They are not auditing people who were affected by Katrina

In the 1990’s the IRS was gutted after there were reports of overly aggressive collection tactics. The taxpayers went before congress and said whtever they wanted to but the IRS could not comment or rebutt because thay had to maintain the confidentiality of the taxpayer’s information (it has since been revealed that just about every taxpayer that went before the committee mischaracterized their tax liability or exaggerated the collection efforts). The questions asked of the IRS commissioner were distributed to everyone except the IRS before the hearing and seemed designed to make the commissioner seem like he was evading answer. What followed was a virtual gutting of the IRS’s enforcement ability (which led to a lot of tax dodging).

Now the current IRS commissioner is saying that he is holding back on enforcement activities against Katrina victims until after the election because he feels that this would create the same sort of negative publicity that would spur another inquisition of the IRS. I can understand that the IRS is subject ot the political asshattery of congress but how does the TIMING of when you go after Katrina victims for cheating on taxes make the IRS any more or less vulnerable to congressional asshattery? It was a HUGE mistake to step on the IRS back in the 90s but how is this restraint anything less than the basest political pandering if they intend to go after Katrina victims on November 5th?

This is the same commissioner who (after the estate tax repeal was shut down by congress for at least the third time) decided that he was going to fire half the people that audited estate taxes.

Directors come and go by appointment of the President, and they serve at his whim. This type of Fuckery is clearly designed to try to make the party currently out of power look bad, but as long as you look at the events in the light of reason as political campaigning designed to end-run election laws, you won’t get fooled.

  • meant to say “commissioner”.

At the same time, I have to think that auditing people affected by Katrina would be a nightmare. All of the lost records, the disruption, I just don’t know how you would do it.

The IRS needs to keep a happy medium between enforcement and not interfering with the lives of citizens unduly. Perhaps it needs to shift back towards the enforcement side, but I’m not going to be banging the drums to get Katrina victims audited.

Right before an election, politicians are looking for any edge in appearing to be ‘on the little man’s side’. Right after an election, they’re content and much more likely to let the IRS increase governmental revenue.

I guess my gripe is that there seems to be an intentional delay of enforcement until right after the elections.

I would tend to think it would be an easy win for the IRS auditor. They question a deduction, the Katrina-affected taxpayer cannot produce documentation to support it, case closed.

Cohan Rule.
"The Cohan Rule comes from a federal court decision, which is one of the oldest and best tax cases of all. Its legal citation is Cohan vs. Commissioner, 39 F. 2d 540 (2d Cir. 1930). …Today, the Cohan Rule is the antidote to the auditor who says, “no deduction without documentation.” However, acceptance of the Cohan Rule approximations is always discretionary with a court; a taxpayer is not automatically entitled to make an approximation in a tax matter. The IRS must be shown, by oral or written statements or other supporting evidence, a foundation on which a reasonable approximation can be based. " In the case of a natural disaster, there’s an easy excuse for missing records. However, many records aren’t kept only at your home- for example, Mortgage Interest amounts can be resent by your Finance co. Many records are with your credit card company- like business meals.

OTOH, Casualty losses are often bogus. Many dudes overstate the value of what they lost, and many “forget” to reduce the loss by the amount of insurance (etc) re-imbursement they got. :dubious:

For the casualty losses, they should audit. I’d skip many other audits, myself.

That’s interesting, thanks for the clarification. I’ve never had to submit myself to the tender mercies of the IRS myself, thank god.

Hate to say it, but for some, this tragedy was actually a good thing.

How long you want to give them a pass on their taxes because this holiday from audits will last until November 8.
This commissioner has also fired half the lawyers enforcing estate tax laws (some suspect this is to do an end run on the estate tax laws, its kinda like wanting to legalize drugs but you can’t do it so you just fire half your vice squad) and wants to hand over a significant portion of tax collection to the private sector.

God those scientologists are bigoted bastards.

So you’re saying that a lot of those people are underprivileged and so it is working out pretty well for them?

I’m guessing this urban legend is becoming engrained in the national psyche. I don’t have any statistics to back me up (I’d love to see some), so I’ll have to resort to anecdotal data. I personally know about 100 people who were affected by Katrina and Rita (don’t forget Rita). Not a single one of them would think the hurricane was a good thing. At the very least, they experienced the inconvenience of having to pack up and try to live out of a suit case for months. At the very most, I know people who lost literally everything they own.

I’m not saying there aren’t any people out there who started with nothing before Katrina, and ended up with free rent in a trailer and a $2000 voucher. But don’t fool yourself into thinking Katrina was a good thing for anybody except con artists.

Sorry for the highjack.