Tax Law

Don't You Dare Download That Form!

In 1975, the late Senator William Proxmire established the Golden Fleece Award which is periodically awarded to public officials who, in the judgment of Taxpayers for Common Sense, waste the public’s money. I would like to nominate the Internal Revenue Service for the award, but I don’t think the purpose of the award is broad enough to do justice to the truly breathtaking display of mindless bureaucratism and outright silliness currently evident on the form downloading section of the IRS website.
My mother-in-law paid a private duty home care attendant for services rendered in 2008.   Good citizen that she is, she would like to report the income to the IRS on an IRS Form 1099-MISC. So yesterday, I visited the IRS website to download the form. What to my wondering eyes should appear than a red colored copy of the form, accompanied by the following message. I quote it in full:
Attention: This form is provided for informational purposes only. Copy A appears in red, similar to the official IRS form. Do not file copy A with the IRS. The official printed version of this IRS form is scannable, but the online version of it, printed from this website, is not. A penalty of $50 per information return may be imposed for filing forms that cannot be scanned. To order official IRS forms, call 1-800-TAX-FORM (1-800-829-3676) or Order Information Returns and Employer Returns Online, and we’ll mail you the scannable forms and other products. See IRS Publications 1141, 1167, 1179 and other IRS resources for information about printing these tax forms.
The IRS policy of posting a non-scannable version of the 1099 and other forms on its website (Form 1096 is similarly non-scannable), is so magnificently idiotic that I doubt I can count all the ways, but I will try:
First, we are all familiar with non-filing penalties. But a penalty for filing not the wrong form, but a non-scannable version of the correct form is ingeniously senseless. What is the message the public is supposed to take away from a filing penalty – when in doubt, don’t file? That’s a message you would think the IRS would not want to convey to taxpayers at a time when the Treasury can use every penny it can get. Also, they’ll mail the scannable forms?! Isn’t the whole purpose of the website to eliminate the need for the IRS to mail forms? And what is this stuff about Copy A being “similar” to the official IRS form? Isn’t this the official IRS website? Are taxpayers supposed to visit an unofficial IRS website to get the official form? Are we on the Bizarro world?

But more fundamentally, why in the world doesn’t the IRS simply post the scannable version of the form on its website? It isn’t that such a form does not exist – the same notice that warns taxpayers not to file the non-scannable version also informs them how they can order a scannable version. Scannable forms can be ordered by phone or – ya gotta love this – on the IRS website!! This reminds me of the Seinfeld routine about renting a car. The IRS can tell people how to order forms online, but the IRS cannot supply people with forms online.
I have worked for state taxing authorities for almost twenty years. I have had to explain to a taxpayer why the revenue department had to appeal an adverse judgment of $3,000 because the underlying legal issue was critical to the department. I know that government agencies are often driven by different policy and political realities than the private sector. Perhaps there is someone within the bowels of the IRS who can satisfactorily explain the rationale for this madness to me. But if there is such a person, please don’t send the explanation to me in non-scannable form; you will be fined.