The Trial – How the Great Literary Work Lives on in the Offer in Compromise Unit

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As a college student I read this book by Franz Kafka. Working for Chief Counsel, IRS for over 30 years I did my best to avoid having the taxpayers I encountered feel as if they were getting the same treatment as Joseph K. Not everyone I encountered would give me passing marks on that goal but it seems like a basic government function.

Someone at the Brookhaven office of the IRS OIC unit has either not read the book and so does not appreciate the frustration a stone wall creates or read the book and enjoys bringing the fictionalized Joseph K to life through their system. I try not to make the blog a place to air grievances with the IRS but this post is a long complaint. Do not read further if you tire of this type of piece.  At the end, I adopt a suggestion from Les and offer our first poll.

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Last fall I submitted an OIC on behalf of a client who has already suffered much at the hands of the tax system and her spouse. She owes a very substantial liability as a result of her husband’s actions which have landed him in prison. I mention his status because it becomes relevant later in the story. For reasons I will not detail here, she was unable to obtain innocent spouse status though I believe she should qualify. After the final failure in the effort to obtain innocent spouse status, the tax clinic at Harvard, which began helping her at the tail end of her adventure to obtain innocent spouse status, filed the OIC mentioned above.

On January 17, 2018 Employee # 0182126679 of the OIC unit in Brookhaven wrote a letter informing the clinic and the client that he was closing the OIC case because:

“An Offer in Compromise cannot be considered that includes liabilities for which criminal restitution was ordered payable to the IRS. Only the district court that entered the restitution order can modify it.”

The statement is correct as it applies to the liabilities of the husband; however, he did not submit an offer. The statement has no applicability to my client. Her assessment did not result from a criminal restitution order. She was not convicted of any crimes and was assessed via the “regular” assessment process.

The letter from Employee # 0182126679 contains a phone number (844) 805-4980. It does not contain a fax number or any other means of reaching Employee # 0182126679 except his address. Upon receipt of the letter I responded to Employee # 0182126679 by letter and informed him that the criminal restitution exception barring offers does not apply to my client since her assessment did not result from a restitution order. I asked that he reopen the case and I asked that he contact me. I also provided him with the contact information of the Appeals employee handling this case since the offer was submitted in the context of a Collection Due Process case.

Although my letter to Employee # 0182126679 was sent on January 24, 2018, I have yet to hear from Employee # 0182126679. I have called the number listed above on several occasions and have listened to the “soothing” IRS hold music for over two hours on some of the calls. I am listening to it now as I write this post. We are on the 22nd minute of the current call. I have concluded that the number provided is a “dead letter box” that no one at the IRS picks up. The correspondence from Employee # 0182126679 is not the only correspondence from OIC examiners working in Brookhaven that has provided this number. Some examiners provide this number while others offer a number that rings on their desk. I cannot discern a reason for the difference but I know what a difference it makes.

I asked the Appeals employee handling the CDP case to provide me a direct contact number for Employee # 0182126679. He has not. His response was that his coordinator in Appeals who handles OICs made in CDP cases has not informed him of any action taken on the offer. That’s nice but I informed him of the return of the offer and provided him with a copy of the letter from the OIC unit. I would have hoped that would have mattered. It apparently did not. I could write another blog post on my encounters with this Appeals employee but one complaining post is enough.

I asked another employee of the OIC unit to provide me with a working phone number for Employee # 0182126679 as the general number for the OIC unit is not one that gets picked up by anyone. The employee with whom I last spoke would not provide me with a direct dial number for Employee # 0182126679 but said she would give him a message. He has not called in response to whatever message was provided to him.

The good news is that my client is spared from receiving collection correspondence while her offer sits in purgatory but I wonder how many others are out there trying to communicate with an office that gives a phone number no one answers and which refuses to respond to letters or to provide a working number. I would love to know the amount of traffic on this number and to know how many others have tried unsuccessfully to reach the OIC unit at the number it provides but does not answer. I am also curious whether the two year rule regarding offers and acceptance was stopped by the letter saying the offer was being returned or was not stopped since it was a CDP case or starting running again when I informed the OIC unit of the mistake. There are lots of things to think about when on terminal hold.

I had some interruptions in completing this post. It’s now the 57th minute of the call and the music is going strong with occasional interruptions telling me to stay on the call and the first available operator will assist me. I think the first available operator will answer the phone long after I have stopped working this case. Joseph K lives on.

The poll suggested by Les requests that you comment on this post to let us know which taxpayer rights you think are violated from the following choices:

The Right to Be Informed
The Right to Quality Service
The Right to Pay No More than the Correct Amount of Tax
The Right to Challenge the IRS’s Position and Be Heard
The Right to Appeal an IRS Decision in an Independent Forum
The Right to Finality
The Right to a Fair and Just Tax System

 

Comments

  1. Bob Kamman says:

    I am sure this problem can quickly be resolved with a call to your Taxpayer Advocate.

