“What advice do you give about dealing with the IRS?“ TIME asked Richard Yancey who has seen the all-powerful IRS from the inside out, spending 12 years as a government “repo man” pursuing businesses and individuals with long overdue taxes on his interview “Confession Of A Tax Collector” published by TIME on April 14’ 2009. Yancey said “If you get a letter from the IRS, answer the letter. If you get a phone call, talk to the person on the phone, it’s their job to try to resolve the problem. And be more or LESS honest on your taxes. In fact, I’d err on the side of overpayment”.
I personally do not much surprise with his answer. I was five years as a tax consultant, I seen his statement is quiet true; overpayment in taxes would draw immediate suspicious of any tax peoples [collectors and auditors] in general, and most likely will be followed by tax audits. This common behavior tends to lead to the next “common tax advice”: you would be better to be less paid rather than overpaid. As long as you pay the balance right when the notification letter arrive, pay the penalty and interest, you’re safe.
As an accountant, I would suggest: be plain in your numbers: taxes, financial, cost, just whatever number is, never cook your book! Been long time I am questioning myself, why tax peoples would rather “err” on any overpayment? Is this because of overpayment will be followed by tax refund that means they should return the cash to the tax payers?
That is only a part of interview on the “Confession of a Tax Collector” published by TIME. The next interesting dialogue is this:
TIME [Interviewer]: “It sounds like you had to become a frostier person to do this job. Did you notice that happening?”
Yancey [Tax Collector]: “Yes. It was so subtle, it took a long time to wake up to the fact I’d become a different person. When I first started, there was no way I would call someone on the phone and pretend to be someone else. By the end of it, I was perfectly willing to pick up the phone and pretend to be someone’s high school classmate in order to find a taxpayer”.
TIME: “So you would lie to people”.
TIME: “Was that common?”
Yancey: “As far as I know it was NOT UNCOMMON. I had trainers who would suggest tactics like that. This came all before the Revenue Restructuring Act. That’s the 1998 law that enacted a “Taxpayer’s Bill of Rights”. You say it made tax collectors less aggressive and took some of the teeth out of the IRS. It took a lot of the fun out of it. The job became incredibly difficult with the restructuring act. The pendulum swung to the other side. The attitude was, “We’re going to write everyone up on an installment agreement, everybody’s going to try to compromise“.
TIME: “I hope at least some people in the IRS were honest”.
Yancey: “The people in the IRS are just like a cross-section of humanity. There are very kind people there, and there are very dysfunctional people who probably shouldn’t have a job like that. I think the vast majority of them are honest people who are in a very difficult position”.
Oh yea, honest people who are in a very difficult position. Actually I wish TIME would ask the tax collector “why are they in a very difficult position?”
You can read the full “Confession Of A Tax Collector” interview [here]