Stephen Olsen About Stephen Olsen

Stephen J. Olsen’s practice includes tax planning and controversy matters for individuals, businesses and exempt entities for the law firm Gawthrop Greenwood, PC.

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  1. Bob Kamman says

    And then this week we had the Tax Court case of Alvin Craighead (TCM 2013-246). This case illustrates that if there is a de minimis exception for IRS litigation, it is not used by Appeals and Chief Counsel managers with six-figure incomes, who assign staff to pursue two-figure assessments before Presidentially-appointed judges.

    Mr. Whitehead, pro se, an Oklahoman past age 65, had the typical VITA return in 2009: Social Security, $7,571 wages and $9,450 unemployment compensation, the first $2,400 of which was nontaxable. There were also a couple 1099’s for a $360 annuity payment and $354 in mineral royalties – income he didn’t recall receiving, but agreed might have been paid to him. He didn’t think it was enough to require a tax return. But his AGI, as calculated by Judge Elizabeth Paris (also an Oklahoman) in a 12-page opinion, was $15,335. After the $400 “Making Work Pay” credit, this resulted in a tax liability of $58.

    It’s likely that Mr. Craighead never met with the Appeals officer assigned to his case but located at an IRS “campus” hundreds of miles away. If he met with an IRS lawyer, it was probably not until a few weeks before his Tax Court trial. Those of us who worked there know that the career objective for some IRS supervisors is “empire building” – the more work you have, the more people you need, the higher your pay grade. There is no career benefit from closing cases early, even when they are obviously going to result in a waste of resources.

    Meanwhile, no one in the system suggested to the petitioner that he check the missingmoney.com website to locate the unreported income that he was unsure he received, and that resulted in the $58 tax liability. That’s not in their job description. If he does so, he will find some cash being held for him by the Commonwealth of Virginia. Maybe it’s for another Alvin Craighead. Virginia is also holding some property for a Keith Fogg, of Richmond. Of course, that’s also a common name. Then there’s Leslie M. Book, in Pennsylvania. Can uncashed Blue Cross checks be claimed as a medical expense? Are Disney dividends taxable when paid, or when collected?

    • Apart from the creepiness of that info out there on missinginfo.com, (and you taking the time to look me up!) this post reminded me of another development from a week or so ago. Out of Australia there is word of a more robust push tax return system where the government is proposing to prelodge the simplest individual returns, giving taxpayers the option of modifying but also allowing the prefiled return to stand. http://www.businessinsider.com.au/the-australian-tax-office-plans-to-introduce-one-tick-tax-returns-next-year-2013-10
      I am aware of the controversy surrounding ready return of proposals in the US, but it strikes me that a future tax system will better use and make available third party information. Perhaps that could have helped Mr. Craighead.
      As for me, well I suspect I need to keep better track of those 58 cent checks.

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