Is there a Double Standard for Delinquent Taxpayers and Tax Cheats That Favors Powerful Individuals?

A recent Los Angeles Times article examined the resentment that’s brewing among Americans who feel that there is a double standard applied to delinquent taxpayers, which appears to favor powerful people like recent Cabinet nominees.

The most highly criticized nominee has been Treasury Secretary Tim Geithner, who owed $34,000 in back taxes and didn’t pay all of it until Obama nominated him.

His excuse? Geithner told the committee that he prepared his own federal tax returns during the first two years he worked at the IMF, 2001 and 2002, using a computer program that did not flag any problems.

An additional five other nominees had similar tax issues, inclucing Tom Daschle, who owed $128,000 back taxes.

While IRS commissioner, Doug Shulman, insists there is no discrimination when it comes to tax enforcement – If you have ever been in tax trouble, the treatment you received from the IRS probably differed greatly from that given to some of the President’s administrative nominees.

The LA Times reported that IRS employees have even lost their jobs for simply filing a late return or failing to report a few hundred dollars of interest income.

What happens if you don’t pay your taxes? I recently blogged about the consequences of not filing your tax returns and what you can do if you haven’t paid your taxes this year.

I know that a lot of individuals struggling in this recession will not be able to pay the taxes they owe for 2008. The most immediate reaction will be for them to not file their tax returns. What happens is that they then end up not filing for a number of years. And often, the IRS is slow in getting to their delinquent tax returns. So it’s important to file any tax returns that are due as soon as possible to avoid additional interest, penalties and potential IRS collection tactics, such as wage garnishment.

The IRS is cracking down on small businesses too. We are seeing an increase in small corps, LLCs and sole proprietors who’ve gotten behind on payroll tax deposits due to the current recession. And the IRS is not turning a blind eye.

At every level, the agency has become increasingly aggressive in pursuing tax cheats. And both individuals and small businesses are at a big disadvantage if they try to face the IRS alone. They need expert representation or they risk the IRS managing their cashflow via financially debilitating levies.

** If you have unfiled tax returns or other IRS problems, contact our specialized staff of tax attorneys, CPAs, EAs and tax professionals. Visit the Tax Resolution Services web site  for a free tax relief consultation or call us at 866-IRS-PROBLEMS.

More Tax Help, IRS News and Tax Relief Tips:

  1. Melt Your IRS Fears Away – Tax Help if You Can’t Afford to Pay Your 2008 Taxes
  2. KLOS Tax Tip #44: Individuals Get a Tax Break – But Get Tax Help if You Owe Back Taxes!
  3. Last Minute Advice For Recession-Burdened Taxpayers Who Can’t Afford to Pay Taxes and Want to Avoid IRS Penalties
  4. IRS Announces Unprecedented Opportunity for Recession-Burdened Americans to Settle Outstanding Tax Debts
  5. Have You Filed Your Taxes? Consequences Include Increased Financial Liability and Imprisonment

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3 Responses to “Is there a Double Standard for Delinquent Taxpayers and Tax Cheats That Favors Powerful Individuals?”

  1. With Tax Revenue Down and Government Spending Up, Individuals with Tax Problems Will Be Targeted By IRS | Tax Relief Tips from the Experts at Tax Resolution University Says:

    [...] to mention, it seems like you must have tax problems to be nominated by the Obama [...]

  2. IRS Files Tax Lien Seeking More Than $800,000 from Sen. John Kerry’s 2004 Presidential Campaign | Tax Relief Tips from the Experts at Tax Resolution University Says:

    [...] Kerry is the latest politician with tax problems to make headlines for outstanding IRS [...]

  3. Tax Relief News: Geithner’s TurboTax Defense is Not Reasonable Cause for Understatement of Taxes | Tax Attorney and Tax Resolution Services: IRS Help Blog Says:

    [...] recent U.S. Tax Court News, Treasury Secretary Tim Geithner, who owed $34,000 in back taxes and didn’t pay all of it until Obama nominated him, was not [...]

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