Collection of Restitution Payments by the IRS

In the past few years it has become easy to think of Congress as a place where ideas go to die. They just seem incapable of passing laws that cry out for passage because of partisan gridlock. Yet, in the midst of their seeming inability to do anything, they passed a law in 2010 that makes complete sense and has the ability to change the game in collecting from taxpayers convicted of tax crimes. Les and I have talked about writing on the amendment to IRC 6201(c)(4) in the Firearms Excise Tax Improvement Act of 2010 since we started the blog. I will take a crack at it here. He has recently updated Chapter 10 of Saltzman to include a detailed discussion of the changes resulting from restitution based assessments.  I am sure we will write more because the impact of the law has already produced a number of interesting cases.


Historical Pattern of Collection in Criminal Cases

The basic idea behind the change to IRC 6201(c)(4) concerns assessment at an earlier stage. Because the IRS stops civil action when it pursues a criminal case, a typical criminal case presents the absolute perfect model for collection failure. An IRS Special Agent will investigate a suspected tax criminal for months or years while the IRS revenue agents and revenue officers stand on the sidelines. During this time the criminal investigation generally does an excellent job of destroying the taxpayer’s economic reputation and simultaneously drains the taxpayer of most or all of their liquid assets to pay for the defense against the criminal charges. After several months, or years, the indictment of the taxpayer finally occurs. The taxpayer pleads guilty or has a trial, the post-conviction actions occur and finally, after all of this the revenue agent would come in to begin the civil audit so that the IRS could assess the additional tax resulting from the criminal investigation. The taxpayer, who by the point is often incarcerated, has little interest in signing a consent form agreeing to the assessment, usually drags out the audit and often would go to Tax Court which further delays the assessment. At some point now several years after the criminal investigation began, the IRS would finally make the assessment and the revenue officer would begin the impossible task of collecting from a taxpayer who is either still in prison or recently released therefrom, who has no job – or a poor job, and has no assets.

How Restitution Based Assessment Changes the Historical Timeline

IRC 6201(c)(4) seeks to change this timeline. Whether moving the collection point earlier in the process but still post criminal investigation and conviction will make a real difference in collection still remains to be seen. If nothing else, the change can allow the IRS to eliminate spending the revenue agent’s time on this case freeing up the revenue agent to audit one of the 2 or 3 people in the United States still unlucky enough to actually get audited. The assessment resulting under IRC 6201(c)(4) comes from the amount of tax the court in the criminal case orders the taxpayer to pay to the United States as restitution. That assessment does not stop the IRS from auditing the taxpayer to establish that the taxpayer owes more tax than the criminal court ordered as restitution but it does give the IRS the opportunity to set a baseline on the assessment it can make and to make the assessment much earlier than before – especially in cases in which the taxpayer availed themselves of the Tax Court as a pre-assessment forum.

Challenges Facing the IRS in Collecting Even the Restitution Based Assessment

Challenges still exist in collecting from taxpayers who have gone through the criminal process and significant resource issues also exist. The challenges and resource issues exist both in exam and collection. One of the challenges these cases is the much higher likelihood in these cases of the transfer of assets to third parties to defeat collection. The ability to make a much earlier assessment and involve a revenue officer at a much earlier stage can make a real difference if the taxpayer has engaged in transfers of property in an attempt to defeat the collection of the tax. Given that the individuals in this group have already engaged in some criminal tax behavior, the existence of transfers from this group seems much more likely than in the general population.

In a criminal case the IRS uses significant resources to obtain a conviction. It knows at the outset that it may not recover an amount from the investigated taxpayer equal to the cost of the investigation. To get to the finish line successfully, it may spend hundreds or occasionally thousands of hours of the special agent’s time. Sometimes criminal cases also involve a significant time commitment of a cooperating revenue agent. In all events, the case uses a great deal of the precious few resources the IRS has available. The time spent on the criminal case may well represent an appropriate expenditure of resources if the conviction convinces others in the community to pay their taxes. That theory of deterrence drives the decision to devote the resources to these cases and to hold off collection until after the criminal case.

Having expended so many resources, the IRS exhibits much reluctance to walk away from these taxpayers even where its actions have rendered them incapable of paying the resulting taxes. The failure to pursue these individuals vigorously to collect the tax might reflect poorly on the IRS since convicted tax criminals represent “the worst” taxpayers and those most deserving of the full complement of collection powers granted to the IRS. Yet, using those powers on these individuals often proves a waste of time since many of them have little or nothing left with which to pay the taxes.

With the ability to assess the amount of the restitution order, the IRS could decide not to spend revenue agent time assessing additional taxes it will never collect. It could also decide not to spend significant revenue officer time chasing after a taxpayer who is in jail or just out of jail looking for their assets. With the new power to assess, it would seem logical for the IRS to convene a team of its employees at the end of the criminal case to make a decision, in conjunction with the probation officer, whether this taxpayer is worth any further expenditure of resources or whether the existence of the assessment, the subsequent notice of federal tax lien and the payment on the probation order represents the best the IRS is likely to do in that case. If so, the IRS could stand down further use of its resources awaiting a review of the case several years in the future.

I have not seen evidence that the IRS has adopted an approach similar to what I suggest here. I say that because the low income taxpayer clinic I direct has a few post-tax crime conviction clients who the IRS continues to pursue with revenue officer resources. These individuals have outstanding liabilities that merit attention from a revenue officer from the perspective of the total amount owed but they have nothing to offer to satisfy the liability except the meager payments they already make on the restitution order itself.

Probation officers work with these individuals to determine the amount they can pay toward the restitution order. They base their determination on factors similar to those used by revenue officers. Having revenue officers chase after these individuals to try to collect more taxes when the probation officer has already caused them to commit the maximum possible amount (and sometimes beyond) of the income to the restitution order makes little sense to me. In this context, I read the March 4, 2014, change to IRM 5.14.4 “Interim Guidance on Establishing Installment Agreements on Restitution-Based Assessments and Related Civil Assessments.” Before commenting on the new IRM guidance, I do want to mention that some convicted individuals do continue to have significant assets either under their direct ownership or held by nominees. I think the IRS should continue to pursue those individuals to the full extent of its powers. My comments here reflect a concern that the IRS does not triage these cases at the appropriate stage to determine which individuals have assets making it worthwhile to go full out and which individuals have little or nothing left with few prospects of additional income or assets with which to pay the tax.

