It wants to settle cases before they go to trial. IRS attorneys are burdened with large workloads. Tax Court judges have more cases than they can reasonably handle. And it costs the government a lot of money to prepare for and attend trial. The IRS tries to keep this secret because revealing it would give the taxpayer an edge in settlement negotiations.
It doesn’t want to seize your assets. IRS collection agents love to make idle threats. Enforced collection is expensive for the government. The act of identifying, locating, seizing and then selling an asset requires many hours of IRS employee labor. Hours that could be spent collecting the delinquent taxes of other taxpayers. The amounts the IRS gets when it sells seized assets at public auction is usually only a small fraction of the asset’s fair market value.
IRS officials give taxpayers the wrong answer more than 30% of the time. They’d love to keep this one a secret, but they can’t. Oh, and if you get the wrong answer from the IRS agent, you can’t later rely on it to avoid an accuracy related penalty unless it’s been reduced to writing. But these IRS officials are instructed not to give written advice. Don’t call the IRS if you have anything but the most rudimentary tax question.
Entry level auditors and collection agents do not have tax or financial backgrounds. IRS personnel have great power over delinquent taxpayers. When a taxpayer contacts the IRS about a problem he assumes that the person he is speaking with has a thorough grasp of tax law and IRS practice and procedure.
IRS personnel – especially collection officers who work in the Automated Collection System (ACS) usually lack any financial background or training. But as anyone who has ever spoken with an ACS official before can tell you, this lack of expertise does not stop them from confidently advising taxpayers (and their representatives) as to what the law says, what the IRS procedure is and what the taxpayer should do to resolve the problem. They are advocates for the government’s interests, not the taxpayer’s.
The squeaky wheel gets the grease. Make enough ruckus and the IRS will accede to your demands. If you have a valid argument and present that argument thoroughly with appropriate supporting documentation and references to legal precedent, the IRS will typically grant you the relief you are requesting.