IRS Event Aims at Solving Tax, Image Problems

Chris and Alan Gandall have been battling Uncle Sam for almost a decade. So when the Internal Revenue Service announced free tax advice at its opening of Problem Solving Day on Saturday, the Huntington Beach couple hauled in 11 boxes filled with their tax records and hoped to find some answers.

Their problems weren’t reconciled, but they got smiles and receptive ears from IRS agents wearing “We Work for You” buttons.

“What’s the purpose of today if you can’t help us resolve our situation?” Chris Gandall asked an IRS counselor after they were told little could be done Saturday about the $150,000 they allegedly owe.

The Gandalls’ case is a complicated one that began in 1988. Most of the nearly 400 other taxpayers at Saturday’s event came with simpler questions and left satisfied.

After an hour of consultation, Brenda Boucher left the Chet Holifield Federal Building smiling.

“Today was very good,” Boucher, of Trabuco Canyon, said. “They were very helpful, very prompt. I came in with very little faith in the IRS, but now I have an ounce of faith.”

About 320 people showed up for appointments Saturday, and another 75 came as walk-ins. Refreshments and a large television were available for families and children. Assistance came in many languages, including Vietnamese, Spanish and Chinese.

Problem Solving Day will become a monthly national fixture for the tax-collecting agency, which fielded questions in 33 cities across America on Saturday.

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The event is part of efforts by the agency to allay recent criticism that it is out of touch with the public. In September, the IRS issued an apology after Senate hearings publicized alleged abuses by the agency, including the use of illegal tax-collection quotas and harassment of lower-income taxpayers.

At a rally Saturday in Roswell, Ga., House Speaker Newt Gingrich (R-Ga.), who supported recent legislation to overhaul the agency, denounced the IRS event as a “public relations gimmick designed by the White House.”

“It’s a nice thing to do, but it’s not a substitute for the kind of profound reform that is in the IRS reform bill that was passed by the House two weeks ago,” Gingrich said.

Gimmick or not, the event helped dispel for some the notion that the IRS is out to get taxpayers.

Across the nation, thousands of people showed up to discuss questions about escalating penalties or clearing up late returns.

But for taxpayers like the Gandalls, Problem Solving Day was more frustrating than helpful.

“We went there thinking they could cut through some of the red tape,” Chris Gandall said. “But instead, we wasted two hours and are back to where we were.”

The couple arrived at the event at 9:30 a.m. Saturday, half an hour before their appointment to wheel in their boxes of tax documents. When they met with officials, they explained how the IRS had originally wrongly charged them $500,000 in penalties.

After shelling out $70,000 to hire an accountant and tax attorney and wrangling with IRS agents, auditors and appeals officers, the IRS offered to settle with them for $150,000, they said. But the couple argued that they owed the government nothing and had the documentation to prove it.

On Saturday, the couple showed a team of IRS counselors neatly collated documents and binders of tax documents. They complained of inept IRS agents accusing them of running an illegitimate business.

“We run a small mortgage company, and the IRS did an audit in our office. Then one day, the auditor actually said to me, ‘Tell me, what do you really do?’ ” Alan Gandall said. “It’s been a complete nightmare.”

IRS counselor Janet Cole listened patiently and then softly responded, “I cannot settle your case for you,” adding, “but I’m ready to listen.”

The couple later were advised to file a complaint to the IRS to register their allegations of employee misconduct, to continue to meet with their IRS counselor and perhaps to proceed to tax court.

“We can’t guarantee that we can resolve everyone’s problems today,” IRS spokeswoman Dorsey Kozarovich said.

But that’s what people were hoping.

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In Los Angeles, the downtown federal building opened its doors about 8 a.m., an hour earlier than planned, to accommodate a growing crowd outside.

Gus Wilson left the office pleased after being told that the agency owes the Pomona church where he works more than $3,000.

In Baltimore, where IRS Commissioner Charles Rossotti greeted people at the office’s door, Tony Zappardino said he was “very, very pleased” with the resolution of a case involving seizure of almost $30,000 from his bank account for payment of his daughter’s disputed back taxes.

“The young lady who took care of me did it in a beautiful way,” Zappardino said. “They should do this all the time.”

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Vivian and Charles Shih pursued their problem with payroll taxes in Baltimore. To their surprise, the Shihs found themselves chatting with Secretary of the Treasury Robert E. Rubin.

“It was really gratifying to speak to some of the people here,” Rubin said. “It helps set a tone inside the Internal Revenue Service.”

In Hartford, Conn., Scott Davis, an accountant, praised the agency’s attempt to deal “like a business would deal with customers. I was able to do in one hour what it took four years of paperwork to deal with.”

In Indianapolis, however, Harry R. Thompson said he remained suspicious about the IRS’ motives for the event.

“This is nothing more than a good public relations stroke,” he said. “This is what occurs when a company is in trouble. They cannot change the IRS.”

The next Problem Solving Day will be on Dec. 17, with offices open locally in Riverside. The IRS also operates an advice service called the Taxpayer Advocate, which can be reached at (800) 829-1040 during weekdays. For tax forms, call (800) 829-3676. For further information, call the Laguna Niguel district office, at (714) 360-2175.

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Times staff writer Jack Leonard and the Associated Press contributed to this story.