New Manual Provisions for Establishing Installment Agreements in Restitution Based Assessments

The new manual provisions refer to the position of Advisory Probation Liaison (APL). They may be found at found here. The provision states:

Probation controls on taxpayers convicted of tax crimes are handled by Advisory. Probation cases with IRS-related conditions are monitored by Advisors designated as probation liaisons. The Advisory probation liaison is responsible for :

  • coordinating any civil enforcement actions with Technical Services (Exam) and any revenue agent assigned to the case,


  • monitoring all cases with IRS-related conditions of probation and following up on any OIs issued to the field exchanging information with CI and Technical Services (Exam) to reconcile the status and actions pending in all probation cases on a semi-annual basis


See IRM, Advisory Actions – Probation Cases, for further procedural guidelines.

The manual describes APL as a coordinator of action but does not seem to vest this advisor with the ability to make decisions on whether to work or walk away from a case. Maybe I am pessimist but I think that very few restitution based assessments will result in an installment agreement. The taxpayer resides in a prison or has recently resided there, almost always has a fairly decent sized liability since little point exists in prosecuting someone with a small liability and usually has no job or a poorly paying job. This situation does not generally cry out for an installment payment that will fully pay the liability. Add to that mix the fact that the individual will usually have the equivalent of an installment payment due to the probation officer as a restitution payment and that payment was set based on the individual’s ability to pay. To have a successful installment agreement, the IRS must find the post-conviction taxpayer who convinced the probation officer that he could not pay more toward his restitution each month but who actually has enough additional money each month to pay the IRS at a rate that will satisfy the assessment in full within 10 years.

The new manual provision requires the assignment of a revenue officer to any effort to establish an installment agreement in these cases. This provision makes sense because of the restrictions on collecting restitution based assessments. Putting the collection of these assessments into the hands of the Automated Call Sites would not work. These assessments require special handling because the IRS cannot compromise restitution based assessments. Compromising such assessments would amount to the IRS undermining the restitution order of the district court judge. So, the language of the new manual provisions carefully describes the need for installment agreements of these assessments that will fully pay the liability over the life of the assessment and not partial pay installment agreements. It does contemplate the possibility that the installment agreement might include assessed liabilities in addition to those assessed through the restitution process and that a partial pay installment agreement could work for those additional assessed liabilities.

The new manual provision requires the revenue officer to work closely with the Advisory Probation Liaison who will know the conditions of probation and who should coordinate with the Department of Justice and the personnel assigned there to work the case. If you are representing a taxpayer against whom a restitution based assessment exists, the best course of action for dealing with the IRS might involve locating and working directly with the Advisory Probation Liaison. Individual Revenue Officers may face few of these type cases and have little training on how to address them. They may the taxpayer to provide significant documentation to complete their files when the advisor may have a much better understanding of the entirety of the circumstances.

Realistic Options Facing the Taxpayer and the IRS Following Restitution Based Assessments

Where a restitution based assessment exists, the taxpayer has few realistic collection options. Offer in compromise is not available because compromising the liability amounts to the IRS undercutting the court’s restitution order. For the same reason a partial pay installment agreement will not work. Installment agreements will rarely work for the practical reasons discussed above. With the possibility of an offer or the likelihood of an installment agreement, the IRS and the taxpayer are left with currently not collectible coupled with a notice of federal tax lien. Some post-conviction taxpayers have sufficient assets to draw upon to partially or fully pay the liability. Some will have jobs that pay a good salary although even those individuals may not have anything left each month after making their restitution payments.

This manual change recognizes the legal need for special handling of restitution based assessments. It does not recognize the practical issues presented. The real collection success stories that will result from restitution based assessments will not come in the installment agreement area. They will come because of the early intervention of a revenue officer working with a Chief Counsel attorney finding hidden assets and using the federal tax lien coupled with the tools for recovering transferred assets. The IRS should focus its efforts on post-conviction taxpayers who have either transferred assets or have sufficient assets remaining which they have not voluntarily liquidated to satisfy the liability. Efforts to obtain installment agreements from this group seem like wasted efforts.

The Somewhat Counterintuitive Policy Case Against Tax Court Exceptionalism

Today’s guest post is the second in a two-part series by Ohio State law professors Stephanie Hoffer and Christopher Walker.  These posts are based on their paper The Death of Tax Court Exceptionalism, which is forthcoming in the Minnesota Law Review. My welcome and the initial post is available here.

The policy issues that Professors Hoffer and Walker raise fundamental issues concerning the Tax Court’s institutional relationship with the IRS. The main argument, that a less deferential scope and standard of review may in fact contribute to greater individual protections, is similar to an argument I made in a series of articles I wrote for the Houston Law Review, Tax Notes and the Community Tax Law Report, where I similarly criticize the Tax Court’s approach to CDP review:

The Tax Court’s approach…is arguably taxpayer friendly, as the consideration of evidence not before the IRS enabled the Tax Court to reach a conclusion different from the IRS’s. This in turn reflects the Tax Court’s historical concern with providing itself with an opportunity to determine a correct tax liability, notwithstanding any agency practices prior to a tax’s assessment…. Yet, a failure to abide by the APA’s general approach toward reviewing only material before an agency (called the “On the Record” rule in administrative law) creates some risk that the IRS will take less care with its procedures at the hearing-level. For example, the On the Record rule creates incentives for the agency to conduct adequate procedures and provide sufficient explanations, so that a reviewing court will be able to perform its task of considering what an agency has decided, and the decision’s rationale. Courts following the On the Record rule may conclude that the agency has acted improperly, through a failure to consider relevant material or explain actions rationally, which should result in a remand and hopefully corrective agency practices. Often, better agency practice initially, compelled by the searching light of judicial review into what the agency did, provides more meaningful taxpayer protections than the possibility of more searching review.

Professors Hoffer and Walker expand and improve my points that I made and bring into sharper focus the issue’s policy implications. – Les

In the first post discussing our paper The Death of Tax Court Exceptionalism, we introduced the legal case against Tax Court exceptionalism and why the Tax Court should be bound by the judicial-review provisions of the Administrative Procedure Act (“APA”).  The legal case should encourage the Tax Court to reverse course and consider itself bound by the APA’s judicial-review provisions—just like every other court that reviews federal agency action.  But the policy case reinforces the legal case and suggests additional reasons why the Tax Court should embrace the APA and traditional administrative law principles.

