The American Institute of CPAs (AICPA) is asking the IRS Commissioner to resolve what it suggests is a "widespread problem" for taxpayers. Download AICPA Letter to IRS on Erroneous Form 3520 Letters to Taxapyers.082812. For 2010 and earlier years, the IRS apparently has made a wide range of systemic mistakes in processing the form required to be filed annually by owners of a foreign trust--Forms 3520, the Annual Return to Report Transactions with Foreign Trusts and REceipt of Certain Foreign Gifts.
The AICPA reports errors including:
- instructions to fill out Part II about ownership of a foreign trust, when the taxpayer is not the owner of a foreign grantor trust;
- instructions to provide additional information required when a taxpayer answers a question "yes" when the question on the form was answered "no";
- instructions to provide identifying information required to be submitted when the information was already submitted; and
- insturctions to provide an explanatory statementwhen such statement was already submitted.
This looks like one of those kinds of things that happen when staffing at a government agency is reduced beyond what is reasonable for the kinds of tasks that have to be carried out. Query--isn't it likely that the right's (and now officially the GOP's) drive to reduce staffing at all levels of government agencies (except, of course, for the right's pet project, expansion of the military) likely to increase the headaches for ordinary citizens because those government agencies simply won't be able to get their jobs done well with the reduced staffing and morale problems that will cause?