July 19, 2011 - Phil Hodgen

Why the IRS is pushing to close all 2009 VDP cases

I got a comment to yesterday’s post asking about the rumor that the IRS is giving the bum’s rush to all pending 2009 VDP cases.

Here’s my answer.

The IRS runs on process.  If there is a procedure to get something done, then the IRS brass feels fulfilled and self-satisfied.

They have a process now to deal with cases in the 2009 program.  It is a two-step process involving sending letters out to you.

Therefore the IRS now believes that they are being fair.  (This invokes images of Sparky Anderson’s notorious rant in which he uttered the timeless phrase “I’ve always been fair with f***ing writers.”  The classic quote is around the 1:00 mark.  Trust me.  If your little ears are offended by potty-mouth stuff you don’t want to listen.)

The IRS’s definition of fairness is somewhat untethered from reality.  But I digress. No. Let me digress a little more. The IRS’s view of Procedure Equals Fairness is approximately like thinking you can fillet a salmon with a blunt machete. It’s a lot like the IRS version of the Underpants Gnomes.

1. Acquire fish.

2. Make cutting motions.

3. ????

4. Fish fillets!

OK. Now I’m done.

The IRS is going to push everyone out the door. This is “fair” to the taxpayer, for certain values of $FAIR.

Note: the above reflects my perception of management decisions at the IRS. My experience at the field level (Revenue Agents and Managers) is that they have a much more pragmatic, nuanced, view of the world and its inhabitants. Revenue Agents understand they are dealing with humans. The Commissioner is dealing with data points.

As for the 2011 OVDI, who knows whether this will run more efficiently.  A couple of years ago when this started I was moaning to a friend about it.  I said “I wish the IRS had some clear procedures.”  He said, “Trust me, you don’t want clear procedures.  Rules from the IRS only make things worse, never better.”  He’s right.

The 2011 OVDI is kind of like learning to be a high jumper and you have a crazy coach.  He’s teaching you how to high jump.  He sets the bar at 5 feet and says “Jump!”  You do.  You knock the bar off.  He berates you mercilessly then sets the bar at 5 feet six inches and yells “Jump!”  If at first you fail, set your goals higher and try again.

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