IRS sends out two agents to collect $0.04 in back-taxes from car-wash

Two grim IRS agents travelled to Harv's Metro Car Wash in Sacramento to hand him a demand-letter for his taxes owing in arrears: $0.04 worth.

Update: To be clear: it was $0.04 in unpaid tax that had accrued over $200 in penalties.

Arriving at Harv's Metro Car Wash in midtown Wednesday afternoon were two dark-suited IRS agents demanding payment of delinquent taxes. "They were deadly serious, very aggressive, very condescending," says Harv's owner, Aaron Zeff.... "It's hilarious," he says, "that two people hopped in a car and came down here for just 4 cents. I think (the IRS) may have a problem with priorities."

Bob Shallit: IRS visits Sacramento carwash in pursuit of 4 cents

Previously:

(Thanks, Fipi Lele!)

(Image: wealth of pennies, a Creative Commons Attribution photo from r-z's photostream)

I write books. My latest is a YA science fiction novel called Homeland (it's the sequel to Little Brother). More books: Rapture of the Nerds (a novel, with Charlie Stross); With a Little Help (short stories); and The Great Big Beautiful Tomorrow (novella and nonfic). I speak all over the place and I tweet and tumble, too.

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greengestalt

And yet they are unable to figure out if John Doe is a computer engineer in Seattle, a maid in NYC, a farm worker in Florida and a carpenter’s assistant in California…all at the SAME time… (I’m talking SSN identity theft) Not that they don’t then give John Doe the Gestapo treatment, rather than the employers of his other three aliases…
jowlsey

I hope he found the change for them by hunting between the cushions in the couch.
Hools Verne

And yet the Federal Reserve still cannot be audited.
- cameronh1403
  
  But the Federal Reserve is too complex and to big to fail so we can’t touch it…but those people holding that 4 cents..send in the Marines!!
Anonymous

I would have written them a check, lol!
Ugly Canuck

Hmmmm…should I throw in my two cents’ worth?

Nah.
randomcat

Shenanigans. IRS filing instructions require rounding all figures to the nearest dollar. Nobody gets a 4 cent tax bill. This story reeks of Tea Party propaganda.
- bobrk
  
  I agree with randomcat. This is BS.
- Anonymous
  
  I’m a progressive liberal and one of th 50% of Americans that pay no income tax at all. Being that I live off the government I need these 4 cents and penalties from this rich evil corporation. Thank You IRS.
Anonymous

Some missing details:

The letter that was hand-delivered to Zeff’s on-site manager showed the amount of money owed to the feds was … 4 cents.

Inexplicably, penalties and taxes accruing on the debt â€“ stemming from the 2006 tax year â€“ were listed as $202.31, leaving Harv’s with an obligation of $202.35.

Now he’s trying to figure out how penalties and interest could climb so high on such a small debt. He says he’s never been told he owes any taxes or that he’s ever incurred any late-payment penalties in the four years he’s owned Harv’s.

In fact, he provided us with an Oct. 22, 2009, letter from the IRS that states Harv’s “has filed all required returns and addressed any balances due.”

IRS spokesman Jesse Weller isn’t commenting “due to privacy and disclosure laws.”

This is not a regular news story.

It’s part of a column, so who knows what’s really going on.
Ceronomus

Instructions don’t REQUIRE rounding, they allow for it. That said, if two Revenue Agents showed up at the business? Then this isn’t the first notification and the IRS is getting ready to shut the business down for delinquent taxes (in this case $202.35 (after penalties and interest).

Still, I’m trying to figure out what penalties these are since this is a SMALL number. My guess would be he was 2 months late filing a corporate return ($200 penalty), plus interest…but that’s just a guess.

But really, Revenue Agents don’t show up unless every alternative has been tried first. The reason is REALLY simple. The IRS is undermanned and underfunded. It wasn’t all that long ago they experimented with outsourcing collections just to free up some man power.

As for the attitude, sadly, that is pretty common with the IRS. Their general attitude is that if you owe taxes you have stolen from the government. The housecleaning at the IRS about a decade ago has done very little to change this problematic attitude.
- randomcat
  
  Well, all right, they don’t REQUIRE rounding, but if you don’t round during your calculations, and your total bill is less than a dollar, they don’t require you to pay it. Is that sufficiently precise? Either way, this story is full of SHENANIGANS.
  
  See here under “how to pay”:
  http://www.irs.gov/publication/p17/ch01.html#en_US_publink1000170626
  “You do not have to pay if the amount you owe is less than $1.”
  - Ceronomus
    
    Accept that, in this case, he WAS making payments, just not enough and that makes ALL the difference in the world.
    
    The reason that the IRS is so anal about Payroll taxes? Because it is YOUR money. My wife worked at a place where one of the partners wasn’t making the tax deposits, instead pocketing the money himself.
    
    The IRS, upon being shown pay stubs that showed my wife had money withheld for taxes (despite it not being paid in) HONORED her refund request.
    
