How would you feel about the IRS if they apologized to you and sent you money to make up for all your troubles?

Plenty of people I know would love it! They've been battered by the IRS, sometimes not because of their own errors. Other times, they have made mistakes but the IRS made it incredibly difficult to correct the problems, even when the right documentation and explanation was offered up. I've worked with some really nice, competent and efficient employees of the IRS. But there are times when I end up feeling terribly burdened by an undereducated employee or one who has much pent up anger.

In the National Taxpayer Advocate's 2007 Annual Report to Congress, a suggestion is made that the Congress should authorize the IRS to give money to taxpayers when "... the action or inaction of the IRS has caused excessive expense or undue burden to the taxpayer, and the taxpayer meets the IRC § 7811 definition of significant hardship."

It is suggested that taxpayers should be eligible to receive between $100 and $1,000 if they fall under these guidelines. And the key? These payments would not be taxable!!!! Hooray. I doubt this will ever happen, but the more I think about it, the more I believe it's a really good idea!

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

There's a very simple rule at the Internal Revenue Service: Employees are only supposed to look at tax records which are required to do their jobs. They're not supposed to look at anyone else's records. Not their neighbors. Not the ex-wife. Not a celebrity. Those records are off-limits.

The Treasury Inspector General has reported that in fiscal 2007, they opened 521 investigations related to employees snooping into tax records. In fiscal 2006, there were 448 investigations opened. That's a 16% increase in fiscal 2007.

The number of "adverse administrative actions" against IRS employees has gone up too, more than doubling between 2006 and 2007.

"The numbers aren't so bad," you might think. Guess again. Those are only the people who actually got caught snooping. Imagine how many other employees are snooping too. The IRS says the investigations involved fewer than 1% of employees, but as a taxpayer, that doesn't make me feel any better.

Of any agency that should be protecting our personal information it should be the IRS. I don't care if the number of employees accessing information without authorization is low. It still bothers me, particularly when identity theft is such a concern.

Forensic accountant Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations through her company, Sequence Inc. Forensic Accounting. The Association of Certified Fraud Examiners honored Tracy as the 2007 winner of the prestigious Hubbard Award and her first book, Essentials of Corporate Fraud, will be on bookshelves in March 2008.