# Tax Offices in London, Paris and Frankfurt are closing soon



## FFMralph (Dec 22, 2012)

Not only poor service but soon no service.

"The closing of IRS offices attached to U.S. Embassies in *London* and *Paris*, as well as the consulate in *Frankfurt*, will allow the agency to reassign about a dozen employees to its domestic offices and save about $4 million a year, the IRS said in a statement." 

Deteriorating IRS Service Causes Pain for Taxpayers, Report Says


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## BBCWatcher (Dec 28, 2012)

Forbes posts this article reporting on the Taxpayer Advocate's findings. Here's just one illustration of what folly it is to cut the IRS's budget: "The Commissioner of IRS recently announced that as a result of the 2015 budget, that cut IRS funding by over $300 million, the IRS would collect at least $2 billion less revenue this fiscal year."

Yes, that's right, "saving" $300 million will cost the U.S. federal government $2 billion, for a net cost to the U.S. Treasury of $1.7 billion.

Let's give credit for IRS budget cuts where credit is due: "this Congress" is today's Republican Party. The Republican Party wanted this cut (and other cuts) to the IRS budget as a matter of policy -- actually a bigger cut, but Democratic opponents blocked some of the cuts. This is not accidental, it's intentional. This is not the Republican Party I remember, sadly.


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## Bevdeforges (Nov 16, 2007)

I know that there have only been 5 people in the Paris IRS office for ages. But what struck me about the article was when they said that closing 3 offices (London, Paris and Frankfurt) would allow them to transfer "about a dozen" employees back to the US. The thin-ness of their overseas staffing has always convinced me of where there audit efforts are most likely concentrated.

Oh, and it also explains the recent changes to the Paris IRS office's website. Used to be a great source of information. Now they just seem to refer you to the various IRS website pages. 

It's actually too bad. The staff in the Paris office were genuinely nice and helpful people. 
Cheers,
Bev


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## FFMralph (Dec 22, 2012)

At least the regional offices were aware of regional specific conditions and could help you in determine how to apply existing IRS interpretation. 

For instance we pay a solidarity surcharge on our income tax used to rebuild the former east Germany. When I asked Philadelphia if this qualified for the FTC they only read to me what was written in the publication and answered "I don't think so". Frankfurt answered. "Sure thing. We recognize this surcharge as being part of Germany's income tax." 

Like Bev said "It's actually too bad."


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## maz57 (Apr 17, 2012)

BBCWatcher said:


> Let's give credit for IRS budget cuts where credit is due: "this Congress" is today's Republican Party. The Republican Party wanted this cut (and other cuts) to the IRS budget as a matter of policy -- actually a bigger cut, but Democratic opponents blocked some of the cuts. This is not accidental, it's intentional. This is not the Republican Party I remember, sadly.


I think the Republicans are exacting their revenge for the IRS targeting of certain right-leaning political groups which enjoyed non-profit status. There certainly appears to be no sound business case for the cuts. Works for all us expats, though!


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## BBCWatcher (Dec 28, 2012)

"Works"?


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## maz57 (Apr 17, 2012)

Meaning somewhere between little to no resources available to chase after expats, most of whom would likely owe no tax anyway. Sorry, I find it hard to feel any sympathy for the IRS. They are the enforcement face of exceedingly bad tax policy.


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## BBCWatcher (Dec 28, 2012)

Maz, I think you have it completely backwards. It's in the interest of filers, especially those overseas, to have an IRS that provides excellent service. The Taxpayer Advocate explained the problems well.

That said, I am frequently amazed at how well the IRS functions given how underfunded it is. But the IRS clearly needs more funding. Nobody who has seriously looked at this problem disagrees.

Congress -- that'd be the Republican Party, specifically -- also needs to simplify the tax code. Simplification does _*not*_ mean reducing or eliminating progressivity. The President (as I write this) is recommending particular tax code changes that will start to reduce complexity, for example moving toward more unified and simpler tax incentives for education and for childcare. That's a start. IRS Form 8938 and FinCEN Form 114 reporting requirements could be combined into a single form to pick another example that ought to be easy. If the Republican Party will reverse course and boost IRS funding -- or, failing that, if voters as soon as 2016 can remove the Republican Party from office en masse -- then the IRS would have the resources to create and maintain something like the greatly simplified IRS Form 1040XP that I proposed that'd likely cover 80+ percent of U.S. persons living overseas. We'd also likely see an IRS that doesn't have to kowtow to Intuit's lobbyists.

Unfortunately we don't have the "good government" Republican Party of yore that'd be pushing for any of these ideas and others like them. Those people are now Democrats or independents.


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## maz57 (Apr 17, 2012)

BBCWatcher said:


> Maz, I think you have it completely backwards. It's in the interest of filers, especially those overseas, to have an IRS that provides excellent service. The Taxpayer Advocate explained the problems well.


