D.C. court: IRS screwed taxpayers out of billions

"In a blistering 2-1 opinion, the D.C. Circuit today reinstated a challenge to the IRS's procedures for issuing billions of dollars of refunds of the long distance telephone excise tax. Cohen v. Commissioner, No. 08-5088 (D.C. Cir. Aug. 7, 2009). Here is the opening of the majority's opinion:

The opinion:

"Comic-strip writer Bob Thaves famously quipped, 'A fool and his money are soon parted. It takes creative tax laws for the rest.' In this case it took the Internal Revenue Service’s (“IRS” or “the Service”) aggressive interpretation of the tax code to part millions of Americans with billions of dollars in excise tax collections. Even this remarkable feat did not end the IRS’s creativity. When it finally conceded defeat on the legal front, the IRS got really inventive and developed a refund scheme under which almost half the funds remained unclaimed."