Tax Bulletin: March 2020, Volume 36, No.3

Current Items:

  • Love the DOJ
  • IRS Work?
  • Magic 72
  • Where’s My Refund?
  • New Form W-4
  • Knock Knock…Who’s There?


Love the DOJ

I still think President Trump made a huge mistake calling the lawyers at the Justice Department “thugs.” Having worked with Justice lawyers a century ago when I was an IRS lawyer they all seemed smart and dedicated. I think like elephants the president may find these lawyers have very long memories. And that calling anyone names may eventually bite one in the derrière. So I am sure with some satisfaction these current lawyers were happy to see that 1,100 of their former colleagues at Justice in an open letter called on Atty. Gen. William Barr to step down after he intervened last week to lower the Justice Department sentencing recommendation for the president’s longtime friend Roger J Stone Jr. These lawyers also urged current government employees to report any sign of unethical behavior to the agency’s Inspector General and directly to Congress. In case you missed it, the Justice Department prosecutors had recommended Mr. Stone receive a sentence of up to nine years. I am convinced that the poor president still doesn’t get it. He is not supposed to be running the country like he does his real estate empire. The day will come when he no longer has the mantle of protection from those “thugs” at the Justice Department who teaming up with IRS can make a formidable enemy. Anyone who has done criminal tax defense work can attest to that. He may also find his friends in the Senate abandon him for the then current head honcho. Stone by the way ended up with more than 3 years in the Can despite the influence peddling. Bravo DOJ.

IRS Work?

Perhaps it is you or someone you know that is scrambling around looking for their first job as an attorney. They know as well as you that the competition for those entry attorney jobs is stiff. Over the years I have been asked how to get a job with the Internal Revenue Service. In my day I was fortunate enough to be welcomed with open arms into the IRS District Council because I had had experience right out of college as an IRS agent. So it is with that in mind that I suggest those who are employment challenged to consider the fact that IRS hires seasonal employees in IRS collections. IRS will be hiring 1100 employees to deal with taxpayers who have balance due on their tax returns. This is not a glamorous position and certainly not easy. And let me make clear that it is poorly paid. The government salary position is GS-5. However for those seeking a resume builder and perhaps an intro to IRS service it may be a good start. I think my colleagues at the bar who are former IRS employees will agree with me that no matter what service you rendered IRS you will be considered by the agency almost as family for the rest of your career. While you may work for the most high powered law firm you must keep in mind there are thousands of law firms, but only one IRS. For those interested go to the IRS website IRS.gov for more information.

Magic 72

In the last bulletin I made note of some of the important changes to the retirement laws dealing with IRAs. For those workhorses who prefer to extend the tax advantages of having an IRA pass intact to their beneficiaries rather than spending a dime of the accumulated funds, I neglected to mention that the date for required minimum distributions (RMD) has now been changed to age 72 from 70 1/2. With the mortality rate somewhere around 78 that gives your average eager beaver about six years to enjoy a questionable retirement. I know there are plenty who say they love their work, but I understand that dead is forever.

Where’s My Refund?

People love getting tax refunds even though many don’t realize that they have in fact made the IRS and interest free loan. I heard a car dealership announce a program to give taxpayers double their refund against a new car. With that kind of logic perhaps taxpayers are right in making even larger loans to their favorite government agency. But let’s be clear. The most advantageous position to be in at tax filing time is receiving no refund at all. Keep in mind that there is a penalty for underestimating tax liability and that penalty will get automatically calculated by your tax preparation software. However, the money the taxpayer would have sent to IRS should be invested somewhere else. As a matter of fact IRS tries to process tax refunds within 21 days of the filing of a tax return. IRS will tell you that the best way to get that refund fast is to file electronically and choose direct deposit. For those anxious to find out the status of their refund the IRS has a tool @IRS.gov called “Where’s My Refund.” Taxpayers can use this tool if it’s been more than 21 days since the taxpayer filed electronically or six weeks since they mailed a paper return. Taxpayers can also use an automated telephone line at 800-829-1954 for the same information. Ordering an IRS tax transcript is not necessary and will not speed up the receipt of a refund.

New Form W-4

IRS has issued a new form W-4 and proposed regulations dealing with income tax withholding to reflect changes made by the Tax Cuts and Jobs Act and other tax legislation. Employees with prior form W-4 are not required to update and file the new form. For those who do not update the form, withholding will be based upon the W-4 previously filed. If there have been changes to the employee’s tax status the new form W-4 should be filed to take that into consideration.

Knock Knock…Who’s There?

“Hi, I’m from the IRS and I’m here to help you…” Nonfiling taxpayers with gross income in excess of $100,000 will soon have IRS collection agents knocking at their door. Many years ago the local IRS office conducted a program called Project Esquire. In it attorneys in the area were singled out as nonfilers. Those caught up in the net faced penalties as well as potential embarrassment and professional misconduct issues. Needless to say getting right with IRS is essential for a professional legal career. Those who have dodged their responsibilities because they are “too busy” may find their hard work to have been in vain. The newest assault on nonfiling is not limited of course to attorneys and clients should be so advised.