For the last couple of years the Taxpayer Advocate has (in her annual report to Congress) been very critical of the IRS for it's bad faith treatment of expat taxpayers who have come forward voluntarily. For whatever reason, Congress has not responded. If I were Nina Olson, I'd be very discouraged and actively looking for another job where my efforts were not totally ignored.


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## maz57 (Apr 17, 2012)

BBCWatcher said:


> Congress -- that'd be the Republican Party, specifically -- also needs to simplify the tax code. Simplification does _*not*_ mean reducing or eliminating progressivity. The President (as I write this) is recommending particular tax code changes that will start to reduce complexity, for example moving toward more unified and simpler tax incentives for education and for childcare. That's a start. IRS Form 8938 and FinCEN Form 114 reporting requirements could be combined into a single form to pick another example that ought to be easy. If the Republican Party will reverse course and boost IRS funding -- or, failing that, if voters as soon as 2016 can remove the Republican Party from office en masse -- then the IRS would have the resources to create and maintain something like the greatly simplified IRS Form 1040XP that I proposed that'd likely cover 80+ percent of U.S. persons living overseas. We'd also likely see an IRS that doesn't have to kowtow to Intuit's lobbyists.


All good suggestions and the Taxpayer Advocate also included many constructive suggestions along with her criticisms. Sadly, I don't see meaningful tax reform happening any time in the foreseeable future because too many sacred cows would have to be slaughtered to make it happen. Those would be both Republican and Democratic cows.


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## Nononymous (Jul 12, 2011)

Combine this:



> Meaning somewhere between little to no resources available to chase after expats, most of whom would likely owe no tax anyway.


With this:



> For the last couple of years the Taxpayer Advocate has (in her annual report to Congress) been very critical of the IRS for it's bad faith treatment of expat taxpayers who have come forward voluntarily.


And I'd say it starts to make a good case for expats keeping themselves off the radar.


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## KRM2015 (Jan 21, 2015)

Anyone have any experience of the "walk in" facility at the London office? Was thinking of going in there with the forms I've completed and having them cast their eye over it to make sure there are no glaring errors


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## BBCWatcher (Dec 28, 2012)

Nononymous said:


> And I'd say it starts to make a good case for expats keeping themselves off the radar.


No, that doesn't follow.

Underfunded and understaffed agencies tend to get less forgiving, less patient, less customer service-oriented, and more prosecutorial the more underfunded and understaffed they are. At the same time information processing is getting less expensive and data sharing is getting more pervasive, so "flagging" and letters of inquiry are easier (and cheaper). Also, the IRS's Streamlined Program can only get less generous in the future.

This'd be a rather good time to get on the radar, in my view.


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## Nononymous (Jul 12, 2011)

BBCWatcher said:


> No, that doesn't follow.
> 
> Underfunded and understaffed agencies tend to get less forgiving, less patient, less customer service-oriented, and more prosecutorial the more underfunded and understaffed they are. At the same time information processing is getting less expensive and data sharing is getting more pervasive, so "flagging" and letters of inquiry are easier (and cheaper). Also, the IRS's Streamlined Program can only get less generous in the future.


What I should have added was the rumour about the poor state of the IT infrastructure, which would suggest that inexpensive data processing won't be that useful. It could be many, many years before the IRS does anything threatening with the FATCA data.

I think you can make a case for both. Your odds of being discovered aren't going to go up any time soon. But it's also a good time to become compliant, should one choose that path, because the odds of anything being looked at too closely are very low.

(On that note, how does an overseas audit even work? Mail and phone calls?)


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## maz57 (Apr 17, 2012)

BBCWatcher said:


> Also, the IRS's Streamlined Program can only get less generous in the future.


Actually, the trend is the opposite; i.e. towards more generous. Expats who have waited (or only recently found out they were supposed to file) have been offered far better, less complicated deals than those who came forward earlier. This has resulted in a great deal of unfairness and bitterness among the hapless innocents who entered OVDI and paid massive penalties while the late comers are getting off easy. This is one of the many Taxpayer Advocate criticisms of the IRS' handling of the expat "problem".

Even homelanders are now getting better deals on their undeclared offshore accounts (5% instead of 27.5% in OVDI), and these are people who knew or should have known, not expats who have lived abroad for years.


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## Bevdeforges (Nov 16, 2007)

KRM2015 said:


> Anyone have any experience of the "walk in" facility at the London office? Was thinking of going in there with the forms I've completed and having them cast their eye over it to make sure there are no glaring errors


Based on how the Paris office operates, I suspect they won't be wild about being asked to give your returns a quick look-over. The IRS in general doesn't like giving general assurances, and prefers very much to answer specific questions. However, they still won't guarantee their answers, even if they tell you everything "looks" OK. (Ultimately, it's one of their colleagues back in the US that will decide if you're up for an audit or not.)
Cheers,
Bev


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