At the outset it is important to frame this policy discussion against the backdrop of the Tax Court’s likely concerns about deferring to IRS determinations.  Consistency and equity are among the most important policy goals in tax administration as well as in the modern administrative state more generally.  At first blush, the Tax Court’s use of less deferential review standards would seem to advance these goals because more searching judicial review of IRS actions allows the court to correct errors that would otherwise go uncorrected when reviewing on the administrative record and/or for abuse of discretion.


Indeed, the Tax Court’s concerns may be heightened in the context of less sophisticated taxpayers who attempt to navigate the system without representation.  The Tax Court’s current de novo approach may appear to best protect the unrepresented taxpayer.  In contrast, by confining review to abuse of discretion and prohibiting consideration of evidence outside of the administrative record, the APA limits a court’s ability to grant relief when it feels such relief may be merited.  Moreover, by following traditional administrative law doctrines, the Tax Court may be required to remand cases to the IRS when it finds error instead of just granting the relief outright.  The Tax Court may be reluctant to adhere to this ordinary remand rule—indeed, the Tax Court currently does not remand matters except in narrow circumstances—when it believes the taxpayer is entitled to relief and remand would unduly delay or, worse, preclude relief because the taxpayer would get lost in the process on remand.

Despite the common-sense appeal of more searching review, in Part III of our paper we advance a novel and somewhat counterintuitive argument:  the APA’s default regime is actually more effective at addressing these concerns by allowing the Tax Court to have a more systemic effect on IRS decision-making.  In other words, the policy objectives of consistency, efficiency, and equity (as well as leveraging agency expertise) are better advanced if the Tax Court only considers evidence in the administrative record and reviews for abuse of discretion to determine whether the IRS has engaged in rational decision-making.  In the event the facts in the record or the reasons contained in the IRS’s underlying ruling are found lacking, the Tax Court should identify those errors and remand to the IRS for reconsideration in light of those errors.

Why would this more deferential approach to judicial review actually be better for consistent, efficient, and equitable tax administration?  Because the status quo provides little comfort for the vast majority of claimants who do not bring the agency’s determination to the Tax Court and therefore receive no judicial review.  The Tax Court has no power to correct mistakes made in these cases, and if one assumes that the IRS has a similarly high error rate in unreviewed cases (and many unreviewed cases involve less sophisticated taxpayers), its incorrect assessments of income and ability to pay directly affect the equitable distribution of the cost of federal government.  By forcing the agency to improve its decision-making process—including better development of the administrative record and more well-reasoned agency rulings—the Tax Court can have a more profound effect on IRS processes and outcomes.

By abandoning tax exceptionalism, the Tax Court also can take advantage of the wealth of judicial experience in other administrative law contexts.  As detailed in Part III.B of our paper, courts have developed judicial doctrines and practices in other administrative law contexts to have a greater system-wide effect on agency decision-making.  For instance, as one of us uncovered in an empirical study on judicial review of immigration adjudications, courts have developed a number of tools that help alleviate the policy considerations against deferential review of agency action by enhancing their dialogue with agencies on remand.  These tools include: requesting notice of the agency’s decision on remand; retaining jurisdiction of the petition; setting a timeline for remand; providing hypothetical solutions; certifying issues for remand; obtaining concessions from the government at argument or otherwise during judicial review; and suggesting the transfer of the matter to another agency adjudicator.

By using these tools and developing more of its own, the Tax Court can begin a richer dialogue with the IRS—a dialogue aimed at not only improving the IRS’s procedures and decision-making in the case remanded but also in the agency overall.  Such dialogue is critical to improving the treatment of less sophisticated taxpayers—many of whom, unrepresented, do not even seek judicial review of the IRS’s adverse determinations.  That the vast majority of unrepresented taxpayers never seek judicial review of adverse decisions should encourage the Tax Court to engage in a richer dialogue with the IRS via the ordinary remand rule and these dialogue-enhancing tools in order to have a more systemic effect on the quality of administrative adjudication that takes place at the IRS.  It’s time as a policy matter for the Tax Court to abandon tax exceptionalism and embrace administrative law.


Summary Opinions for 4/18/2014

VillanovaWildcatsIt is absolutely gorgeous out today.  A great day to run the Boston Marathon, which my mother-in-law is doing this morning.  Go Jean!  I can’t imagine how the environment feels, with such emotion following last year.  My house will be cheering all the runners and the City of Boston today.

Last week had two great guest posts, for which we are grateful.  Professors Stephanie Hoffer and Christopher Walker of Ohio State posted the first part of their two part article on the Death of Tax Exceptionalism and the Tax Court.  These are teaser posts for a full article to be published soon. Professors Hoffer and Walker argue forcefully that the Tax Court and some circuit courts have failed to situate  court review of IRS determinations as within the mainstream of administrative law. We believe the article is important and practical procedural scholarship and recommend a read.  And, our (guest) blogger, Carlton Smith posted on timely filing from prison and the recent Sharma case.  Mr. Smith’s most recent post highlights this interesting specific issue, but, of course, also provides great insight into a range of other procedure areas like equitable tolling, appellate venue, and the Golsen rule.

To the other procedure items from last week:


  • Sticking with Carlton Smith. He sent us an email earlier this week updating us on the cases currently considering Rand and penalties.  Carl has written on this before for us, most recently in his very well received post, “Seven Tax Court Judges Depart From the Court’s Penalty Precedents.”  This week, the Tax Court published its decision in Faecher v. Comm’r, following Rand and indicating the Court has some duty to remove penalties even when not plead by the taxpayer, stating: 

The Commissioner generally bears the burden of production with respect to the liability of any individual for any penalty or addition to tax. Sec. 7491(c).  However, we have held that where the taxpayer fails to state a claim with respect to a penalty or addition to tax, the Commissioner incurs no obligation to produce evidence in support of the individual’s liability pursuant to section 7491(c), see Funk v. Commissioner, 123 T.C. 213, 216-218 (2004); Swain v. Commissioner, 118 T.C. 358, 364-365 (2002), at least where nothing in the record suggests the addition or penalty has been incorrectly computed. Where, as here, the record demonstrates that the penalty sought by respondent is erroneously calculated, we conclude that it should not be sustained, without regard to whether petitioner has stated a claim in the petition concerning the penalty. 

    Later in the week, other orders were issued in similar cases, with similar results.  Appeals in these cases can go to various courts, including the DC Circuit,      Second Circuit and Seventh Circuit.  I am sure Mr. Smith will continue to monitor on this matter, and provide us with additional insight.

