5 Bizarre Things You Only Learn About The US As An IRS Agent

"One case I found a lot of unreported income, which is a big 'drug dealer' warning sign. They were Colombian, traveled back to Colombia constantly. She did 'window treatment' and apparently traveled to Colombia to get fabric? Yeah, that's not the least bit suspicious.

Plush Studios/Blend Images/Getty Images
"The drapes are for my glaucoma!"

"The initial tax due for this couple was $74,000, and I told them I expected we'd do an installment agreement. ... Most people don't take a hit like that easily, but these people didn't give two shits about it. Their accountant was like, 'We'll just pay it in full.' I tried to prove it was fraud, but their accountant had immediately fessed up to the errors they made: 'Oh, we missed reporting this and this deposit.' And because he was forthcoming about those deposits, we didn't have much cause to charge him with."

In other words, as long as you accurately report what you made, they don't particularly care how you made it. So if you are a drug dealer, the IRS has no issues taking your dough and ignoring all the felonies. In fact, they actually have a box for that -- Form 1040, line 21, to be specific. That's where you report the money you earn from dealing drugs, gambling, hosting bum fights, etc. The IRS doesn't care what illegal enterprise you operated, as long as you declare your income so Uncle Sam can get his cut.

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And paying him in product is not an acceptable substitute.

Illegal immigrant? That's just fine with the IRS, as long as you're willing to pay your share of the border patrol's budget. And as crazy as it sounds, the IRS estimated that 75 percent of illegal immigrants pay their fair share. That's how scary the IRS is -- people will freely admit to them that they're breaking the law just to avoid pissing them off.

However, because the IRS is a massive government organization with direct influence over the lives of every American citizen, petty rivalries and office politics can wind up screwing over random innocent people. Roxanne recalled one such occasion, when she was investigating a single father of two kids on the verge of bankruptcy:

"I was investigating his return, because it looked a little fishy and someone had flagged it. But things weren't that off ... so I continued the audit and got the remaining documents and then closed it out."

Roxanne told the guy he didn't owe any money, and she thought the case was over with. But then ...

"On Monday we got into work and my manager said, 'I've been thinking about this all weekend, and I think there's something there.' And she told me to open it up again. ... I had to tell [the taxpayer] I was coming out to investigate again."

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"So you remember how I said you were all set? Well, you'll laugh when you hear this, buuuuuut ..."

Because her boss had a piece of logging town driftwood wedged up her fartcave, Roxanne had to go back out with another agent to investigate the man's return, despite the fact that there was only about a $1,000 discrepancy between his income and expenses. According to Roxanne, this is almost unheard of: "But my manager at the time hated me, and she knew eating up all this time and aging out a case like this would make me look bad. It was an internal personal struggle between two IRS agents, and it bled into this random dude's real life."

That's kind of terrifying, right?

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Unless you were like us and always just kind of assumed the government operates
with the maturity of squabbling siblings.

Roxanne also says you can actually have a big impact on how well your audit goes if you're just polite to the agent working your case. They're not trying to be malicious -- they're just doing their jobs. But if you start shouting or making threats or just behaving like a general dickweed, they will go out of their way to make the process as big a pain in the ass as humanly possible. This can include looking as hard as they can for "adjustments" to the amount of money you owe and calling at all hours of the night instead of working out a reasonable time with your daily schedule.

It doesn't really seem fair, but the main takeaway here is that being polite and cooperative is a good rule of thumb for dealing with an agency that literally has the power to completely destroy you. But on the other side of that equation ...

People hate the IRS, because as much as we love all the things that our taxes pay for (functioning highways, clean water, not getting conquered by England, etc.), we hate having the cash equivalent of several new televisions deducted from our paychecks every year. As the least popular government institution, the IRS has to invest in some pretty robust security.

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... for now.

"My office is pretty normal, if you ignore the banks of cameras covering every approach," says Tom, another one of our sources. "And the armed guards who pop out of hiding if you so much as look at the place the wrong way. And the mobile strip-search machine, if you can't answer their questions satisfactorily. But yeah, it's an office building! Just ignore all the signs on the outside of the cubes about what you can be arrested for, that you're to tackle and restrain anyone not wearing a badge, and the armed guards patrolling and looking over your shoulder constantly."

Every legitimate scandal and scandal-that-isn't-really-a-scandal adds fuel to the anti-IRS conspiracy theories, which leads to death threats and the occasional straight-up terror attacks. So the IRS keeps a list of "potentially dangerous taxpayers" that could flip out on the tax man at any given moment. "We've had real officers make the determination, 'This person wants IRS agents dead for a variety of reasons, both clear and unclear,'" Tom says.

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The dead part is the real takeaway from this.

