Revenooer Rants: Some IRS hire not choir boy candidates | SierraSun.com

Revenooer Rants: Some IRS hire not choir boy candidates

Jeff Quinn
Special to the Bonanza

So saith the Treasury Inspector General for Tax Administration (TIGTA) anyway.

Seems TIGTA recently found in one of its audits that between 2010 and 2013, hundreds of former employees were rehired, for whom IRS records show performance and conduct issues associated with their previous IRS employment.

TIGTA says that while most rehired employees did not have performance or conduct issues associated with their previous IRS employment, many did.

F'rinstance, 141 rehired former employees had a prior tax issue, including willful failure to file returns. Further, 108 rehires had prior substantiated employment conduct issues, including:

• Unauthorized access of taxpayer accounts

• Fraud

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• Falsification of employment forms, and official or unofficial documents

• E-mail, internet, property misuse

• Misconduct (including sexual harassment, unprofessional conduct and criminal misconduct)

• Absence and leave, workplace disruption or failure to follow instructions

Further, of the 323 former employees hired between January 1, 2010, and July 27, 2013, with substantiated or unresolved prior conduct or performance issues, TIGTA determined that nearly 20% had new conduct or performance issues, such as tax noncompliance, attempted unauthorized access to tax account information, and leave abuse, while others had new legal or off-duty issues, such as bankruptcy.

We guess there must be a shortage of candidates for IRS employment.

And from our curious court decision department came word, recently, from a Louisiana district court. The usual IRS rule on allowing a business to claim depreciation and other property related tax benefits is that the property has to be "placed in service" on or before the last day of the tax year.

So here comes Stine, LLC which built two new retail stores in 2008, both of which had received certificates of occupancy which allowed them to receive equipment, shelving, racks and merchandise as well as the appropriate personnel to install and or stock the equipment, shelving, racks and merchandise.

But on December 31, 2008, the stores were not actually open for business and the certificates of occupancy did not allow customers to enter the buildings.

Query: does the "placed in service" requirement equate to being "open for business?"

Obviously that's what IRS wanted to conclude (which they did) though the court disagreed, allowing the taxpayer to claim the related tax benefits.

The court concluded that IRS failed to cite any authority to show that "placed in service" equates to "open for business."

Counterintuitive, but we'll take it!

— CONSULT YOUR TAX ADVISER – This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation. Jeff Quinn is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He can be reached at 831-7288, welcomes comments at jquinn@ashleyquinncpas.com, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.