Taxable Talk

According to a report in the Tax Analyst, the IRS will close some taxpayer assistance offices. The Wall Street Journal reported that 70 offices will be closed in order to handle a 1% drop in funding for taxpayer assistance. Unfortunately, that will drive more taxpayers to call the IRS where there is a 50% chance you will get a correct answer to your question.

In the same article in the Tax Analysts, IRS Commissioner Mark Everson notes that he'd like to see any firm that sends tax work overseas be required to notify taxpayers of that fact. It is unclear, though, whether the IRS has the power to make such a disclosure regulation.

Yesterday, the Tax Court decided Slojewski v. Commissioner. In this case, the respondent (Slojewski) and the IRS settled before a scheduled trial in Tax Court. A hearing to finalize the matter was scheduled a month later. All seems well.

Then Slojewski's counsel decides that the deal is no longer good, and petitions the court to have it overturned. Once you enter into a settlement, it takes extraordinary events to have it overturned. As the court stated, "[P]etitioner has not shown that there was a lack of formal consent, mistake, fraud, or some similar ground for vacating the stipulation of settlement, nor has he cited any ground or precedent that would support his motion to vacate our order and decision."

Moral: Once you settle, it's hard to get out.

Here's some text you will be seeing if you get any emails from your EA or CPA (and will probably be in every tax article you read):

This opinion is limited to the one or more Federal tax issues addressed in the opinion. Additional issues may exist that could affect the Federal tax treatment of the transaction or matter that is the subject of this opinion and the opinion does not consider or provide a conclusion with respect to any additional issues. With respect to any significant Federal tax issues outside the limited scope of this opinion, the article was not written, and cannot be used by the taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.

As a professional tax preparer, I'm governed by Circular 230 [link is to the revised rules for Circular 230 that go into effect on June 15th and requires Adobe reader]. New rules, in Sections 10.35-10.37, govern what I must state whenever I send a client a "limited opinion." According to several attorneys lecturing at the SuperSeminar, an email to a client is considered a limited opinion. Under the new rules, the language (above, in bold) must be used. It must be in bold, and in a font larger than the other text (since I use, in general, text [non-html] email, neither bold nor a larger font is possible).

This is mothering taken to the extreme.

While the intent is good—the IRS naturally wants people to pay their taxes—this will end up like The Boy Who Cried Wolf. It will soon be ignored.

Now, for material opinions, a whole other standard applies. This applies (basically) to the Big 4 accounting firms and some law firms.

Anyway, now you know my feelings about this.