Korntved & Associates
Your Place For Solutions To Tax Problems.
Politics And Settlements. Do you know who
you voted for? U. S. Senators and U. S.
Representatives
Please bear in mind the following statements are neither meant to endorse nor discredit any Government official. They are simply the facts. Korntved & Associates does not intend to endorse ANY party or candidate, whatsoever.
Politics has always been the most influential factor regarding settlements at both the State and Federal levels. There are times when politics favors settlement and vice versa.
States receive funding from Federal sources. States have more ability to settle when they receive more funding. So State flexibility in settlement directly follows Federal funding and is not discussed further here.
The Federal budget is currently
funding military objectives in
Interest rates have gone down but new home construction is as low as it has been in years. Mortgage companies and home builders have filed for bankruptcy. There have been many layoffs in other sectors too. Small family owned businesses have taken a beating in the last six or seven years. Big companies like GM and Chrysler have also had serious problems.
The economy is in bad shape. So taxpayers
are in bad shape as well. People are more cash poor than ever before. The vast
majority of middle class
What does that mean for anyone attempting settlement in the current political climate?
The answer is obvious.
Many people are more qualified for settlement right now than ever before BUT are getting rejected settlement offers more than ever before because of politics – politics in the form of procedure changes coming down the Internal Revenue Service pipeline to fund Iraq, Afghanistan and other overseas ventures.
The Internal Revenue Service has been caught in the political middle of the spectrum. The prior Republican administration has pushed the procedural administrative pipeline downhill time and time again. The rank and file employees who actually work the settlements with the changing procedures can see that collection is not possible. People are too broke. So offers end up getting rejected because new procedures disqualify taxpayers from paying a reasonable offer amount.
The Internal Revenue Service is still being politically hammered between Congress, the President and cash poor taxpayers. Political stress at the Internal Revenue Service has been overwhelming. Turnover has been continuous at the highest levels. During the Bush administration the Internal Revenue Service went through four Commissioners (Rosotti, Wenzel, Everson, Stiff) and three Treasury Secretaries (O’Neill, Snow, Paulson).
The rank and file employees have suffered too. The revolving door of procedure changes coming downhill has left many offer specialists unsure of how to evaluate an offer – or lacking the courage to accept one. Standards for settlement have changed on the fly numerous times. So most of the offers get rejected and end up in Appeals. Then, Appeals complains because offers are not being worked properly by offer personnel. It goes on and on.
The bottom line is the prior President has effected enough personnel change at the top to allow sufficient procedural change at the bottom which in turn almost renders the compromise statute ineffective.
But there may be better news. President Obama is a Democrat and Democrats are usually more friendly to taxpayers in settlement. Settlement procedures may become more workable down the road.
What do taxpayers do now? The answer here is obvious again.
Taxpayers have to keep making settlement offers – especially if they can not afford to pay the taxes. There can NEVER be another option - no matter who runs the country!
Taxpayers should never give up because political problems always go full circle. Eventually politicians with common sense win out and/or the public gets peeved and reacts accordingly at the polls. Either way, Congress and the President finally figure it out and relax the procedures so people can qualify for settlement without doing multiple offers.
It is unfortunate that politics renders a tax law ineffective at times. It is unfortunate that taxpayers have to submit multiple offers to get one approved. But that is politics.
Korntved & Associates ALWAYS recommends that taxpayers know who they are voting for when it comes to Federal, State and Municipal elections. Know the people in office and what they voted for or against between elections. Then vote accordingly when election time arrives. That is the only way to prevent periods of political insanity.
Remember, your vote is the
ONLY true unalienable right that you have! So exercise your right and vote!