    • Brookhaven has gotten as bad as Memphis. I’ve had three bad experiences with them in the last couple months. They are looking for reasons to return stuff:

      Offer 1: Returned for lack of ES payments because they didn’t understand from the file that he doesn’t need to make them.

      Offer 2: Examiner calls me and is nice, then sends the client a nasty letter threatening to return the offer if ES payments not made simply because she has some SE income. And the examiner handed the file off to someone else.

      Offer 3: Wants additional documentation over and above what was in the packet when there is sufficient documentation to make a determination.

    • Often, not very expedient.

  2. Keith, you know better than I how to navigate the IRS internal [non-] communication systems. So you either have already contacted TAS or have a good reason for not doing so yet. I’d suggest a request to the ASO for a copy of the case file, followed up with a FOIA request if that doesn’t work. I’d also try to go up the chain at the Brookhaven OIC Unit and [if non-responsive] up the chain for the manager of the ASO. I’d also contact the national Director of Collection Policy [or whatever the appropriate title is]. And as much as I generally disapprove of this course, I’d consider a Congressional referral. This kind of gross systemic failure of communication is the kind of failing that most hurts the Service in public and Congressional perception of how the organization is functioning. I don’t think any level of management within the Serevice is too high to raise this kind of issue.

    As for the survey: I think the rights violated at this point are “the Right to Be Informed” and the “right to Quality Service.” I think it’s premature to consider the other others yhou suggest, since the case is still open. Good luck getting aa fair and equitable resolution in the end.

    Ron

    • There is no reason to disapprove of turning a case into a Congressional, if TAS has failed or declined assistance because “this case looks like it involves Collections, or Appeals, or both.” It helps if you can find a Senator or Representative who sits on an IRS-related committee. The Member’s staff will forward the case to IRS — probably TAS — where it will become more difficult to ignore.

      Constituent service is one of the duties of Congress.

  3. I called the number last week and got a pleasant person who gave me information on my OIC cases. I had to wait on hold for an hour. Of course, I have not heard back from the OIC officers I left messages for so little progress made.

  4. Try the Practitioners’ Hotline precisely at 8:00 AM Eastern Time.

  5. Keith (& Ron),

    You failed to list “All of the above” for the appropriate “rights” choice.

    Thanks for a great post that everybody doing this has had to put up with for too long.

  6. I can’t say that I’ve never had an experience like this. No one can work in an LITC for any period of time and not encounter someone like Employee # 0182126679. I’ve also come to believe that Appeals is a big Black Hole–it takes so long for cases to be acknowledged and assigned unless there is a pending Tax Court case that I almost always have to seek TAS involvement to move things along. But on balance, looking at my entire caseload over time, I have to admit that the vast majority of my cases get resolved, usually in the taxpayer’s favor, within a reasonable period of time. What is my secret? First, I clearly explain the reason for my call and the action I am seeking. I then describe the taxpayer’s personal hardship that has brought them to my office, be it an ex-spouse who cleaned out the family bank account and left the country, dumping the taxpayer with children, no child support, and a huge tax bill; or an 80-year-old who just put her husband of 67 years into Assisted Living because of his deteriorating dementia–how was she to know that if you get an extenstion to file, you still have to pay the tax on time? I use the taxpayer’s name. More importantly, I learn the IRS employees’ name, I address them by name, and I treat them kindly and with respect. It is not reasonable to expect an IRS employee who is treated as a number to treat my client as a human being. I approach each interaction as a mutual effort between myself and the IRS contact person to figure out and achieve the right result. If someone else in the organization appears to have screwed up, I am careful to never take it out on the person on the phone. (If you want someone’s help in fixing a problem, it’s best not to blame or blast them for the actions of others.) When approached in that fashion, most of the IRS people I deal with respond with care and, yes, even compassion. I do not disagree with Keith’s post–we have all had situations like his that make us want to tear out our hair. But when we consider the size of the IRS, its incredibly huge job, and its ever-decreasing budget, I marvel that most of the time I deal with hard-working professionals who mostly get it right.

