We recently read about a famous run-in of Congressman-Elect Andrew Clyde, GA-09, with the IRS. Clyde, a businessman (who happens to own a successful gun business, but the business type is irrelevant), made deposits into his account. Without much investigation, the IRS thought the deposits were "structured" to circumvent a $10,000 reporting requirement. Without warning, the IRS seized nearly $1 million of Clyde's money and "offered" to give it back if Clyde let the IRS keep $300,000. Clyde said, "No," and had to litigate. He was successful. Now as a Congressman, Clyde will get the chance to make life difficult for the IRS.
The Clyde story beckons IRS stories from our own grassroots. Chris H, last year, owed a balance to the IRS. Chris filed his return on the due date and included an electronic bank withdrawal in his filing. Shortly later, the IRS advised Chris by letter that the withdrawal didn't work; try again.
Chris went through the same IRS web portal and paid his balance precisely as he had done the first time. This time the draft authorization worked. But of course, Chris later received a letter from the IRS saying he owed them a "late penalty." Chris went back and checked his routing and account numbers on his return, and both had been correct. The IRS system just failed.
Did the IRS not have some responsibility that the electronic draft didn’t work the first time? The IRS had Chris’ email and confirmed the submission of his electronic filing with that email account. A private business would have let Chris know by email that the first payment attempt failed, giving Chris time to resubmit the payment. But the IRS is not a private business interested in pleasing customers. It is lumbering and bureaucratic.
The last report we heard was that Chris was going to appeal. Chris, if you’re out there, let us know how you made out. Chris shouldn’t have had to go through this process in the first place.
Our North Carolina FAIRtax-er and former Presidential Candidate (2016), Kerry Bowers, comments that Chris’ story highlights one of the most unfair points about our tax system. Some people pay no income or payroll taxes; some get back more in their return than they paid in both income and payroll taxes (Earned Income Tax Credit), and some get off at pennies on the dollar for what they have accumulated in debt to the IRS coffers. But be an ever-compliant taxpayer like Chris, and you’ll get punished for mistakes not even of your own making.
With the FAIRtax, this nonsense would go away.
Do you have any IRS stories? I would love to hear them and maybe publish them!
Yours In the FAIRtax Movement!
AFFT Grassroots Coordinator & Secretary
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