IRS waters

can be problematic even for experienced

professionals - get help.

Do contact Your IRS Problems Solved® for a free

consultation to determine if we can help you. If

you have no options, we will tell you that the IRS

has you by the short hairs and not take money

from you if we can't help. In most cases there is at

least one solution that will pay for itself. We take

you through the entire process and don't quit until

we get what we told you the result would be.

Your comments and suggestions on ways that we can make this

newsletter more useful to you are welcome. We also invite you to

visit us at: www.yourirsproblemssolved.com. Our website is updated

regularly with fresh information on a myriad of tax topics. If you leave

your email address, you will be notified whenever we post new material.

Space within this newsletter is a bit limited sometimes there will

be topics which require more space than we can devote to them here.

In that case, we will try to give a short, executive summary and invite

you to the website for a more complete treatment.

As a final note, if you have acquired a physical copy of this newsletter

but would rather have it emailed to you, simply send your request to

info@yourirsproblemssolved.com. To opt out of receiving the newsletter

entirely, send an email to the same address.

2 3

For when you get an IRS letter notifying that you have been chosen for an IRS audit:

IRS Levies and Liens

Dos and Don’ts For when your banker or employer tells you they have

to send your money to the IRS:

2. “Effectively enforce the law to ensure compliance with

responsibilities and combat fraud.”

Dan observes that at the end of the day, the IRS is an

enforcement agency. Its idea of helping people comply with the

law has moved strongly toward implementing and enforcing an

ever-increasing number of penalties (whose amounts are also

increasing regularly). “There are over 170 different penalty

provisions in the tax code. These provisions are used millions

of times each year against individuals and businesses.” Here is

an extremely important point: “I have always maintained that

the failure to comply is more about the lack of knowledge that

it is the intent to evade or defeat the payment of taxes.”

Under this SP the IRS intends to challenge the income

reported on a tax return rather than the deductions. Why

should this matter to you? Dan calls this “…the economic

reality or lifestyle audit. This is an audit approach concentrated

on your lifestyle as a means of judging whether you reported all

your income… That is to say, they will question directly

whether your lifestyle is consistent with the income reported

on your tax return, including investigating whether that lifestyle

suggests you earned more than you reported.” It’s not difficult

to note how this approach is likely to lead to arbitrary

decisions on whether you should be subjected to an IRS audit.

The SP specifically states: “we recognize that widely

publicizing timely enforcement actions can have a deterrent

effect, preventing taxpayers from becoming non-compliant

in the future.” Remember Joe Louis, Willy Nelson, Leona

Helmsley, Redd Foxx, Wesley Snipes and other well-known

citizens whose IRS problems were widely publicized? However,

it gets even scarier than that as the SP goes on to state: “… the

IRS is working to ‘reward people who disclose taxpayers that

fail to pay the taxes they owe.” To me, this is too strong a

reminder of past totalitarian regimes (think Nazi Germany)

IRS Strategic Plan Through Fiscal 2017 (continued from Page 1) which encouraged citizens to report against their friends and

neighbors. “Imagine the notion of Americans terrified of the

idea of running afoul of the IRS and at the same time, terrified

that their own neighbors may be spying in the hope of receiving

a reward. Is this really the kind of tax system we want to

encourage?” I would add – Is this really the kind of America

that any of us wishes to live in?

In light of this it is astonishing that the SP includes a

provision that it intends to “build and maintain public trust.”

In conclusion, as I once again strongly recommend that you

read this newsletter in its entirety, I quote Dan’s observation

that you need to be prepared to defend yourself. “Make no

mistake about it. This is an all-out attack on your financial life.

The IRS believes you are a tax cheater. They are working

tirelessly to track and assimilate your every financial move,

both business and personal. They will use that information

against you at every turn, attempting to justify the claim that

you earned income you did not report. The IRS will attempt

to put the burden on you to prove a negative…” just exactly

how do you go about proving that you have reported ALL

of your income?

I leave you with the reminder of our business motto (cited

frequently in this column) – Defending our fellow citizens

against their government by making sure the IRS obeys the

rules. I never expected that we citizens would have so much to

fear from our government and how much “defending” we might

all need in the future.

P.S. Dan Pilla founded and heads up the Tax Freedom

Institute, of which I have been a proud consulting member for

almost twenty years. Consulting members are comprised of

attorneys, CPAs and EAs who specialize in helping taxpayers

who have IRS problems. Become a non-consulting member or

sign up for Dan’s newsletters at www.taxfreedominstitute.com.

Audit Dos and Don’ts

We always recommend that our clients retain copies of

their tax returns for ever. They don’t take up much space

and you can never tell when they might come in handy. My

usual rationale is that you might want to go back and see

during what year some event in your life occurred – like

what year did we sell that house or some such.

Today we had a call from a person in California who has

a tax problem. The State tells him that he needs to file tax

returns for his small business for the years 1991, 1992 and

1993. We would never have thought that ANY taxing

authority would be looking for tax returns that far back. By

and large, even if you haven’t filed tax returns with the IRS

for many years, they will only require you to go file back tax

returns for six years. Going back twenty-five years is unheard

of – although in our experience, the California Franchise Tax

Board can be real hard noses.

From the sound of things, if this poor fellow can’t produce

copies of those ancient returns, the State will go after him for

$50,000+ they say he owes. We do not know at this time

whether he actually filed the returns in question (please

remember that if a tax return is not filed, the statute of

limitations never even starts to run). However, assuming that

he did, but cannot prove it, the result will be the same and he

will owe the State. So the moral of this story is – keep you

copies of tax returns forever – they could save you major

headaches in the future.

Why Keeping Old Tax

Returns Shouldn’t Be a

Thing of the Past

…