  • I am happy to engage in some self-promotion for Villanova here (although somewhat envious, because Villanova wasn’t throwing this cash around when I was going through).  The Grad Tax Program has announced its Villanova Graduate Tax Program Assistantships for 2014-2015.  The program provides tuition scholarship  for up to two (2) full-time LL.M. students.  The recipients receive a complete waiver of tuition and academic fees for the Villanova Graduate Tax Program courses that will fulfill the requirements of the degree program (24 credits).  In exchange for the free tuition, you are enslaved to Keith Fogg for  20 hours of service per week in the Villanova Federal Tax Clinic for case-related and research work.  I jest, but the Villanova Federal Tax Clinic provides some of the best preparation for the actual practice of law, and prospective students would be hard pressed to find a better clinic director than Keith Fogg (apart from Les who directed when I was there).  Interested students must apply to the Villanova Graduate Tax Program  and indicate an interest in this assistantship on the program application in order to be considered.  The application deadline for Fall is July 31st.  Please email with any questions. 
  • Reuben Miller posted the final order to a LinkedIn group in Jackson v. Comm’r, the case where the Court questioned whether Notice 3219 was a valid SNOD.  We previously covered this case here, and here.  The Court held that the taxpayers were not mislead by the notice, it had jurisdiction to review the matter, and appears to have taken into consideration the fact that the Service will no longer be using the language in the form that it found questionable in coming to those determinations.   A nod should be given to the Tax Court for prodding the Service to fix a faulty form, and the Service should be commended for its prompt response to the problem (assuming reports are correct that the form has been retired and/or reworked).  Interesting, the Hoffer/Walker article I discussed above makes the point that the Tax Court could be doing more of this institutional prodding if the APA were held to apply to Tax Court proceedings.
  • The Tax Court last week in Ad Investment 2000 Fund, LLC v. Comm’r agreed with the IRS that taxpayers waived attorney-client privilege with respect to opinion letters from a law firm when the taxpayers attempted to invoke the affirmative defenses of good faith and state of mind even though the taxpayers were not raising a reliance of counsel defense.  This case will garner some attention, and we hope to have some follow up content in the near future. 
  • Slovakia has found a way to turn tax procedure into a successful game show, which the country seems to love and has assisted the taxing authority in increasing compliance.  I have not fact checked any of this, and it is all taken from a NYT blog found here.  The government had been losing revenue from its VAT because taxpayers were failing to comply with the reporting requirements.  Auditing and prosecuting was an expensive way to handle the issue, so Slovakia created a lottery where the government selected winners based on VAT receipts submitted to the government.  Each citizen (not the merchant) submits the receipts, which are then checked against the merchant’s filings.  Any purchase over one Euro can be submitted.  Every month, a receipt is selected, and the taxpayer either receives a car, or a chance to be on the Slovakian version of the Price is Right (I’m picturing Borat meets Bob Barker, which is probably totally wrong, and offensive to the Slovakians).  Although the article provides no direct proof, VAT collections are way up since the start, and many taxpayers have complained about merchants providing fake receipts or no receipts, making it easier to focus on cheats.  I’m not sure which is more effective, but Slovakia’s plan is certainly more interesting than the IRS YouTube videos. 
  • The Tax Court has found that an estate was not eligible to pay its estate tax installments under Section 6166, as it failed to make the election on a timely filed Form 706.  In Estate of W. R. Woodbury v. Comm’r, the estate did include a letter indicating its intent to make a Section 6166 election when it made its extension request.  Two and half years after the extension period passed, the estate filed its return and elected Section 6166.  The Court did consider whether the letter was an effective election under Section 6166, but it failed to include the requirements found under the statute and under Treas. Reg. § 20.6166-1.  Specifically, the applicable assets and their values were not included in the transmittals. 
  • Additional IRS notice regarding the various phone scams targeting taxpayers. The Service reiterated that it always sends written notices regarding amounts outstanding, and never asks for credit card information over the phone.  The notice also notes that the scammers are threatening deportation, arrest, shutting off utilities, and revoking driver’s licenses.


A Systemic Suggestion – Change the Music

One charge to the National Taxpayer Advocate (NTA) from Congress requires the NTA to look for problems that require systemic changes.  Going through, you can get to the place in the NTA’s portion of the website where you can notify the IRS of systemic issues you have encountered, explain the issue and suggest changes that need to occur.  The system goes under the acronym SAMS – Systemic Advocacy Management System.  Once you make your suggestion, the friendly people who monitor the system will get back to you acknowledging receipt of your suggestion.  If they decide to pursue your suggestion, they will generally make further contact.

Any of you who actually call the IRS phone lines seeking assistance for clients, friends, family or your own tax issues, have the opportunity to experience the music played while you listen for the next available caller.  By the end of the semester, my students have heard this music a lot.  Sometimes, we do a music review at the end of the semester.  In other years we have talked about the psychological issues raised by the music the IRS chooses to play.  No matter how we choose to discuss it, the issue always comes back to how bad the music is that the IRS makes its callers listen to while they wait.  The long wait times now common when trying to reach the IRS exacerbate the problem with the music. 

On April 15, one team of students actually got through to the IRS within two minutes.  They were so excited; they rushed to tell me of their success.  Wait times are now so long and the music so bad I try to use this feature to discourage students from signing up for my clinic in order to keep the wait list low.  After further discussion of the problem, we decided to make a systemic request to the IRS that it improve its music since it does not seem to be able to improve the wait times.


We think the IRS has choices in the way it might solve the music problem.  If you read Steve’s SumOpp post earlier this week you noticed that once again a musician has a significant tax debt.  This week Courtney Love got singled out for having a large dollar notice of federal tax lien filed against her.  The Isley Brothers and Willie Nelson top the list of other singers who have had troubles in this regard.  The IRS could approach singers with wide fan bases who have some tax issues to work out a compromise by which the tax liability might be reduced or eliminated in return for the use of their music on the phone lines of the IRS.

If the IRS does not want to use singers who have run up tax liabilities as featured artists on its phone lines, it could have singers make charitable donations of their songs to the IRS for use on its phone lines.  This more pro-active approach would avoid the issue of rewarding past bad tax behavior and perhaps get a wider genre of music for its listening audience. 

If the IRS does not want to give tax benefits in order to improve its music selection, perhaps it could have artists seeking to reach a wider audience simply authorize use of their music to the IRS for its phone lines.  It could feature new artist every month or some similar time period giving exposure to artist while giving professionals who must call the lines again and again a break in the music to which they must listen. 

