Collecting unpaid taxes four pennies at a time

Aaron Zeff is the owner of Harv’s Metro Car Wash in Sacramento, California. Imagine his surprise when, one day last March, federal agents showed up at his business demanding payment of an amount owed from tax year 2006.

Just how much did Zeff need to cough up? Four pennies.
 
"[They] came into the car wash, handed my manager a bill, and it was from the IRS," Zeff told reporters from The Sacramento Bee and local TV stations. "The amount was four cents, four pennies."
 
You might expect that, under the circumstances, the agents would be embarrassed or, at least, apologetic and treat the matter lightly. Not so.
 
“They were deadly serious, very aggressive, very condescending,” Zeff told reporters. They were rude, he added, and “they didn’t even get a car wash.”
 
The actual bill they presented him was for more than $200. Zeff underpaid his 2006 taxes by four cents. With interest and penalties totaling $202.31, the total owed was $202.35.
 
If the whole matter doesn’t seem ridiculous enough, add the fact that the IRS never notified Zeff that he owed any money until the agents showed up. Zeff’s attorney, Ashley West, told reporters that the business received a letter from the IRS last October indicating there were no taxes due and no forms left unfiled.
 
"It was a surprise to us that they came on site and a surprise to us we didn't receive any correspondence related to it," West told reporters.
As for Zeff, he’s keeping his sense of humor about the whole incident.
 
"It's hilarious that two people hopped in a car and came down here for just four cents," he said. "I think [the IRS] may have a problem with priorities."
 
The agents might not see how bizarre the matter is, but Zeff is using it to his advantage. Right after the visit from the feds, he told reporters at CBS News that he was going to hold “promotions for customers who pay their taxes on time – four-cent car washes.”
 
What does the IRS have to say about this? Spokesman Jesse Weller refused comment "due to privacy and disclosure laws."
 
Zeff said he surely would have paid the four cents owed, had he known about it. He not only didn’t receive notice that he owed money before it ballooned to $202.31 plus four cents, but he also had a letter from the IRS stating he owed no taxes.
 
Evidently the IRS doesn’t consider itself a trustworthy witness. Paying taxes is serious business. But you have to wonder how much it cost all of us for two agents to get in a car, drive across town, and hand deliver that notice, even when you factor in the interest and penalties they claim Zeff owes.
 
Related articles:

You may like these other stories...

IRS audits less than 1 percent of big partnershipsAccording to an April 17 report from the Government Accountability Office (GAO), the IRS audits fewer than 1 percent of large business partnerships, Stephen Ohlemacher of the...
Legislation coming out of Washington just might reduce homeowners' burden for disaster insurance. It's a topic very much on everyone's minds since the mudslide in Oso, Washington. The loss of human life was...
Divorce is hard, and the IRS isn't going to make it any easier. The IRS generally says "no" to tax deductions that might ease the pain of divorce. In certain circumstances, however, you might be able to salvage...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.