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A Broken Process and a Four Cent Fine

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Millions of Americans hope they have completed their taxes correctly during tax season. One man in California, however, suffered the penalty of underpayment.

Here’s the story:

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.

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

The story gets crazier as it’s further explained. This situation happened in 2010. The money that was unpaid had been due since 2006. The penalties and taxes the accrued on that four cent debt were a whopping $202.31! That seems rather excessive for such a minuscule fine, especially one that built up over just four years! The reason this fine went unpaid? Because Zeff wasn’t aware of this fine. He was never told of any late payments or taxes due. If he had been, it’s safe to say he could’ve scrambled together the extra four cents needed. Not only would he have been spared from such a whopping fine, but the IRS would’ve have had to send two agents, a car, and the paperwork needed to collect this money. After all, don’t most copies cost about five cents?

The ridiculousness of the situation was certainly not lost on 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.”

confused cosultant

© Flickr user Brian Lane Winfield Moore

There might be a reasonable explanation for this story, but it’s hard to imagine one. There’s some indication that Zeff might have been several years behind on settling up, which could have triggered the personal visit. But why would the agents go on site to collect a couple of pennies? If what Zeff is saying is true, there was simply no reason for this visit. Either his errors should have been properly communicated to him beforehand, or if this was really only a four cent problem, then there’s no chance it was worth even a fraction of the gas money to send the agents over in person.

The most important lesson is that IRS employees are not empowered with sufficient authority and responsibility. They should feel comfortable looking at the letter and making the decision not to waste hours of their day serving a notice for a nickel in fees. If perhaps IRS agents are not allowed to look at these letters, than why do they need to be hand delivered? Clearly, someone is not thinking conscientiously about work.

This IRS problem is one that impacts everyone since it’s our tax dollars being wasted in situations like these, but it’s very possible that similar situations are going on in your organization. It’s important to ensure your employees feel comfortable enough to take initiative when they come across a situation that might need to be resolved in a different way than policy dictates. Because no matter how smart you are, it’s impossible to be aware of the best policy for every situation every time.

Based on such anecdotes it’s easy to make fun of bureaucracies from the outside, but we  all know that there are problems throughout every organization. That’s why AccelaWork works with companies and non-profits to help redesign business processes based on stakeholder engagement. Contact our business consultants today for more information! We can help you avoid goofing up like the IRS, and help you keep your resources flowing in an intelligent and efficient manner.

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