Sue Lani Madsen: Death and taxes and the efficient IRS

While the only things certain in life may be death and taxes, it is also certain you can’t get blood out of a turnip or money out of a man who died with no assets.

Skepticism in the ability of the federal government to run efficiently is a conservative touchstone. There are good, quality civil servants working for the federal government, but they are trapped in the systemic incompetency that is the hallmark of bureaucracy everywhere. Like, for example, in the Internal Revenue Service.

President Joe Biden and House Speaker Nancy Pelosi have been selling the Build Back Better boondoggle as budget neutral. Experts are already projecting the Congressional Budget Office score will be disappointing. All the new “temporary” programs will not be free. And especially not since it counts on the IRS cracking down on taxpayers to help pay for it.

They won’t be collecting from my brother-in-law. Kevin died in November 2019 after many years of struggling with mental illness that finally left him homeless. His only income was disability payments after a medical separation from federal civil service. It is two years later and the IRS still hasn’t figured out he’s not paying.

We put a mail forwarding order on Kevin’s last address of record so we could tie up loose ends. That mostly meant sending copies of death certificates to creditors, including tax collectors. The U.S. Postal Service must have informed the IRS of the new address, and the IRS sent Kevin a letter in January 2020. We returned the envelope with a death certificate and explanation. They sent a letter acknowledging they had received “his” correspondence and would get back to us in 90 days. In May 2020, the IRS sent him a letter requesting payment in full including penalties and interest. Kevin easily ignored it. So did we.

At the end of June another letter arrived by certified mail threatening Kevin with seizure of all assets, notifying him of his right to a due process hearing and requesting confirmation of address and contact information. Trying to be helpful, I returned the form with another copy of the death certificate and a note saying his address was the urn from the funeral home sitting on his brother’s dresser.

It was a handwritten and honest statement with a touch of dark humor to catch the eye of any human agent paying even a modicum of attention to the job. Somebody did notice. Sort of.

They left out the part about the urn, but did update the address. The next letter was addressed to Kevin care of his brother albeit with no mention of the urn or the dresser. After thanking Kevin for his correspondence, the letter stated:

“Case Closed – Currently Not Collectible.”

This looked like progress until reading the next paragraph:

“We temporarily closed your collection case for the tax periods above because we determined that you can’t pay the money you owe at this time.”

Temporarily? At this time? There is nothing temporary about dying. It’s a pretty permanent condition. The letter went on:

“However, you still owe $1,756.86 to the IRS for the tax periods above. This amount includes applicable penalties and interest calculated to August 21, 2021. You’ll receive annual reminder notices and we’ll continue to charge applicable penalties and interest until you pay the amount you owe in full.”

Apparently the IRS is planning to Lazarus-like resurrect Kevin, cure his disability and find him a job so he can pay his back taxes. Meanwhile we have been warned to expect a letter to Kevin in care of his brother every year reminding us that Kevin is still dead, and still a victim of the systemic incompetence of bureaucracies.

The experience has not enhanced my confidence in the IRS to efficiently pursue tax deadbeats.

Everyone has had at least one experience with a particularly unhelpful government agency. This column is not to bash government employees, or at least not all of them. In the private sector, incompetence is rewarded with dismissal. In the public sector, incompetence is too often laterally transferred to somebody else’s department or internally isolated. Either way the competent are left picking up the workload.

The Idaho State Tax Commission managed to close their tax lien after receiving a single email with an electronic copy of the death certificate. Congratulations to the competent staff of the Idaho state agency , whoever you are. The IRS could learn a thing or two from you.

Contact Sue Lani Madsen at rulingpen@gmail.com.