    The guy embezzling is serving something like 20 years in the Federal Pen.
Ceronomus

Oh, for the record, I’ve had a Revenue Agent show up on the doorstep of one of my clients (prior to their being my client) for a tax bill of $250.

All attempts at contact had failed and the next step after that was to file criminal proceedings for willful failure to file.
semiotix

I’m… uh… skeptical.

First of all, as the article notes (but none of the re-blogged headlines do), they were sent to collect $202.35, not $0.04. And that’s taking the owner at his word when he says that it was 4 cents, plus penalties and interest. In any event, there’s no reason to think the “agents” knew or cared about the line-by-line breakdown.

And $200+ in penalties, by the way, is not necessarily so farfetched. $0.04 might well have been what was left over on the balance of the “principal” from a much larger tax bill onto which $202.31 of penalties and interest had been attached. Would it have been as newspaper-friendly a story if they’d shown up demanding $202.31 in penalties and interest on a fully paid tax bill? No, and this car-wash guy would just look like a mildly delinquent taxpayer.

As people seemed to realize a few weeks ago, when a guy whose business hadn’t even finished failing yet committed suicide-murder by flying a plane into an IRS building, the IRS is rarely if ever what puts your business under. The representatives of the taxpayers of the US will bend over backwards to take pennies on the dollar of taxes owed if it means your car wash will stay open, even if you flat-out evade for years at a time. What kills your business is when you don’t have enough money to buy soap and water. But the IRS makes for a better scapegoat, especially if you can spin a story about “condescending” agents in “dark suits.”
- ifthenwhy
  
  Im with you.
  
  This story seems way to convenient.
  
  And what’s with all this “men in black” paranoia anyway? I had a 30 min conversation with a co-worker assuring her that filling out the Census form would not immediately file her name on the Illuminati/Elders Of Zion hit list.
  
  Sure, a healthy mistrust of the government is essential in a free society, and Paranoia is kinda, well, fun?
  
  But a little common sense, once in a while, can’t hurt can it?
  
  (Gob voice) Come Onnnn!
Ceronomus

Well, the attitude of many IRS agents is horrific. There are some really great folks out there (I’ve dealt with them) but others? Not so much.

Still, considering that Revenue Agents have been attacked and even killed when serving notices, and considering that someone recently flew a plane into an IRS building, I can see why they would send two agents.
semiotix

Actually, and this never happens, it seems my guess above is pretty much what happened. $200+ in penalties and interest on a late quarterly bill that the car-wash owner admits to, but (mirabile dictu!) the news of the penalties never got to him, because, hmm, it’s a mystery, perhaps it’s the third-party payroll company’s fault. Okay then.

Here’s the followup story from the same paper.
Ceronomus

Yup, if this was for PAYROLL tax? their visit was hardly inappropriate. The next step is to close the business. The IRS takes payroll taxes VERY seriously.
grimc

There’s also this possibility:

AGENT 1: Lunch?
AGENT 2: Sure, where?
AGENT 1: How ’bout the Thai place?
AGENT 2: OK, lemme just deal with this letter. Car wash owes 4 cents. Funny, it’s right by the Thai place.
AGENT 1: Hey, let’s have some fun. Print the letter out and we’ll deliver it in person.
AGENT 2: Hee! I’ll print it out and meet you at the elevator.

SCENE.
Anonymous

When doing accounting at one office I sent a company a collection notification for $0.50, The company rep called and tried to admonish me for sending her a bill for pocket change and I was happy to explain to her that her company had illegally shorted us tax on every sale we had ever made to them and I was done making reminder calls. I also mentioned that next time I would turn them in for repeated refusal to pay their sales tax. That was the last time they “forgot” to pay the tax portion although it was both itemized and added into the total on each of their bills.
doozerd

I’m not buying this story. My mom got a nice little letter from the IRS stating that she owed $0.42 on her payroll taxes – no Suits showed up. In fact, she got a second notice since her outsourced payroll department didn’t forward her notice to her in time!

It’s also funny how the CA BBB doesn’t list zeff as the owner of harv’s carwash and the parcel of land is owned by 1901 Car Wash LLc.

I want to see proof – and haven’t seen any yet.

looks like someone is trying to get publicity, or it’s the start of another “grassroots” movement
Ceronomus

Not really a possibility Grimc, but if it makes you happy to think so, go right ahead.
dculberson

Yeah, being late with a quarterly withholding filing is serious bad news. And ignoring notices about it is also really serious. I do my own payroll at least partially because I don’t trust any service that has low enough rates for me to justify using them. In 10 years or so, I’ve never had a single late filing or problem with the IRS beyond them getting confused when the withholding amount changed mid-quarter. They’re really not hard to work with .. I presume that might change if you pissed someone at the IRS off.
Teller

A lot of different commenters here and I just want it known: I like the IRS! Good, hardworking people! It’s tough finding tax evaders! God’s work! Bless you!
_OM_

“But he tells us he’s glad the issue was resolved â€“ and he finds himself uncomfortable with the online anti-government firestorm his case generated.

He reports that he’s been “inundated” with interview requests from national media organizations but hasn’t returned their calls.”

