NEWS: For $40 Tax Error, One-Room School Faces $10,000 IRS Fine

A schoolhouse in Nebraska filed an error in a tax form that was less than $40 and which now results in a $10,000 fine for them. The district's accountant has made errors a dozen times in the past in filing tax returns. Now the school is asking for aid in paying this fine and trying to sell the only vehicle they have, which transports the pupils to school.



This is really sad, and how do you go from a $40 error to a $10,000 dollar fine on top of that. To be frankly honest, fire the accountant, slap the accountant with charges to pay the school for the error. The school district should pay the fine, not the school itself.

What's the end result to be? Possibly another schoolhouse, one of America's few and last types of schools to be shut down? These children may have to be dispersed out to other schools for a mere $40 error.

[edit on 17-1-2005 by Banshee]

The problem is not the school or its accountant. There's one other candidate.

One other candidate, who?

Originally posted by mscbkc070904
One other candidate, who?

The Internal Revenue Service perhaps?

the problem is the irs would actually levy a fine like that to start with.you cant fight the irs (intra-national ripoff system)

I know, but the school should at least get a PI on this and see if the IRS dropped the ball...knowing the way they are, they probably sent 3 notices in a week and then never said another thing, then did an audit and bam! Well cut them a bill they didnt pay. Without even looking into what really happened. But of course the way things work it will get tied up in courts for 2-4 yrs and cost 30x as much in legal fees just to get the 10k dismissed. Either way your screwed.

I think there are special tax courts you can fight them in relatively cheaply. But this fine is absolutely ridiculous...I bet the IRS will change it on their own especially if this continues to get publicity.

This is why the IRS should be abolished.

How can they expect one to fill out tax forms correctly when half of the people in the IRS's employ barely know the tax code?

I heard a story a few years ago where a group of pseudo-Gestapo broke into the house of an old man & woman and scared the crap out of them. These men were armed. They were also in the wrong house :shk: and yes, they were IRS.

Taxmen are armed here ?????

Feck me ! - theres something wrong about that if its true !

Originally posted by Pisky
I heard a story a few years ago where a group of pseudo-Gestapo broke into the house of an old man & woman and scared the crap out of them. These men were armed. They were also in the wrong house :shk: and yes, they were IRS.

Taxmen are armed here ?????

Feck me ! - theres something wrong about that if its true !

I don't think IRS employees are ever armed, but they can be accompanied by armed FBI agents if they are executing a search warrant to seize documents, etc.

[edit on 1/18/2005 by djohnsto77]

A schoolhouse in Nebraska filed an error in a tax form that was less than $40 and which now results in a $10,000 fine for them. The district's accountant has made errors a dozen times in the past in filing tax returns. Now the school is asking for aid in paying this fine and trying to sell the only vehicle they have, which transports the pupils to school.

That old saying comes to mind~ "Only in America!" what the hell is wrong with people these days? I hope theres a deep and decidedly horrible place in hell for beurocrats! [Thats beurocrats from anywhere by the way ]

[edit on 033131p://01013 by instar]

I don't mind the irs. I paid 600 dollars in federal taxes this year and no state income taxes. I get 4900 dollars back. A lot of my income in non taxable though as I am in the military and I fall into the low income bracket so I get the child tax credit. GO IRS YEAAHHHHH.

Originally posted by donquad2001
the problem is the irs would actually levy a fine like that to start with.you cant fight the irs (intra-national ripoff system)

that's utter nonsense.

I battle them from time to time and they don't win all the time. I've had $25,000 penalties knocked off with a phone call and I've handled a few non-profits that have had penalties larger than 10k over late filings that the IRS has abated.

The problem is the accountant making those mistakes and then, clearly, not being able enough to get the penalties removed.

Originally posted by Crakeur
The problem is the accountant making those mistakes and then, clearly, not being able enough to get the penalties removed.

The problem is that in a study (and I can't find a link) half the people employed at the IRS made the same mistakes accountants make. That makes the overly harsh penalties that much worse. And no I don't expect people to be perfect, but I do think IRS employees should know the tax code at a little bit better rate.

Some IRS facts:

there are now are 115,000 IRS employees to interpret and enforce this monstrosity. Incredibly, the IRS now has more employees than the Environmental Protection Agency, the Occupational Safety and Health Administration, the Federal Bureau of Investigation, the Drug Enforcement Agency, the Food and Drug Administration, and the Bureau of Alcohol Tobacco and Firearms--combined......

...Today, without a search warrant, the IRS has the right to examine the personal papers and financial documents of American citizens. Without a trial, the IRS has the right to confiscate private property--and these seizures are becoming more and more routine technique for collecting suspected unpaid taxes. Meanwhile, twice in the last five years the IRS has been reprimanded by the Justice Department because hundreds of IRS auditors and clerks were caught illegally snooping through the returns of friends, neighbors, and celebrities.

