The IRS Commissioner, Charles “Chuck” Rettig, a former Los Angeles-based tax lawyer of 38-years, diligently made his rounds last year at virtually every major tax conference around the country.
The message –
“I’m an enforcement guy, I’m a taxpayer service guy. I hope to touch every aspect of the tax service.”
he said to an audience of over a thousand accountants at the 2019 American Institute of CPAs’ Engage conference.
He went on to say:
“The IRS has the ability to help this country, and this country has the ability to help the world, and as tax pros, you have the ability to help the IRS.”
He called on tax practitioners to help taxpayers and the IRS resolve issues quickly and transparently, by saying:
“It’s the responsibility of everyone here to get there first -- if your clients have issues, clean it up fast. I believe tax practitioners need to do the right thing. If you discover problems in preparing for an IRS exam [audit], let us know.”
On the tax enforcement front, he said:
“Taxpayers who are trying to do it right will have my support. Those who wake up with an idea of a creative way not to pay tax, I’m paying attention to that. We will have a much greater presence on enforcement than before. We will be in every neighborhood that we can be, we’ll be touching people, but a fair touch.”
According to the IRS’ own website, the mission of the IRS remains:
“Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.”
This mission statement describes the IRS’ role and the public’s expectation about how the IRS should perform that role.
- In the United States, the Congress passes tax laws and requires taxpayers to comply.
- The taxpayer’s role is to understand and meet his or her tax obligations.
- The IRS’ role is to help the large majority of compliant taxpayers with the tax law, while ensuring that the minority who are unwilling to comply pay their fair share.
So while IRS staff began 2020 with expectations of increased enforcement activity to encourage taxpayer compliance, when the pandemic hit around mid-March 2020, and Congress passed the CARES Act, the IRS quickly had to switch its efforts toward taxpayer assistance with stimulus payments and the implementation of payroll tax credit procedures.
On top of that, approximately 56,000 of its 80,000 employees were instructed to work from home. Much of this work-at-home workforce was slated to return to work in mid-July, but lock-downs around the country postponed their return to work. To date, it appears as though they will continue to work from home through the end of 2020, according to informal discussions with IRS staff.
Of course, without the ability to knock on doors to collect taxes, and visit taxpayers at their places of business to better conduct audits, IRS staff efforts toward enforcement of civil tax laws have been somewhat hampered. However, conversions with IRS staff lead me to believe that they have been quite busy enforcing the nation’s tax laws, though with a bit of a handicap from home.
IRS Criminal Investigation, on the other hand, seems to be unphased by the work-at-home directive as many of its prosecutions and investigations have marched forward, especially in relation to COVID-19 EIDL and PPP loan fraud. The Justice Department made such loan fraud cases a super priority and a number of cases have move forward with criminal charges and prosecutions with speed rarely witnessed in federal criminal cases.
Lastly, looking at the sheer quantity of new tax regulations being issued on a daily basis, it is clear that at least IRS attorneys and technical specialists remain extremely productive despite their requirement to work from home. Much of the Jobs Act and CARES Act tax legislation required interpretation and guidance. The IRS has been quicker than ever to issue guidance to taxpayers and tax professionals on how to apply these tax new laws.