Many possibilities exist for the improvement of the IRS system of providing music while you wait.  Others may have better suggestions than these.  Upload your suggestions to the IRS SAMS system so that the IRS can have the benefit of your ideas.  If Congress will not give the IRS more money to hire people to answer calls or the IRS will not reallocate resources to its phone system and tax professionals must listen to hours of music, at least the IRS could devote a small amount of resources to improving the music people must listen to while waiting.  If the music improves, the disposition of the callers might improve at the time when the IRS employee finally has a chance to get to their call.  Who knows what the overall implications for tax administration could be as a result of these changes.

The Death of Tax Exceptionalism’s Next Victim: The United States Tax Court

Today’s guest post is the first in a two-part series by Stephanie Hoffer and Christopher Walker, who are an Associate Professor and Assistant Professor, respectively, at The Ohio State University Moritz College of Law.  These posts are based on their paper The Death of Tax Court Exceptionalism, which is forthcoming in the Minnesota Law Review.  In these posts and more fully in their paper, Professors Hoffer and Walker make the legal and policy case for why the United States Tax Court should reject tax exceptionalism and consider itself bound by the Administrative Procedure Act’s judicial review provisions.  This paper adds to the growing scholarly and judicial criticism of tax exceptionalism. 

The article is the most comprehensive work to date situating the Tax Court as governed by the APA.  What contributes to making their paper insightful is that they practice what they preach:  by combining the insights of a tax law expert (Hoffer) with an administrative law generalist (Walker), they more fully draw out the legal and policy reasons for why the Tax Court should follow general administrative law principles.  In particular, their policy argument—i.e., that the more deferential judicial-review standards of the APA will allow the Tax Court to have a greater system-wide effect on IRS tax determination and collection processes—should provoke an important discussion in both tax and administrative law more generally.  Post 2 in this series will address the policy issues; the first post summarizes the legal issues. As this paper is a working draft, comments on the paper  to the authors directly via email are particularly welcome.– Les

Tax exceptionalism—the perception that tax law is so different from the rest of the regulatory state such that general administrative law principles do not apply—is a trending topic among commentators and courts.  In February, for example, the Duke Law Journal hosted a symposium entitled Taking Administrative Law to Tax, with contributions from Ellen Aprill (Loyola-LA), Bryan Camp (Texas Tech), Kristin Hickman (Minnesota), Steve Johnson (Florida State), Leandra Lederman (Indiana-Bloomington), and Larry Zelenak (Duke).  [Video is available here, paper abstracts are here, and the issue should be available here in May[LB Note: Keith was a commentator on Professor Lederman’s paper at the conference.]

And tax exceptionalism is dying, with two well-publicized fatalities in 2011.  First, in Mayo Foundation v. United States, the Supreme Court refused to apply a less deferential standard of review to the Treasury Department’s interpretation of the tax code.  The Mayo Court indicated it was “not inclined to carve out an approach to administrative review good for tax law only,” finding “no reason why review of tax regulations should not be guided by agency expertise pursuant to Chevron to the same extent as review of other regulations.”  Second, in Cohen v. United States, the D.C. Circuit held en banc that the judicial-review provisions of the Administrative Procedure Act (“APA”) apply to a form of IRS guidance known as a notice.  The D.C. Circuit remarked that “[t]he IRS is not special in this regard; no exception exists shielding it—unlike the rest of the Federal Government—from suit under the APA.”  To be sure, “[t]here may be good policy reasons to exempt IRS action from judicial review [under the APA].  Revenue protection is one.  But Congress has not made that call.  And we are in no position to usurp that choice . . . .”

In The Death of Tax Court Exceptionalism, we call for the demise of another instance of tax exceptionalism:  the United States Tax Court’s longstanding view that it is not governed by the judicial review provisions of the APA.  In this post we present a snapshot of the legal case against Tax Court exceptionalism that is more fully developed in Parts I and II of our paper.  In a subsequent post we explore the policy implications of the Tax Court discarding tax exceptionalism and embracing general administrative law.


The Tax Court has declared that “[t]he APA has never governed proceedings in the Court (or in the Board of Tax Appeals).”  In other words, the Tax Court refuses to apply the APA’s default standard (abuse of discretion) and scope (confined to the administrative record) of review provisions.  Instead, the Tax Court considers the default in both contexts to be de novo, and only departs from de novo review when it determines that the Internal Revenue Code suggests a more deferential review standard.(As we explain in Part I of our paper, the Tax Court’s misguided view of tax exceptionalism may be largely a product of its unique history—including that Congress converted it from an agency to a court (in 1969) after the enactment of the APA (in 1946)—and the post-1969 expansion of its jurisdiction to adjudicate tax-related disputes.)

This approach contradicts general administrative law principles that every other federal court applies when reviewing agency actions.  As we explain in Part II of our paper, the APA establishes the default standards for judicial review of all federal agency action.  The IRS, an executive agency within the Treasury Department, is plainly an “agency” for purposes of the APA (5 U.S.C. § 701(b)(1)).  And while the Tax Court used to be an agency before the enactment of the APA, as of 1969 it is an “[A]rticle I . . . court of record” (26 U.S.C. § 7441).  For purposes of the APA, it is thus “a court of the United States” (5 U.S.C. § 702) and, for its review of IRS agency actions, a “reviewing court” subject to the APA’s judicial-review provisions (5 U.S.C. § 706).

That the APA governs the Tax Court does not mean the standard of review is always abuse of discretion or the scope of review is always confined to the administrative record.  Instead, these are the default standards, and the inquiry becomes whether Congress has overridden them.  Indeed, “[r]ecognizing the importance of maintaining a uniform approach to judicial review of administrative action,” the Supreme Court has instructed reviewing courts to “apply the APA’s court/agency review standards in the absence of an [statutory] exception.”  To depart from the APA default, the agency’s governing statute must suggest “more than a possibility of a [different] standard, and indeed more than even a bare preponderance of evidence”; the exception “must be clear.”

To illustrate how the Tax Court should conduct its inquiry into whether the APA default standards apply, we focus on three types of IRS actions reviewed by the Tax Court.  Check out Part II.B of our paper if you’re interested in that analysis.  In a nutshell, by starting with the APA, it becomes clearer which IRS actions are subject to the APA defaults (e.g., innocent spouse and collection due process) and which may not be (i.e., tax deficiency) based on congressional override of the APA defaults in the Internal Revenue Code.

