Scott Michel Quoted by Tax Notes on Impact of IRS Scandal

Scott D. Michel spoke with Tax Notes to discuss how the IRS scandal may affect taxpayer and agent relationships.  To read the full article, please visit the Tax Notes website.

Excerpt taken from the article "IRS Scandal Will Affect Taxpayer and Agent Relationships, Practitioners Say" by Jaime Arora for Tax Notes.

While the political drama is centered in Washington, practitioners in Las Vegas agreed May 16 that fallout from the IRS's exempt organizations scandal will affect relationships between taxpayers and agents throughout the country.

Though the situation may not affect the day-to-day relationships between taxpayers and a particular IRS officer, it is likely to harm the general morale of IRS employees, Scott D. Michel of Caplin & Drysdale said. Seeing their superiors being marched up to Capitol Hill has a personal impact on them, he said.

Michel said he expects slower IRS implementation of rules across the board for at least the next two years. Oversight is going to play a larger role, Michel said, adding that interpretations, judgments, and rulings at the national level are likely to take more time as officials consider how their decisions will appear to others. People will look at a given decision and think about what will happen if it hits the front page of The Washington Post or comes to the attention of an oversight committee in Congress, he said.

However, a perception that the IRS is unfair or distracted may lead some taxpayers to try and get away with something, and practitioners should consider adjusting their due diligence accordingly, Michel said. In the near term, tax practitioners need to exercise additional skepticism because some people may think they can "play games," he said.