Obviously, most of these threats are just the rantings of harmless kooks and never amount to anything. But every now and then something happens that forces them to take every threat seriously. For example, back in 2010 an angry man fresh off an audit flew his private plane into the Austin offices of the IRS (where Tom worked), killing someone who had nothing to do with his case and destroying the building in the process:

Alberto Martinez/Austin-American Statesman/AP
Meanwhile, some other asshole makes a shitty YouTube about how
"jet fuel doesn't burn hot enough to melt tax forms!" and the crazy train continues.

Tom's office experiences aren't universal, though. Roxanne works at an IRS office in a different state, and she described her building security measures as basically nonexistent. That isn't to say that she hasn't run afoul of some spectacularly sketchy taxpayers. At one point she was actually auditing a guy who'd been hired to handle some remodeling in her office -- he was literally looking over her shoulder the entire time:

"So all during the audit, as he was learning there were mistakes on his return that would cost him about $12,000, he would unexpectedly pop up behind me at my cube and make snide remarks about how I am taking food out of his children's mouths and will cause his wife to divorce him. When I voiced my discomfort to my manager, she said that unless he made a direct threat, there was nothing she could do. ... He was trying to write off two 'guard' dogs, 24-hour video and audio security cameras, and a freaking gun and gun license as 'security expenses' ... "

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"And the pink, fuzzy handcuffs?"
"Security expense."

But considering what some taxpayers put up with, that guy got off easy ...

We assume that this legally makes you a ghost, and as such are not beholden to any of humanity's laws, so just treat every day like The Purge until the IRS corrects its mistake. But just as big a problem as living people being officially declared dead by the government is actual dead people suddenly spending money and opening lines of credit, as Tom explains:

"People who pass away are a prime target for identity thieves, which is where my office comes in. If they can get the social [security number] before we pull everything, they can get away with a lot of mischief. We had one recent case where a dead 70-year-old started paying taxes and filing for a lucrative American Opportunity Tax Credit, which means this dead person was freshly enrolled in college."

"Semester At Bernie's, the thrillogy continues."

Which leads us to ...

Even though you might have never heard of it (we hadn't), identity theft via fake tax return is kind of a gigantic freaking problem. According to Tom:

"Typically, scammers just need to get someone's social security number, name, and address -- with that, you can usually put together someone's other vital stats: mother's maiden name, existing family, etc. They fill out fake tax info, filled with refundable credits: earned income, additional child, etc. Typically, they stand to gain around $4,000 for a bad return. The scale this is happening on is just unbelievably vast."

Digital Vision./Photodisc/Getty Images
"The six new dependents you claimed this year wouldn't be so suspicious
if you were, say, a rabbit or a cat."

He's not kidding: In 2012, the IRS refunded an estimated $5 billion to identity thieves. And they expect to give away another $21 billion over the next five years. And all that fraud means a shitload of phone calls for Tom and his co-workers. Tom works in the Taxpayer Protection Program, which exists specifically to thwart identity theft:

"I think we're the only government program that actually does what it says on the box! Short version: We use a ton of computer filters on incoming returns to identify possible identity theft returns. We flag them, stop them, and then, because computers don't get everything right, we go straight Batman on their asses."

Warner Bros.
Yes, Batarangs are deductible as business expenses.

We assume he means "detective" Batman, not "throwing criminals off of cathedrals" Batman. Still, you couldn't blame him too much:

"Single mother of three with a deadbeat ex? Eighty-year-old grandmother? I've talked to all of these, as victims of this crime. I've had people threaten suicide because they think we're going to come after them. ... It's not a victimless crime, this faceless, electronic theft. And the assholes who commit it? Their 'best outcome' is they make off with a big, fat check, while Uncle Sam tries to accuse grandma of being a tax cheat."

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"Well, granny, maybe you should get off your ass and start a webcam show
instead of whining about your 'fixed income' all day."

Tom's whole career is to act as a shield against these sociopathic shit-goblins:

"The other week I helped out a woman who'd just been served a notice of foreclosure on her home thanks to $220,000 in debts someone else made in her name. Obviously, she's freaking out when she calls me. But I'm able to verify her story pretty quickly, and the criminal investigation side of things swung into gear. The crook's [electronically filed tax return] was tracked down to a public library, and the FBI's cyber-crime guys managed to get the security camera footage."

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"No, that guy's just watching porn. He's watching porn. Porn. Porn. Wait!
I think that's ... No, sorry, porn."

The crook was on camera, and as it turns out, he was a person that the victim knew. She got to keep her house after that. May your next interaction with the IRS be just as positive as hers was.

Robert Evans really hopes this article doesn't make the IRS angry. He also has a Twitter.

For more insider perspectives, check out 5 Insane Things I Learned About Drugs As An Undercover Agent and 6 Insane Details Of Corrupt Politics That Movies Get Wrong.

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