Whether the APA’s judicial-review provisions apply to the Tax Court “is of more than passing interest.  It goes to the heart of the place of the Tax Court in our administrative system,” explained Judge Bybee last year in a dissent from a Ninth Circuit opinion that embraced Tax Court exceptionalism.  Now that the supersized Ninth Circuit has joined the Tax Court’s side of the split—with four circuits on the other side and the Eleventh Circuit somewhere in between—it is likely only a matter of time before the Supreme Court intervenes to declare the death of Tax Court exceptionalism.


Timely Filing a Tax Court Petition from Prison

Today, we welcome back frequent guest blogger, Carl Smith.  The title does not do the post justice because of the many issues raised by the “untimely” petition filed from prison.  Carl discusses a range of issues raised by this case including the prison mailing rule, equitable tolling, appellate venue and the Golsen rule.  All of these issues come together in this case in which the taxpayer misses his opportunity to obtain a Collection Due Process (CDP) hearing in the Tax Court in part because of bad advice he received from the Appeals Division.  While this post does not offer any great answers to taxpayers receiving bad advice from the IRS on a critical issue such as the timely filing of a Tax Court petition, Carl’s discussion of equitable tolling shows the path to overcoming the inequity of bad advice.  Allowing equitable tolling in a situation such as this would not hurt the IRS in any material way and would make all taxpayers, not just those with the peculiar problems of prisoners, feel better about the system we have for resolution of tax disputes.  In this post, Carl cites to some of the articles he has written on this subject.  I have also written on this subject.  When Taxpayer Bill of Rights 4 gets passed, this issue should be front and center.  Keith

On April 11, Judge Gustafson, in a long unpublished order, ”reluctantly” dismissed a CDP case because the petitioner filed his petition late.  See Harsh Sharma v. Commissioner, Tax Court Docket No. 5163-11L. To me, the ruling is subject to question on two grounds on which I have written or I have litigated in the past — i.e., (1) what is the correct venue on appeal in CDP cases and (2) can the 30-day period under section 6330(d)(1) in which to file a CDP petition be equitably tolled?  But, even if Mr. Sharma prevailed on appeal — such that the appeals court held that Judge Gustafson was wrong on both the grounds that I question — the taxpayer’s petition still would end up being dismissed.  So, I wouldn’t recommend he file an appeal.


The first thing about this case (a thing that is amazing) is that it took the IRS until November 2013 to move to dismiss for lack of jurisdiction — more than 2 1/2 years after the petition was filed and after the Tax Court had granted 4 IRS motions to continue scheduled trials (and this case deals with a jeopardy levy!).

The second thing about this case (a thing that is annoying) is that the IRS sent notices of determination sustaining both the jeopardy levy and upholding the filing of a notice of tax lien on January 11, 2011, thus statutorily requiring the taxpayer to file a petition in 30 days (i.e., February 10, 2011).  However, the taxpayer wrote to Appeals before February 1, 2011, asking for more time to file a petition.  In a February 1, 2011 letter, Appeals wrote back to the taxpayer and warned him that the filing period could not be extended, but incorrectly stated that the petition had to be filed in the Tax Court “within 30 days of this letter” (i.e., March 3, 2011).  This error really bothered Judge Gustafson, since the Tax Court received an imperfect petition on March 2, 2011.  It had been mailed from the Georgia prison in which the taxpayer was housed, and the envelope in which it came bore a prison stamp of February 24, 2011.  The taxpayer testified that he handed the imperfect petition to the prison authorities to mail on February 1, 2011 (apparently not waiting to hear back from Appeals about the extension), but the judge found this testimony uncorroborated and, sadly, irrelevant.  Why?

In 1988, the Supreme Court ruled that a prison inmate’s notice of appeal in a habeas corpus case was deemed filed at the time he delivered it to prison authorities for mailing to the court. Houston v. Lack, 487 U.S. 266, 270, 276 (1988).  The prison mailbox rule was subsequently extended and codified in Rules 4(c)(1) and 25(a)(2)(C) of the Federal Rules of Appellate Procedure.  In Crook v. Commissioner, 173 Fed. Appx. 653, 655 (10th Cir. 2006), the Tenth Circuit held that this prison mailbox rule, however, did not extend to filings in the Tax Court.  Rather, the section 7502 rule that timely mailing is timely filing applied, and, under it, the postmark on the envelope is treated as the date of filing.  Long before either opinion, in Rich v. Commissioner, 250 F.2d 170 (5th Cir. 1957), the Fifth Circuit had a deficiency case where there was evidence that a taxpayer delivered a Tax Court petition to prison officials for mailing a full 12 days before it was due to be mailed, but then the prison accidentally failed to mail it until contacted by the taxpayer’s lawyer sometime after the 90-day period lapsed.  In Rich, the Fifth Circuit, though angry with the government and finding the equities all on the taxpayers’ side, held that the petition was untimely and the case must be dismissed for lack of jurisdiction.  As noted by Judge Gustafson, this holding in Rich has never again been cited by the Fifth Circuit.  But, as Judge Gustafson also noted, under Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981), the Eleventh Circuit (which encompasses where Mr. Sharma was living) is required to follow the precedent of the Fifth Circuit from before the time the Eleventh Circuit was formed.  Judge Gustafson held that, since Mr. Sharma’s case was appealable to the Eleventh Circuit, under the Tax Court’s Golsen doctrine (Golsen v. Commissioner, 54 T.C. 742, 757 (1970), affd. on other issues 445 F.2d 985 (10th Cir. 1971)), the Tax Court was obligated to follow Rich and dismiss the petition because it was deemed mailed on the prison-stamped date of February 24, 2011 — two weeks after it was due to be mailed.  (Parenthetically, at least the Fourth Circuit has criticized and declined to follow Rich in the case of an incarcerated Tax Court deficiency-jurisdiction petitioner and has held that delivery to the prison authorities for mailing is the timely filing date — either under section 7502 or principles of equitable tolling. Curry v. Commissioner, 571 F.2d 1306 (4th Cir. 1978)).

