Everyday, I see how the IRS is responding to people hurt by the economy. The Journal of Tax Practice and Procedure asked me to write an article about it – “IRS Collections in Troubled Times.”
Current IRS enforcement is centered on recovering government money that was spent to stabilize the economy. As a result, the IRS is increasing its collection enforcement activities, with lien and levy filings hitting levels not seen since the mid-1990s.
The IRS has sought to soften the impact with public statements that it will attempt to be compassionate to taxpayers. To their credit, the IRS is trying to be sensitive to those who have had job losses and income reductions. But much of what the IRS is offering – like flexibility for missed installment payments – were available even in better times.
The reality is that fairness often comes down to individual situations and the IRS employee on the other end of the phone. I have seen compassion and indifference. There is some flexibility from the top; the essential question is how it is exercised.