…You can bet your sweet ass “inundated” means he got a call from the local IRS director telling him in no uncertain terms that if he didn’t retract his claims he’d be hit with an audit and they’d stick him for late payments on everything even if he paid his bills on time. The IRS purging that happened when Congress jumped their ass over raids like this only succeeded in purging the people at the IRS who were still at least partially human. All that’s left are the type of bloodsucking scumbags that push people over the edge. They’re just lucky more people haven’t crashed airplanes into other IRS offices.

If there is a hell, it waits for everyone who works for the IRS.
davide405

I can’t judge the veracity of the story about the $0.04 collection attempt, but I do have reliable (albeit) second hand knowledge of more sinister behavior by the IRS.

In my youth, the parents of a close personal friend were my landlords for a time. I frequently ate meals with them, and they permitted me to use their laundry facilities. In many ways, they were surrogate parents.

They filed quarterly, and had a full-time accountant to keep things all square and legal. Their instructions to the accountant were to manage things so that they were never very far from even. They didn’t want large underpayments or overpayments.

They were understandably surprised when a check from the Department of the Treasury arrived in their home mailbox for an amount of nearly $10,000 as a tax refund. I saw the check with my own eyes.

They immediately contacted their accountant who was as surprised as they were. Their accountant warned them NOT to deposit the check and began to investigate the situation.

Many letters were exchanged over the next several weeks. In each one, the IRS responded with an assurance that the money was correctly owed as a tax refund. As the time frame pushed into the 60 day range, they were advised to deposit the check promptly as it would be void after 90 days.

Then, without warning or explanation, the instructions and tone changed sharply. The final communication from the IRS was something like: “UNDER PENALTY OF LAW, REMIT NOW. FAILURE TO RESPOND WITHIN TEN BUSINESS DAYS WILL SUBJECT YOU TO CIVIL AND CRIMINAL PENALTIES.”

They sent the damned thing back by registered mail and never heard another word about it.

I did see the check with my own eyes, and have no reason to doubt their side of the story surrounding it.
- dculberson
  
  There was probably nothing sinister about that.. I received an unexpected refund check from the IRS once, and that was because I had selected the wrong period when making a tax deposit. (Being on a fiscal year, despite it covering a period in 2008, I was apparently supposed to choose 2009.) Well, then sent me a check and then later a notice of taxes due. The wording you’ve paraphrased is pretty standard stuff, just making sure you know it’s serious and not a notice that can be ignored. Otherwise they would end up with a lot more people ignoring their notices. I do admit it can be jarring to read, though!
  - davide405
    
    {snip}I received an unexpected refund check from the IRS once, and that was because I had selected the wrong period when making a tax deposit.{snip}
    
    The difference between your anecdote and mine is that (to the best of my knowledge) my landlords’ accountant had dotted every i and crossed every t. The mistake was entirely the fault of the IRS.
    
    Maybe you had to be there. At the time it had the distinct flavor of an attempt at entrapment.
cservant

Story’s not really clear. But thanks to semiotix’s follow up it’s pretty clear it’s not $0.04 in back taxes.

Quote from follow up:
“Penalties and interest then were assessed. When the late payment was received, it wiped out all but 4 cents of the payroll obligation, but left the interest and penalties in place.”

So it’s very clear that “Update: To be clear: it was $0.04 in unpaid tax that had accrued over $200 in penalties.” is incorrect.

The car wash company basically didn’t file their taxes on time. So they got hit with penalties. They did pay their taxes, but file them late. Do company tax get something like Notice of Assessment? I find it strange they manage to do their later taxes without knowing previous history. If the late filing was in 2006, how could they miss a few years of notices? I’m betting they ignored the penalty and let the interest add up.

Neverless, this story is just bad journalism. You get incomplete picture of what’s really happening.
jeligula

Reading all the other comments, I will leave off on commenting on the accuracy of this. However, what I can say is that I have seen fellow Marines get busted and have their Advice of Deposit say NPD (No Pay Due) because part of the punishment was surrender of salary for two months or so. When the NPD was satisfied and his pay picked up again, only 1 cent was due him, so the government cut a paycheck for 1 cent. I have seen the check, because that Marine framed it and hung it on his wall. Do not underestimate the government’s ability to quibble over penny ante accounting. I was an accountant in the Corps at the time, so this check did not surprise me in the least.
jeligula

Oh yeah. I gotta tell ya that the stock photo of pennies is just as yellow as Yahoo! posting a file photo of a celebrity looking disgusted that was taken five months prior to the scandal they are “reporting” on, as if the celebrity is reacting to the news.
54N71460

Oh yeah. And there are at least 7 pennies on that picture.
- jeligula
  
  And something that looks like it might be a nickel. Maybe it’s just a penny that thinks it’s MJ.
sic transit gloria C.F.A.

“This page requires you to be logged into sacbee.com.” Well gee, sacbee, I’m not interested enough in any of your stories to jump through your pointless little hoop. Too bad, so sad. Get a fucking clue, you and NYT and half the other papers out there.