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The IRS Goes After Taxpayers. Who Goes After the IRS?

Screenshot 2015-09-02 10.50.30From professional sports teams to politicians to professional tax analysts, the IRS is pretty much always being sued for a multitude of diverse reasons. So, take heart, the IRS is under scrutiny and pressure from every direction.  The big difference though is that, unlike you and me and every other taxpaying citizen who comes under pressure from the IRS, the giant government agency appears to be pretty bulletproof no matter who goes after them.

The latest sports team going after the IRS as reported in Accounting Today, is the Boston Bruins hockey team. They are taking the Internal Revenue Service to court for disallowing the team to deduct 100% percent of their away game meals as opposed to 50%.

According to the Accounting Today article, “Boston Bruins owner Jeremy Jacobs filed a petition in the Tax Court on July 27th of this year, disputing the 50 percent limitation on the meals provided Bruins players in their away games during the years 2009 and 2010. The Bruins practice of taking 100 percent of deductions for team meals during road trips was similar to the exception for employer-operated eating facilities, the petition maintained, since the hotels at which the team meals were consumed constituted its “base of operations” during away games.” 

The Bruins owner contends that the hotels in which the team stays during their away games is their “business premises.” As Jacobs, the owner states in the piece, “The away city hotel serves as the club’s business premises during the club’s travels in the away city.”

Tax law states that employers may normally deduct up to 50 percent of the cost of off premises meals for employees with this exception.  If the meals are furnished for the convenience of the employer and on the employer’s business premises, the employer may deduct 100 percent of the cost. 

We’ll see who wins this battle of the Bruins vs. the IRS. It could be a game that takes years since both, the IRS and the Bruins attorneys, are expert at delaying tactics.

Next to catch my attention is a lawsuit filed by Kentucky Republican Senator, Rand Paul, as reported by Bloomberg News. As they report, “The focus of the lawsuit is the 2010 Foreign Account Tax Compliance Act — FATCA to the initiated — which has made it much harder for Americans to have foreign bank accounts hidden from the IRS.”

So, here’s the gist of it. The IRS passed a law that lets them go after money wealthy American taxpayers are keeping hidden from them overseas. The IRS really wants it, and those trying to keep it from them want to keep it hidden. Senator Paul has a stake in helping them. He’s actually a plaintiff in the lawsuit, which usually means he has money overseas he doesn’t want the IRS to get its hands on. According to an Associated Press article for the Washington Post regarding the lawsuit, “It’s also been a logistical nightmare for the millions of Americans who live outside the country and are still required to file U.S. taxes. The law has also prompted some foreign banks to refuse U.S. customers rather than deal with the hassles.”

This next issue from Tax Analysts, an influential provider of tax news and analysis for the global community is making every attempt to hit the IRS where it could really make a difference. According to Tax Notes Today, ”Tax Analysts filed suit against the IRS on June 23, asking the U.S. District Court for the District of Columbia to compel the agency to release records of bonus awards it paid to high-level executives since 2010. Tax Analysts originally requested the bonus awards records in early February through a Freedom of Information Act filing, but the IRS has not said when or whether it would comply with the request.”

“It’s déjà vu all over again,” said Tax Analysts President and Publisher Christopher Bergin. “We’ve been at this game a long time. They’ve delayed and delayed and delayed and delayed, and they will continue to delay. And we think this is important information to keep them transparent and to keep them accountable.

“We have no agenda other than transparency,” Bergin said. “Sunshine is the best disinfectant. If there’s something wrong, sunshine will help fix it.”

Asked for a comment on the suit, an IRS spokesman said, “The IRS doesn’t comment on pending litigation.”

Paul Caron, writer for TaxProf. Com had this to say, “For those wondering what is the big deal about executives’ bonuses, first, it conclusively shows a complete contempt for the law on the part of the IRS. Second, there are the budget concerns. The Commissioner is crying poverty at every opportunity, but how can he do that when the IRS is illegally keeping executives’ bonus amounts secret?” He continues adding, “With the arrogance and lawless intransigence behind the rejection of Tax Analysts’ FOIA request, the IRS has hit rock bottom. IRS executives no longer even pretend to follow the law. After surviving the fallout from the Lois Lerner scandal, they have obviously concluded, with good reason, that they are bulletproof. “

These events certainly don’t alleviate the pressure regular taxpayers experience when the IRS comes calling. However, it might just make you realize that your issues are pretty minor in the larger scheme of things and you might not lose as much sleep!

 

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