The Internal Revenue Service is a massive "Three Letter Agency." It's a bureau of the Department of the Treasury and (believe it or not) one of the world's most efficient tax administrators. In fiscal year 2020, the IRS collected almost $3.5 trillion in revenue and processed more than 240 million tax returns. It has over 90,000 employees.
It is also about as popular as Communism and Dog Catchers with most people! This makes running this most public of organizations a challenge for garnering resources and maintaining safety, stability and confidence in the revenue collection that makes this country go.
https://youtu.be/mXxwh0IR3Ig
Charles “Chuck” Rettig is a Shareholder at Chamberlain Hrdlicka in the Firm's Tax Controversy & Litigation practice and served as Commissioner of the Internal Revenue Service (IRS) from 2018 through 2022. He shares his experience with us and some pointers in dealing with the Service.
How the IRS operates and its priorities:
The volume of work and responsibility of the Internal Revenue Service
The structure of the agency
Data Science is the Future
What it does that people may not be aware of
Other parts of the Treasury opine on tax policy, but the agency provides guidance on workability
Chuck as the Commissioner appeared before Congressional Committees 37 times in 4 years.
Personality matters both internally and externally
The Commissioner has an 11 person security detail and receives 3 credible death threats / week.
What to expect in the next years:
Legislative Uncertainty
Administrative Challenges
The Service has almost 400 Million "clients" with huge disparities in sophistication
Resources are always a struggle- getting bang for the buck
Personnel departures from the Service
Prediction: Increased aggressiveness at the state level
What best practices in front of the IRS look like.
Setting up your affairs with a ling term strategy in mind
Interacting with an Examiner
Speed and Humanity
The 3 headed approach to family office planning
High end advisory work with the T&E group
The overall context in working with the structure and culture of the IRS - having a backdoor channel
Litigation support for those situations that need it.
Links
With Kelley Miller: The IRS Audits You- What's Next?"
Transcript of the Show
https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/
Frazer Rice (00:01)The IRS and taxation in general is in all sorts of tumult with the new administration. How to deal with the IRS, how to file your taxes, how to plan for things going forward. It's something to think about. We have Chuck Redig on and he is a terrific resource for all of our listeners. He's a shareholder at Chamberlain Herdlica. It is in the firm's tax controversy and litigation department.
Frazer Rice (00:26)Most importantly, he served as commissioner of the IRS from 2018 through 2022. So we have a little inside baseball here on how the commission works and things to think about in your own practice. So Chuck, welcome aboard.
Chuck Rettig (00:32)
Thank you for having me. It's a privilege to be out.
Frazer Rice (00:42)Well, it's a treat for us to have you and a real great opportunity. First and foremost, look, the three letters IRS are scary to just about anybody who comes in contact with them on a personal basis. Maybe break down a little bit how the IRS operates and what its priorities are.
Background
Chuck Rettig (01:01)Yeah, you know, when I went on board, somebody high up in Treasury, and I'm basically a kid from Los Angeles and Irish headquarters in Washington, D.C., and somebody from Treasury said to me, you know, congratulations, it's a Senate-confirmed position, and you are one of the five most powerful people in the United States, but you are absolutely the most hated. And I remember shaking his hand going, okay, thank you, you know,