    • I agree with Nancy’s comments about IRS employees in general and am always reluctant to write posts expressing too much criticism. The phone situation here placed a barrier between me and the employee that cannot be breached without knowing the direct number of the employee. I have received emails today in addition to the comments on this post that reflect the same frustration with the phone system at Brookhaven. Late in the day I received a call from a very nice IRS employee in Brookhaven in response to the blog post who informed me that the case was returned to the Appeals employee because of the criminal restitution code on the account which prohibits the OIC unit from working the case – even if placed their incorrectly. Apparently, someone, not in the OIC unit must fix that code before the OIC unit can move forward with its consideration of the case. Last month when I called the Appeals employee assigned to this matter, which is part of a CDP case, trying to track down the status of the offer, he explicitly said the offer had not been returned to him. That’s troubling but Nancy’s message is one I take to heart despite travails on individual cases.

  7. Norman Diamond says:

    I’ve been a Josef K for over 14 years except that I don’t owe any tax and haven’t been assessed any tax. My OIC was that the IRS would finally inform me of what position they considered frivolous and if I actually held that position then the penalty could be subtracted from the refunds they owe me. Of course the IRS ignored it.

    As the DOJ pointed out to the Federal Circuit, the IRS’s letters tell me to phone the IRS toll free at specified phone numbers. As I pointed out to the Federal Circuit, the IRS’s letters do say that, and also the IRS contracts with ATT to block my attempts to comply. Also as I pointed out, the IRS’s letters tell me to write letters to addresses specified in their letters, which I’ve usually done, and the IRS has been ignoring most of my letters since 2003. Of course the Federal Circuit didn’t care.

    The Federal Circuit overturned the IRS’s acceptance of my refiled 2005 return but upheld the IRS’s acceptance of my refiled 2007 return despite those two refilings suffering the same identical defects which the DOJ complained about even though the IRS didn’t complain about them. (I failed to fabricate a social security number for my wife when the Social Security Administration has never granted nor rejected the SSN application which the IRS used to require, and the IRS consistently rejected her ITIN applications until after those two refilings. Also my wife had to rely on two US Supreme Court rulings even though she’s a non-resident alien. The IRS and Tax Court accepted those failures, but the DOJ and Federal Circuit overturned the IRS for 2005 buy upheld the IRS for 2007. I complied with the Federal Circuit by filing a third return for 2005 fabricating an SSN for my wife and some documents, which the IRS also accepted but didn’t reply. The IRS evaded US v. Kales by deleting IRS records of the original return.)

    But unlike Josef K, I accidentally discovered TIGTA’s reports since there were news reports in 2012, and I’ve figured out a mighty strange coincidence between the form that, according to TIGTA, had its reports of withholding embezzled by IRS employees, and the form that was involved in tax years that the IRS complained about. Also unlike Joseph K, I accidentally discovered that the IRS didn’t obey a statute compelling them to investigate if the form might be accurate. As far as I can tell, my actual frivolous position was that it’s OK to declare withholding that was embezzled by IRS employees.

    Ah, back to phone numbers. Sometimes the IRS figures out that they don’t let us phone them toll free. So they tell us to call a number starting with 01267. That would be a number in northern Japan but it doesn’t actually seem to be in service. So does the IRS intend for us to go to the US and call that number? That would be an operator-assisted collect call from the US to Botswana.

    The IRS gave you diallable phone numbers? Lucky you.

    By the way for the benefit of any member of the US’s diaspora who someday finds this discussion from a Google search, at present Skype now provides free calls from Skype to US toll free phone numbers including the IRS. I couldn’t do it in 2003 but in recent years I’ve spent a few hours on hold without paying for it.

    Does the IRS affix sufficient postage on their letters to you? Does the DOJ? Do courts? Even US Supreme Court shows what it really thinks about Cook v. Tait by failing to affix sufficient postage even after this failing has been pointed out to them multiple times. I imagine USPS would like to sue organizations that repeatedly defraud USPS by affixing insufficient postage but USPS can’t because they can’t get a lawyer.

    “The Right to Be Informed”

    Fail.

    “The Right to Quality Service”

    Fail.

    “The Right to Pay No More than the Correct Amount of Tax”

    Fail.

    “The Right to Challenge the IRS’s Position and Be Heard”

    Maybe 50% fail after the IRS files a lien, but 100% fail before that point.

    “The Right to Appeal an IRS Decision in an Independent Forum”

    Fail.

    “The Right to Finality”

    Yeah right, this could be considered success if I agree to let them keep the withholding that their employees embezzled and if I agree to pay fines either before or after I finally figured out the reason for the fines (though they haven’t admitted the reason yet).

    “The Right to a Fair and Just Tax System”

    Hahahahahahahahaha. Wait, if I can escape from the loony bin after this, I’ll report another fail.

    Some people suggest the Taxpayer Advocate Office. In fact that office replies to letters initially, but then closes cases without trying to solve anything.

  8. not sure where you are, but perhaps having your case assigned to jacksonville or tampa, florida might help. all of the agents, revenue officers, appeals officers, attorneys, have been responsive, helpful, polite. i hope i’m not jinxing myself.

