The Bad News Just Keeps Coming for the I.R.S.

Just when I think I’ve heard it all about the troubles at the IRS, everything turns out to be worse than I heard:

  • Remember when I told you about how the IRS was rolling out a new way for people to sign on to their on-line systems, and that it was a bit invasive, difficult, and buggy? And then remember when I told you how the rollout was going poorly and generating a lot of push-back? Well, the awful just continues to pile up and now the IRS is scrapping the new sign-on process and going back to the drawing board. Meanwhile, some seven million people may have tried to use the new process to log in, a process that included sending in “selfies” for biometric testing, which attracted the ire of privacy advocates. The contractor who designed and operated the identification verification service says these people can request to have these selfies deleted. Reading between the lines, I think this contractor is going to try to force everybody to use the back-up plan that was already in place for if the automatic selfie-check didn’t work: to have a video chat with an employee who would “eyeball” the chatter to see if their identity matches up with what’s on their paperwork. This isn’t really any less invasive than the selfie method, but maybe it triggers people’s “big brother” alarms less. It’ll certainly be less automated and therefore more expensive and time-consuming.
  • But the IRS is no stranger to doing things the more expensive and time-consuming way. For example, their mail-sorting and -opening machines have been broken for a long time, and IRS employees now have to do the work by hand. This means that if you send them a check, it takes them longer than it should for them to get that check out of the envelope and into the U.S. Treasury. This delay also means the government loses out on interest they could be earning on that money. How much interest? About $165 million a year. It would only cost $650,000 to buy completely new machines, or $365,000 to repair the broken ones.
  • And remember how I told you how the IRS had stopped sending out some enforcement notices to taxpayers? Taxpayers were getting frightening notices suggesting that the IRS didn’t think they’d filed their taxes, when in fact their tax returns were sitting in an enormous pile of tax returns the agency hadn’t gotten around to processing yet. So the IRS said it would stop sending out a few types of notice until it got all that sorted out — but said that it couldn’t stop sending out a bunch of others because it might mean they’d lose their chance to go after genuine tax scofflaws. Well, now they’ve thrown in the towel and said they’ll stop sending out a dozen more types of notices including the balance due, balance due second notice, notice of intent to levy, and withholding compliance letters that are standard issue to tax resisters like myself.
  • And remember how I told you that the IRS had a backlog of some 14 million unprocessed tax returns and other taxpayer correspondence? Turns out it’s more like 24 million. Meanwhile: “The agency sought to fill 5,000 positions for several campuses across the country in time for this tax season but was able to hire fewer than 200.”
  • In other news, the IRS is eager to reduce the size of the underground economy by demanding more reports on gig workers and others who get irregular payments through platforms like Paypal, Venmo, Etsy, and Zelle. But this isn’t going smoothly either. It seems to be raising more resentment than tax money, at least so far. And it’s easy to bypass. If you pay someone using one of these platforms and explicitly say you’re paying for goods or services, maybe it’ll eventually get reported as income. But if you don’t say this, as far as the platform is concerned maybe you’re just sending a gift or reimbursing someone for part of a meal you shared where they picked up the tab. Is today’s IRS going to send auditors out to make sure nothing falls through the cracks this way? Yeah sure.

In other news:

  • The tax strike against the Edmonton Incinerator continues to attract more strikers as the early adopters prepare for their first day in court.
  • Turkish opposition politician Kemal Kılıçdaroğlu announced that he plans to refuse to pay his utility bills until president Erdoğan withdraws 50% price hikes instituted at the beginning of the year. Some Alevist cemevis have also stopped paying.
  • The ragtag human guerrilla war against the traffic ticket robots continues, with robots succumbing to human attacks or being frustrated by human ingenuity in the U.K., Australia, Brazil, Italy, and France in recent weeks.