I hardly think this will stand, but even if it does, with the national publicity there will be those who will come forward to foot the bill. The IRS has been trying to restructure to become less oppressive in it's tactics and I highly doubt that they will welcome the publicity. This will work itself out.

I would imagine that is the very reason they went public with their problem.

Overall, teh IRS should just abolish the 10k fine, go back the $40 that is owed and attach interest, correct interest on the late charges and square off with that. Cause right now its Tax Season and the IRS doesnt need more BS. IRS needs to be audited itself on a more regualr basis or when levying fines as such, they shoudl investigate it more, document what they investigate and if the client is wrong then they have everythign to show they are wrong and did nothign to fix the problem. This would save haertache and pain for everyone. Like most companies that bill, they just bill you, they dont look at anythign that seems off the wall. Like for instance, my wife had a cell bill, her normal bill was 45 a month for 2 yrs then all of a sudden 2 months straight her bill was 400-500/mo...she told them about it and they looked and said nothing unusual...she pays the bill calls back 5 days later, after getting things fixed, the new bill now is 150...they never fixed anything...she got really pissed...then she pays that gets everythign fixed AGAIN...calls back a month later owes another 250. Now I get on the phone chew ass, and get every supervisor on teh floor on the phone with me...and tell them fix it now or I will take you to court casue this is highway robbery, you tell me you fix the problem 3 times and nothign is done.

They go thru it and in 5 min, they fix the problem, and credit my wife $878 back to her, cause their system was screwed up. But the point is, its obvious that you are paying a certain amount then all of a sudden you have a spike and everything is the same and nothign has changed...if you know what I mean or trying to point out.
Oh well, if I didnt make any sense to you, at least I knew what i was tryign to say.

I have a good friend who is an irs agent and he hates his work. They used to brag abbout the fat cats they were bringing down until sometime in George Bush seniors term a hands-off approach was given for the rich and famous. Agents were instructed to go after the middle and lower-class, 'because that's where the stealing was". If there's a big case that leaps out to agents it has to be approved. I've known this guy most of my life and says early retirement is their goal.

Originally posted by kazi
I have a good friend who is an irs agent and he hates his work. They used to brag abbout the fat cats they were bringing down until sometime in George Bush seniors term a hands-off approach was given for the rich and famous. Agents were instructed to go after the middle and lower-class, 'because that's where the stealing was". If there's a big case that leaps out to agents it has to be approved. I've known this guy most of my life and says early retirement is their goal.

in Bush Sr's presidency the IRS was still being scolded for their aggressive approach to audits. agents were charged with harrassment and some were caught taking bribes if I recall correctly. there was an overhaul and an effort to turn them into "the new and friendlier IRS." I've come across agents that are nicer and easier to deal with and I've come across some real tough nuts.

with regards to audits, they pull less than 1% of the returns for audits. they don't have the manpower and they are so backlogged that the audits I have seen have all been from 3 years prior (as far back as they can go for an initial audit). of the audits I have seen, they were all either late filers or they had something out of the ordinary on their return which resulted in major deductions. two were top bracket filers (so much for the leave the rich alone theory) and one was middle level.

they like to pick a group and audit them. doctors, artists etc. I've heard they are going after self employed taxpayers this year. any schedule c filers could be at a higher risk of audit.

Go to the We The People web site at www.givemeliberty.org... if you are interested in learning more about the income tax system,and much more. WTP is not on the fringe like so many others. Instead, WTP seems to make an earnest effort to be as straightforward and honest as possible in their approach to these issues.

A recent item of interest posted on the WTP web site is this about a lawsuit that is now in the 2nd Circuit Court of Appeals:

***************.
"Schulz (the WTP President) had sued the IRS in District Court to quash the Summons claiming it was a direct infringement upon his First Amendment Rights, including -- and primarily -- the Right to Petition.

"Even though defendant IRS did not file any response to the lawsuit, the District Court decided in the government’s favor. At the Appeals Court however, IRS finally did respond, only to orally argue that Schulz’s lawsuit should be dismissed for lack of jurisdiction because – in their words – IRS Summons “can be ignored without consequences” until IRS pursues additional enforcement actions through the District Court.
******************.

Isn't that interesting. IRS serves a summons on a taxpayer who challenges it in court. IRS never responds to the lawsuit. Even so, the District Court decides in IRS' favor. Then, on appeal, IRS argues that the court has no jurisidction because a taxpayer has no obligation to respond to the IRS summons. What? If that's true, does this then mean that all the IRS summonses issued to taxpayers around the country for the last century have been without authority?

This is as much as I'm able to say about it for now. I haven't read the whole thing or listened to the audio of the IRS hearing myself. There's an audio link at the WTP website.



[edit on 1/19/2005 by dubiousone]