IRS

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When the IRS Comes a-Knockin'

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If you get an IRS audit notice, you probably expect to spend hours responding to endless document requests, visiting bland government offices, and meeting with faceless bureaucrats. You might hope you get lucky and find yourself assigned to a pleasant, friendly examiner, one who acknowledges how intrusive and annoying the audit process can be. But you certainly wouldn't expect to wind up in bed with the auditor!

Vincent Burroughs is a 40ish contractor and amateur motorcycle racer in Fall Creek, Oregon. When the economy collapsed in 2008, his business suffered and he got behind on his taxes. In 2011, the IRS came calling. The auditor, Dora Abrahamson, recognized him from his motorcycle racing, and apparently liked what she saw. Burroughs claims Abrahamson started flirting with him over the telephone and by text message ("[I] need a hug badly, do you have one?"), offered him massages, and even sent him a "selfie" in a revealing pose!

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Sentencing Reform

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Back in 2007, a Los Angeles judge sentenced actress Lindsay Lohan to one day in jail for misdemeanor drunk driving and cocaine charges. California's prisons are notoriously crowded, so Lohan walked out of the joint after just 84 grueling minutes. She didn't even have time to change into an orange jumpsuit. Lohan's "sentence" drew headlines as an example of lax justice. But now comes news that a judge has sentenced a 79-year-old widow to less than one minute of probation — for tax evasion, no less. Can the punishment possibly suit the crime?

First, a little background. The Justice Department has made cracking down on secret foreign bank accounts a top priority. Those efforts got a huge boost when Bradley Birkenfeld, a banker for Zurich-based UBS, blew the whistle on the bank's efforts to help U.S. depositors avoid tax on their accounts. UBS settled the case by paying a record 780 million dollar fine and turning over information on nearly 5,000 U.S. depositors.

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You Think You Got Audited?

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Getting an audit notice from the IRS isn't anyone's idea of a party. But it's not the end of the world. Usually the auditor just wants to make sure you're entitled to the breaks you've claimed. Did you really spend as much as you reported on meals & entertainment? Did you really spend enough hours managing your rental properties to qualify as a "real estate professional"? If the IRS finds a mistake, they issue a "deficiency notice" and bill you for what you owe. How bad can it really be?

Well, just ask Raymond J. Lane.

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Party Time at the IRS

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You probably don't think a conference for a bunch of IRS bureaucrats would be much fun. Apparently, though, the IRS knows how to throw a party. Back in 2010, they hosted an event dedicated to "Leading into the Future" for 2,609 executives and managers in the Small Business/Self-Employed division. (You're excited already, aren't you?) It turned into a $4.1 million boondoggle, complete with first-class air travel and Presidential Suites at three different hotels, that even Jay Gatsby might appreciate.

We'll never know how many of our friends at the party woke up hung over the next morning. But predictably, someone blew the whistle on "excessive spending," and now we have another IRS scandal on our hands. Last week, the party poopers at the Treasury Inspector General for Tax Administration released a 56-page report titled