After years of allowing its criminal enforcement efforts to slide, the Internal Revenue Service is back with a get-tough message for anyone cheating on their taxes: We're going to work harder to catch you.
New IRS chief Mark Everson said his agency is not going to abandon all the customer-service initiatives launched in the 1990s to address claims the IRS was unhelpful -- even abusive -- to taxpayers. In the past several years, Everson says, the kinder, gentler tax-collecting agency has made it easier than ever for people to get accurate and timely assistance.
"There were a lot of problems at the IRS," Everson said in an interview with The Salt Lake Tribune. "And we've gotten much better. But now I feel the enforcement side needs to be augmented [because] more people are inclined to believe they can cheat."
Everson, nine months into a five-year term as IRS commissioner, promises to increase audit rates, boost enforcement actions and develop more effective ways to capture the billions in taxes that remain uncollected each year.
He's doing so at a time when criminal enforcement of federal tax law by the IRS has hit an all-time low, according to the Transactional Records Access Clearinghouse at Syracuse University, which collects and analyzes IRS data. According to the agency's data, the rate of many actions intended to catch illegal behavior, such as audits and prosecutions, has fallen throughout the 1990s.
Accounting industry observers say audit and enforcement actions have fallen to such a low rate that cheating is rampant.
"There are a tremendous number of people out there who aren't even filing returns," said Gail Anger, a Salt Lake City certified public accountant who worked at the IRS for 26 years, mainly as an agent handling audit and collect appeals.
Anger said the accounting community hopes over the next four years Everson will make some meaningful changes within the IRS.
Everson, who before joining the IRS was deputy director for management for the federal Office of Management and Budget, said he intends to pursue those responsible for the greatest amount of cheating.
In other words, average low- to middle-income taxpayers who honestly try to figure out their taxes each year should not worry about taking legitimate deductions.
"We're targeting specific areas in which there have been abuses," Everson said.
Those areas include higher-income taxpayers, corporations and attorneys, accountants and others involved in advising and assisting businesses and individuals with their taxes.
For example, Everson said he witnessed an "erosion of professional ethics" among tax advisers in the 1990s, with some promoting illegal tax-avoidance schemes to clients.
"We need to be able to rely on attorneys and accountants to fulfill their obligations," he said.
He said one problem involves advisers who encourage taxpayers to funnel money to illegal offshore tax shelters. Now, more than ever, it is important to realize that if a tax-saving tool sounds too good to be true, it probably is. If you are unsure, get a second opinion from another tax adviser.
Another target of Everson's increased scrutiny are nonprofits and organizations that claim to be tax-exempt. The IRS, for example, has launched a series of audits of nonprofit organizations that claim to provide credit counseling services to those in debt.
Everson said increased enforcement is necessary so that people realize that there is a significant degree of risk in cheating. He compares the need for enforcement to the need for police officers on a highway.
"On a highway, you need to have clear signs that you can't go more than 65 mph," he said. "But you still need the trooper under the bridge, pulling over people who are doing 85 or 90."
Internal Revenue Service
* Number of employees: 100,000
* Budget: $10 billion
* What it does: In 2002, it collected $2 trillion in tax revenue, processed approximately 226 million tax returns and issued $283 billion in refunds.
http://www.sltrib.com
New IRS chief Mark Everson said his agency is not going to abandon all the customer-service initiatives launched in the 1990s to address claims the IRS was unhelpful -- even abusive -- to taxpayers. In the past several years, Everson says, the kinder, gentler tax-collecting agency has made it easier than ever for people to get accurate and timely assistance.
"There were a lot of problems at the IRS," Everson said in an interview with The Salt Lake Tribune. "And we've gotten much better. But now I feel the enforcement side needs to be augmented [because] more people are inclined to believe they can cheat."
Everson, nine months into a five-year term as IRS commissioner, promises to increase audit rates, boost enforcement actions and develop more effective ways to capture the billions in taxes that remain uncollected each year.
He's doing so at a time when criminal enforcement of federal tax law by the IRS has hit an all-time low, according to the Transactional Records Access Clearinghouse at Syracuse University, which collects and analyzes IRS data. According to the agency's data, the rate of many actions intended to catch illegal behavior, such as audits and prosecutions, has fallen throughout the 1990s.
Accounting industry observers say audit and enforcement actions have fallen to such a low rate that cheating is rampant.
"There are a tremendous number of people out there who aren't even filing returns," said Gail Anger, a Salt Lake City certified public accountant who worked at the IRS for 26 years, mainly as an agent handling audit and collect appeals.
Anger said the accounting community hopes over the next four years Everson will make some meaningful changes within the IRS.
Everson, who before joining the IRS was deputy director for management for the federal Office of Management and Budget, said he intends to pursue those responsible for the greatest amount of cheating.
In other words, average low- to middle-income taxpayers who honestly try to figure out their taxes each year should not worry about taking legitimate deductions.
"We're targeting specific areas in which there have been abuses," Everson said.
Those areas include higher-income taxpayers, corporations and attorneys, accountants and others involved in advising and assisting businesses and individuals with their taxes.
For example, Everson said he witnessed an "erosion of professional ethics" among tax advisers in the 1990s, with some promoting illegal tax-avoidance schemes to clients.
"We need to be able to rely on attorneys and accountants to fulfill their obligations," he said.
He said one problem involves advisers who encourage taxpayers to funnel money to illegal offshore tax shelters. Now, more than ever, it is important to realize that if a tax-saving tool sounds too good to be true, it probably is. If you are unsure, get a second opinion from another tax adviser.
Another target of Everson's increased scrutiny are nonprofits and organizations that claim to be tax-exempt. The IRS, for example, has launched a series of audits of nonprofit organizations that claim to provide credit counseling services to those in debt.
Everson said increased enforcement is necessary so that people realize that there is a significant degree of risk in cheating. He compares the need for enforcement to the need for police officers on a highway.
"On a highway, you need to have clear signs that you can't go more than 65 mph," he said. "But you still need the trooper under the bridge, pulling over people who are doing 85 or 90."
Internal Revenue Service
* Number of employees: 100,000
* Budget: $10 billion
* What it does: In 2002, it collected $2 trillion in tax revenue, processed approximately 226 million tax returns and issued $283 billion in refunds.
http://www.sltrib.com