In making this ruling applying the Golsen rule, Judge Gustafson mysteriously did not cite or discuss the recent case of Byers v. Commissioner, 740 F.3d 668 (D.C. Cir. 2014), in which the D.C. Circuit held that appeals of CDP cases from the Tax Court — where the case does not include a challenge to the underlying liability — are only properly appealable to the D.C. Circuit, not the Circuit of residence.  Although the D.C. Circuit has not had a case involving the prison mailbox rule and filings in the Tax Court, the D.C. Circuit has ruled (citing the Supreme Court’s opinion in Houston v. Lack) that an F.R.C.P. 59(e) motion to alter or amend a judgment — one filed in a district court by a prisoner in a 42 U.S.C. section 1983 case — is deemed filed in the district court at the time the motion is handed to prison authorities for mailing.  Anyanwutaku v. Moore, 151 F.3d 1053 (D.C. Cir. 1998). Thus, there is a good chance that, if Mr. Sharma appeals the dismissal to the D.C. Circuit, it would extend this prison mailbox rule to Tax Court petitions.  One difficulty in Mr. Sharma’s appeal may be what is in his amended petition.  Judge Gustafson’s order does not mention whether Mr. Sharma raised a challenge to the underlying liability therein; if he did so, the D.C. Circuit would transfer any appeal to it to the Eleventh Circuit.

Unfortunately, as I see it, even if Mr. Sharma could convince either the D.C. Circuit or the Eleventh Circuit to apply the prison mailbox rule, he would not win his case.  Judge Gustafson found no corroborating evidence from the prison that would support Mr. Shamra’s testimony that he gave the imperfect petition to the prison for mailing on February 1, 2011 (which would have been a timely mailing date).  Thus, Mr. Sharma will lose this issue either on a legal or factual basis.

Two pages of Judge Gustafson’s order are also addressed to the issue of the letter from Appeals that gave Mr. Sharma incorrect information about when he must file.  It was clear that Mr. Sharma’s imperfect petition was filed a day before the due date set out in that letter.  A frequent reason for applying the doctrine of equitable tolling is the defendant’s misleading the plaintiff as to the correct filing date.  This letter was clearly misleading.  Citing Tax Court case law involving deficiency, CDP, and whistleblower jurisdiction cases, however, Judge Gustafson held that the 30-day period in which to file a Tax Court petition under section 6330(d)(1) was jurisdictional.  A jurisdictional time period cannot be equitably tolled.  I was disappointed to see, however, that Judge Gustafson did not reconsider the CDP authority in light of recent case law from the Supreme Court that has severely limited the “jurisdictional” label generally to subject matter and personal jurisdiction — not “claims processing rules” like time periods in which to file.  (For an example of a recent opinion holding a filing period in an administrative agency not to be jurisdictional, see Sebelius v. Auburn Regional Medical Center, 133 S. Ct. 817 (2013).)  I have previously written articles in Tax Notes Today making the argument that under this recent Supreme Court case law, the periods in which to file a Tax Court petition under its innocent spouse (section 6015(e)(1)), CDP (section 6330(d)(1)), and whistleblower jurisdictions (section 7623(b)(4)) are not jurisdictional and are subject to equitable tolling.  See “Equitable Tolling Innocent Spouse and Collection Due Process Periods”, 2010 TNT 41-8 (March 3, 2010), and Friedland:  Did the Tax Court Blow Its Whistleblower Jurisdiction?”, 2011 TNT 100-10 (May 24, 2011) (Friedland, which I specifically criticized in this article, was one of the opinions that Judge Gustafson relied on in his order).  While Judge Gustafson ruled that the CDP-filing time period was jurisdictional — so could not be extended by the equities — he also wrote:

An error of this sort is most unfortunate. An agency charged with broad nation-wide responsibility and necessarily staffed by fallible humans can never avoid such errors entirely; but the discovery of such an error should incline the IRS to take action within its discretion to compensate for the error and to provide reasonable remedies for a taxpayer who has been disadvantaged by the agency error.

I am not sure what remedy the IRS could give Mr. Sharma for this error, since he has already been before Appeals, and the IRS cannot recompense him by offering him Tax Court review.  Now, I have an argument that subsequent Appeals CDP retained jurisdiction hearing notices under section 6330(d)(2) are appealable to the Tax Court, notwithstanding a contrary IRS regulation at section 301.6330-1(h)(2)(A-H2), but I am not sure that such an argument will win, even if the IRS were to give Mr. Sharma another hearing at Appeals.  Note, though, the recent opinion in SECC Corp. v. Commissioner, 142 T.C. No. 12 (Apr. 3, 2014), in which the Tax Court held that it need not give any deference to an IRS Revenue Procedure that appeared to limit the Tax Court’s jurisdiction to hear employee/independent contractor disputes under its jurisdiction at section 7436 (“We owe no deference to what an administrative agency says about our jurisdictional bounds.  See Fox Television Stations, Inc. v. FCC, 280 F.3d 1027, 1038-1039 (D.C. Cir. 2002)”; slip op. at p. 16 n. 5).

Nevertheless, even if Mr. Sharma were to be able to convince an appeals court that the period at section 6330(d)(1) to file a Tax Court petition was not jurisdictional and could be equitably tolled, I don’t think Mr. Sharma could get equitable tolling.  It was Mr. Sharma’s testimony that he gave the imperfect petition to the prison on February 1. Thus, he could not have detrimentally relied on the Appeals letter giving him an incorrect later date that was only mailed to him on that same date.

In sum, it is sad that Mr. Sharma has lost his Tax Court case, and disappointing that Judge Gustasfon did not discuss (1) whether Byers affected his Golsen holding or (2) whether Tax Court case law on what is “jurisdictional” is still good after recent Supreme Court case law on the subject, but Mr. Sharma would apparently lose an appeal no matter which way Judge Gustafson ruled on these issues.  Now that I am retired, though, I urge other practitioners to make these arguments to the Tax Court for it to consider in appropriate future cases.


IRS Regulation of Return Preparers: April 15 Edition

April 15 is an appropriate day to flag the issue of regulating return preparers. Last week the Senate Finance Committee held a hearing entitled Protecting Taxpayers from Incompetent and Unethical Return Preparers. Witnesses included Commissioner Koskinen, National Taxpayer Advocate Olson, a practitioner from Oregon (one of four states to regulate unlicensed preparers), Block CEO Bill Cobb, consumer rights advocate Chi Chi Wu and others. A link to video of the testimony and all of the witnesses’ written statements can be found here.

