GOVERNMENT OWES $45M IN EMPLOYMENT TAXESWASHINGTON, D.C. - The federal government is itself a tax delinquent, owing approximately $45 million in employment taxes, according to a report from a Treasury Department watchdog.
The Treasury Inspector General for Tax Administration said that the delinquent tax payments by federal agencies could adversely affect state and local government bodies, including school districts, in addition to harming the image of the feds. "It is critical to the image of the United States that federal government entities be held to the same standards as private employers," said the TIGTA report.
TIGTA acknowledged that the Internal Revenue Service has improved its efforts to collect delinquent employment taxes from government entities. But the inspectors blamed the IRS for not routinely tracking information on how cases are resolved, or gathering data on the causes of the delinquencies.
A special unit in the IRS's Brookhaven Campus, in Holtsville, N.Y., deals with cases of delinquent government employment taxes, but TIGTA complained that management information about the cases is not comprehensive enough to allow for sufficient oversight. The report points to a lack of comprehensive guidelines and procedures to guide the assignment, control and resolution of cases. As of December 2006, cases involving 99 government agencies owing $5.8 million had been awaiting resolution for over a year.
TIGTA recommended better coordination, information sharing and procedures. IRS officials told TIGTA that they agreed with the recommendations in the report, and said that they were taking steps to improve their management of the casework.
COURT BARS 'ABSURD' TAX SCHEME
ATLANTA - A federal court has permanently barred a Georgia man from advising clients that they do not have to pay income taxes because they belong to a group called the Yamassee Native American Tribe.
The court had enjoined Derrick Sanders from promoting the scheme in 2006, but U.S. District Judge Julie E. Carnes wrote that he "refused to back down from his absurd contention that the Yamassee are ... exempt from federal income taxes."
The court said that he has prepared forms for his customers to give to their employers to instruct them to stop withholding taxes from their wages. The permanent injunction requires Sanders to post a copy of the court order on his Web site.
Sanders claims to be Grand Master Consul of the Yamassee, previously known as the Nuwaubian Nation. However, the Yamassee has not been officially recognized as a Native American tribe by the federal government. In any case, all U.S. citizens and residents are required to pay taxes.
IRS WARNS OF E-MAIL SURVEY SCAM
WASHINGTON, D.C. - The Internal Revenue Service issued a warning about a new e-mail scam that has been hitting people's inboxes, offering unwary recipients $80 to participate in an online customer satisfaction survey that falsely purports to come from the IRS.
The e-mail contains "from" and "subject" lines that appear to originate from the IRS, as well as a copyright statement that also claims to be from the agency. The message includes a hyperlink that takes the unsuspecting recipient to an online survey that asks for the taxpayer's name, phone number and credit card account.
The IRS warns that the scammers may try to use the information to run up charges on the victim's credit card account. There is even the possibility that the scammers might call the victim and try to obtain further financial information so that they can get access to a bank account.
The IRS said, however, that it never sends unsolicited e-mail messages, and it never asks taxpayers to divulge their PIN codes, credit card numbers or similar information.
