The IRS Serves Its ‘Customers’ by Terrifying Them

As tax season begins, the IRS is making a show of using its newly expanded budget to improve the agency’s “customer service,” mainly by trying to answer the questions of perplexed taxpayers more than 13 percent of the time. Its biggest challenge will be persuading Americans that they qualify as customers of the IRS in any meaningful sense.

The IRS, after all, does not provide goods or services that anyone would voluntarily choose to buy. Its main function is separating people from their money, and its chief tool is fear, as illustrated by the $2.1 million penalty it imposed on an 82-year-old grandmother for failing to file a form on time.

Monica Toth was born in Buenos Aires, where her Jewish father ended up after fleeing the Nazis in the mid-1930s. She immigrated to the United States in the early 1960s and eventually became a citizen.

Toth’s father prospered as a businessman in Buenos Aires, and shortly before his death in 1999 he set aside several million dollars for her in a Swiss bank account. That made Toth subject to a requirement that Americans report foreign accounts containing more than $10,000 on a one-page form known as an FBAR.

Toth, who completed her tax returns by hand using forms she obtained at the local library, says she initially was not aware of that requirement. When she discovered her error in 2010, she tried to correct it by filing FBARs for prior years, but that paperwork somehow was routed to the Centers for Medicare & Medicaid Services instead of the Treasury Department.

A 2011 IRS audit found that Toth had sometimes overpaid and sometimes underpaid her income taxes. On balance, she owed about $40,000 in taxes and penalties.

But that was not the