  9. David Ronquillo says:

    The situation you speak of is very common nowadays. I experience the non-call backs or the non-responses to faxes from revenue officers. And calling their alternative telephone number goes unanswered. Having also worked for IRS over 30 years, I began acquiring telephone numbers of Territory Managers and Area Directors and will not hesitate to give them a call to ask the revenue officer to call me. This usually resolves the problem and lets the TM or AD know there is a problem with their folks returning calls. As for the OIC specialist not understanding that the wife had a separate assessment for which she could file an OIC, that’s par for the course: they have too many offers and sometimes they look for reasons to simply get rid of them. As for the Settlement Officer, have to ask for a conference with the manager, and if that doesn’t work, their Area Director. It’s very frustrating but if enough Territory Managers and Area Directors start getting complaints about no call backs and stupid decisions, maybe things will change…then again, maybe not.

  10. Bob Kamman says:

    Let’s not look at this from the standpoint of Joseph K. Let’s view it through the eyes of Lane Dean, one of the characters in “The Pale King,” a study in bureaucracy by the late novelist and one-time IRS employee, David Foster Wallace.

    Wallace writes of him: “Lock a fellow in a windowless room to perform rote tasks just tricky enough to make him have to think, but still rote, tasks involving numbers that connected to nothing he’d ever see or care about, a stack of tasks that never went down, and nail a clock to the wall where he can see it, and just leave the man there to his mind’s own devices.”

    Apparently when there is an OIC from just one spouse on a joint return, the fellow in the Brookhaven windowless room with a clock on the wall must split the one account – let’s call it MFT 30, because the Manual does – into two “mirrored” accounts, let’s call them MFT 31s.

    It ‘s not difficult to see how, if the MFT 30 account is coded with the Restitution indicator, both of the mirrored accounts will be contaminated by it also.

    Somewhere at IRS there is also a windowless room with a clock where someone sits, knowing how to remove that code from the non-criminal spouse’s account. A crowd-sourced blog is probably just the place to find that employee.

  11. Norman Diamond says:

    About Florida: IRS employees in Jacksonville and somewhere else (I forgot where) were unfailingly polite but still useless. I don’t know if IRS employees in Plantation are polite or not because they’ve never answered any of my letters. By the way is there any official method to appeal an IRS failure to act, when the IRS doesn’t send a statutorily mandated notice etc.?

    About splitting master files: IRS instructions say that married filing jointly cannot be refiled as married filing separately, so the only times I did that kind of refiling were when the IRS coerced me to do so. Next, even though the Federal Circuit ruled that I, not my wife, was the frivolous spouse when I failed to fabricate an SSN for her when she couldn’t get a legitimate tax identifier, somehow the IRS started sending bills for a penalty to her instead of me. Instructions for both innocent spouse and injured spouse prevented her from using those forms so she wrote to addresses specified in IRS letters, but of course the IRS ignored her spousal defences. Finally I paid for her Tax Court petition, whereupon the IRS pointed out that the form for innocent spouse was revised in 2014 and she could use it now, Tax Court dismissed for lack of jurisdiction, the IRS acted anyway to stop billing her and start billing me again — and then the IRS replied to her innocent spouse form by saying that the IRS has no records that she ever filed a US tax return.

    Well, let’s see. Congress passed a law prohibiting the IRS from rehiring former employees who had been fired for malfeasance (the Speaker of the House blogged about that), but the IRS isn’t obeying the law (not sure where I read that). Could this explain why experts who are familiar with IRS operations, who know what is supposed to be done, who are polite, and who are honest as far as I’ve been able to see, are former IRS employees who HAVEN’T been rehired by the IRS?

  12. Keith,

    I can relate to the hours you spent on hold trying to reach the IRS Brookhaven OIC Office.

    I had a personal tax issue 4 years ago and spent 30 hours on hold trying to resolve it. Last month, I received a check from the IRS for this issue, but it is still smaller than my calculations so this might get dragged out even longer.

    This experience drove me to study the IRS call center and the fastest way to connect. I put my MIT education to good use and figured it out for some departments, but not OIC Brookhaven. I’ll share my insights with you via email.

    How does calling OIC Brookhaven normally work?

    Do you call the main number ONCE and they then assign you a specific case-worker and you get their direct number for followups?

    Or do you call the main number EVERY time and get transferred to the agent.

    How often do you need to call the OIC Brookhaven number?

    -Andrew

  13. I worked with a talented Singer and co-composed a song about waiting for the IRS. Enjoy.

    https://blog.callenq.com/im-still-hold-gabriela-flores/

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