Not to be gloomy on Tax Day, but the headline from an AP story the other day caught my eye.
An Indiana man has apparently filed suit against the IRS, blaming his wifes suicide on an IRS raid on their home in 2007. James Simon, 57, filed suit against the IRS and its agents, claiming that 10 IRS agents in bulletproof vests raided his familys home around 7:00 am on the morning of Nov. 6, 2007. Simon was away in Ukraine at the time, but his wife Denise and their 10-year-old daughter were there. She was apparently grilled about a family trust, farm subsidies and other tax matters, causing emotional distress.
In a suicide note, she later wrote, I am truly innocent of any attempt to evade taxes, launder money, commit fraud or any of the other things I am being accused of.
Government attorneys are denying any wrongdoing, but her husband has filed suit, claiming intentional infliction of emotional distress, negligence in obtaining and executing a search warrant, trespass, invasion of privacy and wrongful death, according to the Associated Press.
The IRS has been making efforts this past year to make it easier for taxpayers, especially those with low incomes who have been affected by the recession, to come to terms with offers-in-compromise and the like. However, this kinder, gentler side of the IRS has not always been apparent to many taxpayers, especially those who find themselves a target of an audit, examination, or even an early-morning raid.
Steven Miller, deputy commissioner for services and enforcement at the IRS, testified before the Senate Finance Committee on Thursday in a hearing on various aspects of this tax season. We recognize that some people are struggling to meet their tax obligations and need assistance, he said in his prepared testimony. The IRS wants to do everything it can to help those taxpayers who have lost their job or face financial strain, especially those who have done the right thing in the past and are facing unusual hardships.
However, Miller also discussed the agencys stepped-up enforcement efforts. Vigorous enforcement also encourages voluntary compliance, further increasing revenue, by generating public awareness of the consequences of not meeting ones tax responsibilities, he said.
National Taxpayer Advocate Nina Olson is familiar with the problems that taxpayers face, as her office is supposed to be there to help them deal with their IRS problems. She wants the IRS to be more responsive to telephone calls and to relax its tax lien-filing policies. She also noted in her prepared testimony that despite IRS commitments to improve accessibility of the OIC program and assist financially struggling taxpayers, last year the IRS accepted the lowest number of offers-in-compromise in a decade.
The IRS has erected so many obstacles to offers-in-compromise that fewer and fewer taxpayers are applying for them, and fewer and fewer offers are being accepted, she noted.
That has to change, or we could have more tragic consequences in tax seasons ahead.