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Auditor: “Mr. & Mrs. Taxfiler, we’ve noticed several problems in your return. Among others, you seem to have violated sections 531 a-h, 232 (c)(d), section 4 b (i). What do you have to say about this?”

Taxfiler: “We’re sorry, we hadn’t studied those sections too carefully. I guess we had concentrated on other parts of the 73,000 page code. We had some difficulty understanding it, especially since we were also struggling to comprehend and explain to our employees the implications of the Affordable Care Act. We now spend about 75% of our time conforming to regulations and the rest managing our flower shop, but we do try to follow the law.”

Auditor: “Try to follow the law? You are required to follow the law. Ignorance is not an excuse.”

Laws are laws. But when you’re the IRS, apparently laws are suggestions followed “whenever it can.”

On 9/10/14, The Hill reported an exchange between IRS Commissioner John Koskinen and the House Ways and Means subcommittee on Health. The subcommittee was holding a hearing on the upcoming health insurance enrollment period and how the IRS was going to verify that taxpayers were providing the correct amounts of income when determining their health insurance subsidy amounts.

During his testimony, Koskinen stated: “Whenever we can, we follow the law.” Representative Kevin Brady, who leads the subcommittee, responded: “I encourage you to follow the law in all instances.”

“Whenever we can…”? But if they can’t, do they ad lib? What sort of “encouragement” do you think you’d get from the IRS if you were Mr. & Mrs. Taxfiler and said you follow the tax code whenever you can? The mugger “encouraged” me to hand over my wallet as he pointed his .45 at my head.

Can you imagine the IRS agent’s reaction if you made Koskinen’s statement during an IRS audit?

Those of us in the real world couldn’t get away with it. Whether his statement was intended to be taken at its face value or not, it reminds us of the complexity of today’s tax code and the opportunity that complexity presents for cronyism, corruption, and unfairness.

 

The article and a video of the exchange appear here: Click for article and video.

 

 

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