Wednesday, April 29, 2009


+ Here is a first! I have never heard of this happening before in 37 years of preparing 1040s.

Look what happened to a client -
“{My son’s} return was properly addressed to the IRS. I mailed it myself. The US Postal Service had delivered {the} tax return to a company in Kansas City MO instead of delivering it to the IRS address. That company had opened the letter up, must have looked at the information inside, and it was returned back to {my son} with a small explanation attached. What I can't figure out is why they just didn't give it back the Post Office and it would of been on it's way. So, know we are worried about someone having all of David's information and are concerned.
I provide my clients with pre-addressed envelopes to use in mailing their tax returns. The address on the envelope is from a self-created page of labels. So the Post Office certainly could read the correct address. And those who know me will tell you that even if I hand wrote the address it would be easily readable. A properly addressed envelope, confirmed by the client, was provided in the above instance.
So there is really no excuse for the tax return not being delivered to the proper Internal Revenue Service address in Kansas City, MO.
As I said, this is the first time I have encountered such a FU by the Post Office. In the past I have always praised their service and announced that I have never lost a tax return in the mail. The closest incident was several years ago when a package from Rhode Island never arrived at my office. The client was able to track it down within the PO and it eventually made its way to Jersey City intact.
I prefer Post Office overnight to FedEx or more expensive services. The Post Office delivered an overnight package to a client on Easter Sunday once, while FedEx could not always guarantee overnight delivery to out of the way locations within the US.
I do share my client’s curiosity about why the letter was opened in the first place by the company who received it in error. It was clearly addressed to the Internal Revenue Service and not them, so it should have been promptly returned to the Post Office unopened. Is opening something addressed to the IRS breaking a federal law?
There was no refund requested on the return in question (and therefore no direct deposit information), and there was no payment enclosed with the return – it was a “0” liability + “0” withholding return filed only to report excessive stock losses to be carried over. The return did not include any real financial information other than the son’s Social Security number. And the company did return the return to the son, so they at least have the appearance of honesty.
This situation seems to support “e-filing” of a return, although there are also confidentiality concerns connected with the electronic filing system.
Has this ever happened to anyone out there before?
+ I have been catching up on my @rdftaxpro messages at Twitter and found a note from Kay Bell of DON’T MESS WITH TAXES that she, Kelly Phillips Erb (aka TAXGIRL) and I are included in a blog list from fellow tax blogger Jim Maule – “MauledAgain's 10 Favorite Tax Blogs”. Also on the list is Joe Kristan’s ROTH AND COMPANY TAX UPDATES and Russ Fox’s TAXABLE TALK.

+ As long as I am shamelessly “tooting my own horn” (a la TAX MAMA) I might as well also point out that THE WANDERING TAX PRO made the list of the “100 Best Financial Planning Blogs” compiled by L. Fabry at the ONLINE MBA REVIEW’s blog. Online MBA Guide ranks the best online MBA degrees and reviews top online MBA programs in the USA.

THE WANDERING TAX PRO is #89 on the list under the last category of “Specialty Blogs”. It looks like I am the only tax blog on the list!

+ A very belated thanks to Pete Pappas of THE TAX LAWYER’S BLOG for selecting my post on “The EIC and Tax Fraud” for inclusion in his “Issue # 6: Dr. Taxosphere, Or How I Stopped Worrying and Learned to Love the Tax Code”.

Pete’s comments on the subject were right on –

My Observations: The EITC is a refundable credit. In other words, qualifying taxpayers get a check from the government regardless of whether they paid any taxes in during the year.

It is, therefore, a welfare program and, as was the case with America’s old welfare system (subsequently reformed in the 90’s through a joint effort of Congressional Republicans and President Clinton), its entitlement nature invites abuse.

Nobody should get money from the government (i.e. other taxpayers) merely by completing a form requesting the money.

Like the guy who leaves his keys in his Cadillac and the driver-side door wide open, a government that makes it this easy for people to steal from it deserves to have its money stolen

Pete also posted about “Five Nevers from Flach”. I do agree with him about butchers and surgeons.


1 comment:

mok said...

"I do share my client’s curiosity about why the letter was opened in the first place by the company who received it in error."

Many companies that handle significant volumes of routine mail have automatic letter openers that open all their mail.

Expecting a company to hire an employee to manually screen the addresses on all its mail before it is fed into the automatic opener, in case the PO screwed up and misdelivered a piece of mail, is an unreasonable burden to impose.

Some lockbox services are simultaneously processing large volumes of mail that are addressed to many different addresses, so checking the address on every envelope to verify that it is one of the addresses that they handle before feeding it into the machine could really be time-consuming.

As long as the company did not knowingly and intentionally open mail addressed to it, it seems to me that they will not and should not be prosecuted.

The fact that they took the time and trouble to return the mail to the sender, along with a note, is an indication to me of their good will and good intentions.

Since there was no tax due, the boy is not going to face any penalty for the late arrival of his return, and it seems to me that he's better off being notified that it DID fall into the wrong hands rather than if the company had simply handed it directly back to the PO.

(If they'd just resealed the envelope and forwarded it directly the IRS, the boy would never have known that his information had been compromised and that he might want to be especially vigilant about monitoring his credit record.)