There is probably no more reviled agency in the federal government than the Internal Revenue Service. We hear many stories about the bad people in the IRS and how they have the power to destroy peoples’ lives. Recently, you have heard a number of politicians in Washington campaigning on destroying the IRS.
But what is the real story? Actually, the IRS is nothing but a federal bureau under the supervision of the Department of the Treasury whose sole purpose is to enforce the federal tax laws. So how do they write those laws? They don’t. The laws are written by the U.S. congress, and specifically by the House of Representatives.
The tax laws and the corresponding code are so cumbersome and complicated that no one fully understands them all including the people who write them. In fact, below are some quotes from sample congressmen over the years on their estimate of the total length of the entire tax code.
“The Internal Revenue Code and regulations now come in at one million words and 9000 pages.”
“The income tax code and its associated regulations contain almost 5.6 million words — seven times as many words as the Bible. Taxpayers now spend about 5.4 billion hours a year trying to comply with 2,500 pages of tax laws….” – U.S. Representative Walter Jones (R-NC)
“The IRS tax code is 44,000 pages and growing” – U.S. Representative Bobby Jindal (R-LA)
“The current tax code is almost 60,000 pages, longer than the Bible” – U.S. Representative Dave Hobson (R-OH)
“the current tax code, which at 1.3 million pages is twice the length of Tolstoy’s War and Peace” – U.S. Representative Nick Smith (R-MI)
“the federal tax code has about four times as many words as the bible. Accompanying the law are a staggering two-and-a-half million pages of regulations”
So if you run into your congressman and and you get into a conversation about your taxes and their eyes glaze over, it may be because they don’t know much more about it than you do.
I mention all of this because I noticed advertisements recently on the television from law firms offering to help you negotiate with the IRS on your delinquent taxes. Does that mean that all of the stories you have heard about the mean IRS arresting people and confiscating their assets is the same agency what is willing to negotiate with you about reducing your delinquent tax liability? Yep!!
In fact, my former associate, John, who specialized in helping people with their delinquent taxes was successful in that effort more than once. The case I remember the best was helping an entrepreneur who had lost his business to bankruptcy while, sadly, his wife had lost her good paying job.
He and John attended a meeting with a local IRS agent to try and negotiate a settlement. The client had his act together and brought with him all of the documentation about his bankruptcy and his wife’s job loss. More importantly he developed a spreadsheet on his finances for the previous year which showed that the family income was under water in terms of income vs. obligations.
After reviewing the documentation and conferring with her superiors, the agent reduced his tax obligation from fifteen thousand dollars ($15,000.000) to thirty five hundred ($3500.00) an amount he could more easily afford.
So, should we stop beating up on the IRS?? Not necessarily, they can still be a big pain in the neck. Just remember that the reason they currently have 150,000 employees is mainly due to a ridiculous tax code created by the U.S. Congress. If you have a problem with the IRS, don’t postpone contacting them or responding to their correspondence. The longer you wait the worse your problem gets.