As we blogged about earlier — IRS Revenue Officers in Hurricane Sandy designated disaster areas are forbidden from taking any ‘enforced collection actions’ until February 2013. That means no new levies or liens can be issued. So what are these Revenue Officers doing? Well you’ll be happy to learn that they aren’t sitting around playing chess, but rather, they are still hard at work, helping the IRS get all the revenue it can. It’s just that instead of collecting on tax cases within their geographic area, they are helping out other collection groups around the country.
Again, the IRS has quietly stopped any collection action on areas “affected by” Hurricane Sandy. “Affected by” is a government definition, so as you can expect, there is some connection to whether or not the area was actually affected by Hurricane Sandy. This policy of shutting down collections in New Jersey, New York and Connecticut is likely driven by the fear of bad press than any actual functional reason. First, an IRS tax levy or tax lien is as devastating and/or damaging with or without a hurricane. And second, while Long Island, Staten Island and New Jersey were certainly hit hard, in Connecticut, the only areas seriously affected were the immediate coastline and a few houses back. Our firm’s world headquarters is located squarely in the affected area in Wallingford, Connecticut. But I can tell you, not once did we lose power (some of that is certainly due to our municipally-owned power company, Wallingford Electric Divison, the best dang power company in the world). I didn’t lose power at my home. We were all at work the next day.
The IRS pays attention to public relations
As you would expect, the world’s largest and most powerful governmental agency, the IRS, is well-aware of the impact of bad press. Surely, the IRS was afraid of some story of a Revenue Officer levying the bank account to someone who lost their house to Hurricane Sandy. So instead of looking at each collection case, on a case-by-case basis, the IRS just issues a blanket prohibition.
The fear of bad press drives much of what the IRS does. That’s why they’re sure to go after unsympathetic figures for tax evasion charges. I can honestly say that someone who is self-employed making under $40,000 a year is far more likely to cheat on their taxes than someone who is considered “rich.” So why are all the tax evasion charges always involving more than a few thousand dollars? The answer is it appeals to the base jealousy.
It is also why the IRS won’t say why they won’t negotiate down a tax bill through an offer in compromise if they feel you are an unsavory character. If you’ve been convicted of fraud, or have been a tax protestor, the IRS won’t want to deal with you — even if you “got religion” of tax compliance.
And here — does it make any sense to start collecting on a case remotely, only to no longer be doing so in a few weeks when local collections resume? I don’t know the answer to that. Luckily I don’t need to.
So what to do
So if you happen to get a call from someone claiming to be from the IRS and any one of the following Connecticut, New York or New Jersey areas codes: 203, 914,212,646,917,347,718,917,631, 201, 551, 509,732, 848, 856, 862, 908, or 973, 203, 212, the call is probably legit. If it is their first time contacting you, they will give you their identification number and ask you if you have ever heard about Publication 1. If they do offer this information, then they probably aren’t from the IRS, but rather a tax resolution company posing as the IRS.
Revenue Officers are only assigned to the most serious of cases, so if one is calling for you, you probably want to get some real tax help. Don’t agree to anything unless you know it is a reasonable deal and you can actually afford to pay it.