The Internal Revenue Service (IRS) is perhaps the most unpopular government agency next to Congress, and the nation’s complex tax code doesn’t make things easier for taxpayers.
People spend more than 6 billion hours annually navigating the tax code. And that includes all the hoops and hurdles that the IRS throws in front of people for them to avoid a wage garnishment or bank levy.
So when the IRS got caught scrutinizing conservative political organizations with the words “Tea Party” or “Patriots” in their name, the nation automatically scorned it.
People make complaints against the IRS for a variety of reasons. For starters, taxpayers who are defrauded by tax preparers are in a bind. The agency issues refunds to people whose tax preparer scams the client out of his or her refund by rerouting the check to a different address. But if that tax preparer scams a taxpayer’s refund by altering the bank routing number on the direct deposit form, that taxpayer is out of luck and the IRS leaves them in the dust.
The IRS also receives a lot of complaints over its handling of identity theft cases. The IRS was tasked with about 650,000 identity theft cases in 2012 alone. But speed is a stranger to the IRS, with the agency telling defrauded taxpayers that it takes upwards of six months to settle their identity theft case due to its decentralized process.
IRS complaints also come from those who initially represent themselves while sparring with IRS agents. If you’re going into tax court without a tax attorney, you’re at a serious disadvantage. But that doesn’t mean the IRS has any special right to push you around before you appear in front of a tax judge.
Some IRS agents tell self-represented taxpayers that they shouldn’t hire a tax attorney because it complicates the process, but taxpayers have a right to representation.
According to the IRS’s Taxpayer Advocate Service, thousands of people have their refunds delayed for no reason, leading to a wealth of IRS complaints and bad reviews. The IRS tries to catch and prevent fraudulent refunds by delaying the processing for two weeks, and issuing a freeze for upwards of 70 days. If there’s too many red flags, the freeze can be permanent.
But the rise in fake refunds (thanks to identity theft) has left more and more honest taxpayers with their refunds delayed for no reason. The IRS postponed refunds for more than 1 million returns in 2011, but couldn’t authenticate 116,000 of them, leaving these potentially honest taxpayers to fend for themselves. About 21,000 taxpayers complained after feeling the IRS ripped them off, but had to wait about six months for an average refund of $5,600.
Some people feel they’re the victim of an IRS ripoff after having their returns postponed due to software issues. Some taxpayers who filed a Form 8863, seeking education tax credits, complained when their returns were flagged in mid-February 2013. Only a small portion of taxpayers seeking the credit had delayed returns, but that was enough to spur a fresh round of IRS complaints after refunds were delayed an extra 4-6 weeks.
If you’re being targeted by an IRS collection agent for back tax debt, you’ll likely want to file an IRS complaint after being subjected to the agency’s aggressive collection efforts. The IRS has been increasingly targeting taxpayers as Uncle Sam collects more money during difficult budget times. But a tax professional can help you navigate the IRS’s bureaucratic process and avoid the need to file an IRS complaint.
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