IRS 2012 Taxpayer Advocate Report is out. It’s not flattering to IRS.
Perhaps the nicest thing Nina Olsen has to say is the most apparent:
The most serious problem facing taxpayers – and the IRS – is the complexity of the Internal Revenue Code (the “tax code”).
Mind you, she seems to be talking about taxpayers in US with that statement. The report does not even touch on FATCA or citizenship-based taxation, which was disappointing.
The complexity of the IRS Tax Code within US is nothing compared to the complexity for those outside the US–including for those of us who don’t even consider ourselves to be “US persons.”
Ms. Olsen does, however, address OVDI, FBAR and “draconian offshore penalties.”
OVDI did not distinguish between “bad actors” and “benign actors.” These “benign actors” include those who have dual citizenship but have never lived or filed tax returns in the U.S., people who inherited an overseas account or opened one to send money to friends or relatives abroad, refugees or immigrants from totalitarian countries who felt compelled to conceal their assets from the governments they fled, and Holocaust survivors and their children who are frightened that persecution based on national origin could happen again.
Ms. Olsen also has some harsh findings about identity theft:
Tax-related identity theft wreaks havoc on the lives of its many victims, who not only must cope with an emotionally exhausting crime, but may have to deal with the IRS for years to untangle their account problems.
Identity theft cases in the IRS and the Taxpayer Advocate Service are rising at an alarming pace. The IRS has nearly 650,000 such cases in its servicewide inventory, and may take six months or longer to resolve them. TAS’s identity theft caseload has soared more than 650% since fiscal year 2008.
And IRS wants to FATCA us?
We need to get this information to our elected officials in our own countries NOW–before they agree to turn over our private financial information to a foreign government which clearly cannot manage the less invasive information it has on its own residents.