There are some good articles summarizing the hearing and the witnesses’ statements. (see for example last week’s article in Accounting Today). There is also robust public debate on this topic; for example the excellent op-ed by a law student from NYU who succinctly summarized some of the main points that advocates of additional regulation have made. That piece is entitled Rein in Shady Preparers(registration required). A good representation of the opposition to regulation is last week’s written testimony of Dan Alban (the lead attorney who successfully argued the Loving case), who is an articulate advocate. I have discussed my views on the importance of regulating preparers in prior posts.

The arguments regarding preparer regulation include the following: the proposals are anti-competitive and will drive up taxpayer costs, IRS already has enough tools to tackle the problem of incompetent or unscrupulous preparers, the process leading up to the IRS’s decision to impose the requirements was corrupted by corporate interests that would benefit from additional barriers to entry, and the real focus should be on cleaning up and simplifying the tax system.

I will not address all of these objections (and others) but make a few points below.


The rallying cry is tax simplification. It would likely drive down errors and reduce the need to use commercial preparers. Such a drastic streamlining of the code is unlikely. Thus we continue to see public policy choices represented in the code through credits, deductions, and other preferential treatment of economic decisions.

Refundable credits bring to the fore many views on tax simplification and the role of the tax code in developing social policy. The biggest refundable credit and the one that gets the most attention when it comes to errors is the earned income tax credit (EITC). Yet as I discussed in a post last month and as IRS research reveals, the largest dollar source of errors in EITC claims, commercial or self-prepared, relates to the residence of children. Yes there are some challenging and complex issues on that point (e.g., temporary absences) but legal complexity is not usually a characteristic of the residence issue.   Likewise the underreporting of Schedule C income is not fundamentally an issue of complexity. The largest components of individual tax gap stem from the limited information the government has about the source of the errors and the high costs that the IRS faces in detecting those errors through traditional tools of enforcement. It is those areas where nontraditional measures that increase visibility and accountability of preparers and taxpayers are vital tools necessary to maintain the confidence in the fairness of our tax system.

I do not mean to suggest that structural reform would not have an impact on the tax gap. Splitting the EITC up to account for its work and child characteristics may drive down the opportunity and incentives for taxpayers to misstate facts, as would potentially increasing the amount and availability of the childless EITC even without wholesale credit reform. Why might increasing the childless credit influence overclaim rates on the EITC overall? If a noncustodial parent with earned income was entitled to receive some meaningful EITC even without the presence of children, his or her incentive to improperly claim a child as a qualifying child decreases. The current EITC penalizes working non-custodial parents who may support families or spend significant time with children. Under the current EITC those adults are entitled to little or no benefits in many situations, although they may be able to claim the dependency exemption and child tax credit, thus highlighting the role of the preparer in developing the taxpayer’s facts and understanding the appropriate tax treatment.

Likewise, the individual underreporting tax gap is based on a series of differing problems that varies by taxpayer and by issues with respect to the same taxpayer.  Like the “family credits,” understanding and accurately reporting self-employment income are areas which would benefit from accuracy in paid preparer fact development and understanding.

Preparer testing and education are meant to be part of the IRS’s tool-kit, but that alone should not be the sole determinant of a wholly accurate return. A tax system will always need the ability to detect and sanction those who cross the line; testing and education are insufficient.

The IRS has many tools to influence compliance, and there are other measures that may be less costly that may also increase visibility and accountability of preparers and taxpayers. In particular, as Dan Alban has emphasized, the IRS’s uniform preparer registration requirements (undisturbed by Loving) provide an opportunity for IRS to understand preparers and communicate with preparers who may be taking aggressive positions. It is shocking how little the IRS even knew about preparers before this simple but key reform proposal was implemented a few years ago. Likewise, enhanced due diligence is really just getting started for EITC preparers, and recent tax reform proposals have called for expanding due diligence for other credits.  In his written testimony last week Block CEO Bill Cobb proposed juicing up taxpayer self-disclosure requirements for issues where preparers have heightened disclosure requirements (such as the EITC). This may reduce the incentive for taxpayers to rely on ghost preparers who are completely invisible to the system and encourage taxpayers who self-prepare to honestly report on their returns.

The additional costs associated with testing and education are a red herring and deflect the societal need to ensure accurate, honest tax returns.  The costs that are borne by the preparers and passed on to taxpayers have to be compared to the overall costs borne by the public at large when such a high percentage of commercially-prepared returns has errors. That is especially important given IRS research that suggests there are higher error rates among unlicensed return preparers as compared to other preparers. Further, to the extent that small preparers are less able to benefit from economies of scale and would likely be more directly impacted by testing and education costs, any program could provide waivers or differing fees depending on preparer size or complexity of the returns the preparer may be authorized to prepare for example. However it is important not to confuse complexity with the number of schedules.  A low-income taxpayer’s return may include several schedules to support a large refund, including Schedule EIC, and schedules necessary to claim other credits, such as other family status credits and education credits. Charging by the form should not dictate a higher cost which may be borne disproportionately by lower income taxpayers. The discussion surrounding complexity and costs I think can benefit from a more nuanced appreciation of the differences between legal and factual complexity.  I will pick this topic up in a future post.

On the cost side of the ledger few advocates point to the taxpayer costs associated after the fact compliance efforts. Those costs include the challenges of responding to an audit and/or dealing with collection following the audit of an improper return—easy for many readers of this blog but a potentially major obstacle for others. Responding to an EITC audit where the paid preparer did not complete the preparer due diligence form accurately, or honestly, is rich with costs to the taxpayer – missed work, retaining an attorney, requesting assistance from others to document the audit response, just to name a few. For those who owe money to the IRS due to the receipt of an improper refund, the stress of collection notices and the fear of the bills can lead to other problems with tax administration. The growth in retail establishments peddling offers in compromise and other help with the IRS, while good for the infomercial industry, creates another opportunity for exploiting unsophisticated taxpayers.

As a parting thought, the policy issues surrounding the IRS and the Administration’s request for Congress to pass legislation authorizing the IRS to impose testing and education requirements present an opportunity for informed and reasoned discussion on tax administration. It is easy to rail against the tax gap and high overclaim rates but the IRS’s task of reducing errors on any issue that is not characterized by information reporting and withholding is difficult. IRS in its judgment believes that it could do a better job administering the tax laws and working with preparers if Congress gave it the power that the DC Court said it did not have absent explicit legislative authority. Congress should give the IRS the tools it needs to do its job.  If it does give IRS those tools, the burden should be on the IRS to report on the costs and benefits of its additional powers. That would allow for further monitoring and evaluation based on facts.