Tax & Business Insights

The IRS Black Hole Gets Blacker

Volume 16 Issue 2 --  March/April 2004

In the September/October 2003 issue, we emphasized the need, in dealing with the IRS, to create records by using certified letters, because the IRS seldom has any records except those embedded in its computer systems. This issue will try to identify some problems dealing with the IRS Automated Collection Service (“ACS”).

Just as there are “office audits” and “field audits,” ACS is the “office” component of the collection process. 

In addition to the interminable waits one must endure when calling ACS, some  employees are laughably ill-trained.  For example, several years ago, an ACS employee we will call “Phlaw Dena,” “Dena” for short, informed us, quite incorrectly, that if a taxpayer had not filed returns for seven years, then there was no tax due!  When questioned about the accuracy of such beliefs, Dena suggested that the caller, a tax attorney, needed to “brush-up” on the law. 

Presumably in an effort to economize and use staff more efficiently, calls to ACS are often routed to many different U.S. locations.  Because of this decentralization, when you call the IRS, you will probably not be speaking with someone in your area.  It is important that you obtain the IRS employee ID number because you can’t write a letter about Dena, or another IRS employee, without the name and number.  Until about three years ago many IRS employees and their supervisors refused to give last names or identifying numbers.

Now, ACS is required to provide names and numbers, and they do so regularly.  Most callers, however, do not write down the names and numbers of the IRS employee who answers the phone.  It is maddening to have a Taxpayer-Client rely on erroneous advice and not be able to trace it back to a particular IRS office, which is why it is good to ask which office the person is in.

So what if you know Phlaw Dena is patently wrong and you want to speak to her supervisor about her “phlawed” advice?  Well, you will be promised a call back within 24 hours by Dena’s supervisor.  Ask for the name of the supervisor and her phone number.  Sometimes you will get the name, and rarely you may get a phone number other than the same “800” number you used to call Dena.

Here’s what’s making the Black Hole blacker.  Often they don’t  call back.  The past three times our offices received such promises from the Denas of ACS, there was no call back.

The ACS Black Hole

Seasoned IRS collections officers, those who go out to collect taxes and have gray hair, will often confirm the essential truth of this newsletter.  The same goes with many IRS  supervisors who have to deal with ACS.  So, if you think ACS only dumps on taxpayers, it appears this is not true, but don’t expect any one from the IRS to admit it in writing. 

What is one to do?  Confirm whatever was agreed to with ACS by certified letter. Such letters may be “the” (not your) only record of what happened or was agreed to. 

Complaining to Congressmen will usually get you nowhere. Legislators routinely receive complaints about the IRS, but there is not much they can do other than forward the complaint to an IRS office. Usually not much is accomplished.

It is sometimes helpful to enlist the aid of the Taxpayer Advocates Office (“TAO”) if there are extenuating circumstances, like bad health, clear error, or lost returns.  Don’t expect TAO to have power over ACS; they don’t. Like eunuchs, the TAO is missing some essential parts when it comes to action.  TAO can recommend, but not force, ACS or the IRS to do anything.  Despite its limitations, the TAO can be extremely helpful in some cases – or maddeningly unable to do what should be done because of its lack of power.

Even when the TAO makes a clear recommendation to ACS, and it appears the TAO request is more than reasonable, you may still be forced to deal with the final ACS gatekeeper.  In some cases, dealing with ACS after TAO has made suggestions can be very irritating, as ACS will usually ask for more information, just to show that it, ACS, is still in control. 

The bottom line?  If you are brave and patient enough to deal with ACS, keep your certified letters to the Black Hole and be persistent when you are ready to throw things against the wall.  Don’t be Phlawed!


Copyright 2004
By Tax and Business Professionals, Inc.
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