Annals of Government Incompetence
An amusing but in some ways ominous IRS anecdote.
The following message was posted yesterday on BenefitsLink, a chat room (if that’s the right term) for employee benefits professionals (lawyers, consultants, actuaries, accountants, etc.):
I am not necessarily looking for specific advice but I was wondering if anyone has had this or something similar occur.
Employer was assessed a penalty of $40K under the ACA's shared responsibility provisions (the details don't matter). At no time did the employer send the IRS any amounts with respect to this assessment.
Employer worked with counsel (me) to abate the penalty, which the IRS agreed to do.
A few months later, the IRS sent Employer a check for $40K plus interest. Employer wrote back and said that the check was sent in error and requested IRS guidance on how to handle it.
No response from the IRS.
A few months later, the IRS sent another check in the same amount to the Employer. The employer responded similarly to what it did before.
A few months later, the IRS sent yet another check in the same amount. Employer called the IRS and the representative told the Employer to send the checks back. Employer did so, along with a brief explanation.
All was good until this past November, when the IRS sent a note saying that it was still working on the matter and would respond in 60 days. Last week the IRS sent another check, this time in the amount of $50K or so, reflecting additional interest.
That is all.
It sounds unbelievable, and I would be inclined to treat it as some kind of joke, except that the poster is one of the group’s moderators and appears to be a sane, serious and rational individual.
I will omit the obvious comments and add only one (also obvious) of my own: If the IRS can commit such a grotesque error in favor of a taxpayer, how many does it commit in the opposite direction?