A Citizen confronts the Bureaucracy

I recently concluded a contract with the National Bank of Kazakhstan to provide technical assistance in their effort to develop inflation-targeting capacity. I am working together with an American and a Czech econometrician, and thus decided it would be best to incorporate as a Limited Liability Company.

I live in Maryland and thus went to the Maryland government’s website and within half an hour had not only filled in the required application and paid the required fee, but had actually received (via email) the official, signed registration and Articles of Organization document for my company “Economic Consulting, LLC.” Sorry about the unimaginative name, I will give it more thought the next time.

Kazakhstan is a signatory of a tax treaty with the United States that requires it to deduct 20% from any payments to me under our contract unless I have provided a number of specific documents. In addition to the above Articles of Organization, I must also provide a certificate of residency for the company issued by the U.S. Treasury’s Internal Revenue Service and certified by an Apostille issued by our State Department. Rather than have 20% deducted, we agreed that the National Bank would not pay me anything until these documents were received. I was on a learning curve that I really didn’t care to be on.

Hence began what I hoped would be an equally efficient e-government interaction with the Federal government that proved to be anything but. For starters, the form 8802 to request the certificate was three complicated pages long and could not be submitted on-line. Thus the printed form and my check for $85 were sent August 27, 2014 to the IRS by U.S. mail. On September 3 my check cleared so I knew the request had been received. One worry eliminated.

A month later on October 6th I received a letter from the IRS that I assumed was the long-awaited certificate. Instead it was an acknowledgement that my request had been received on September 3rd and that the requested certificate would be sent within 30 days. And indeed in another 30 days another letter arrived, but rather than the certificate it was another letter like the last one saying that the certificate would be sent within another 30 days. Shit.

The letter provided a phone number, which I now called expecting a long wait at the end of an automated list of choices. In fact, the wait was only about 20 minutes at which point Karen answered my call. “Oh my goodness. You should not have received those letters (i.e., we should not have sent those letters). Those were the wrong letters because there was a problem with your request.” She proceeded to carefully and politely walked me through the application form to correct the one or two things I had gotten wrong. The confusion resulted from the fact that I will as always file my business expenses and income on Form C of the 1040 rather than filing separately for the LLC. Blaw, blaw, blaw.

Karen gave me her personal business fax number (yes the U.S. government still uses faxes) and said that she would process it right away. As I no longer have a fax machine, I walked down the street to a neighbor’s with a fax and sent it off receiving the normal confirmation that it had been received. Ten days passed. Calling that number had been so successful the last time that I tried it again. After a one-hour wait on hold Ms. Douglas answered my call and assured me that my fax had never been received. A short, pointless discussion followed about the earlier fax and I finally agreed to send it again, this time to her fax number. I needed the exercise anyway. She promised to call me to confirm its receipt, which in fact she did saying that it was now fine and she would process it immediately and I should receive the certificate within ten days. I was excited by the progress, but reflect nostalgically on the 30-minute start to finish, all on-line, incorporation of my company in Maryland.

Ten days passed and it hadn’t arrived so a called again, this time with only a 15 minute wait (note to self: Monday at noon is a good time to call the IRS). Jane informed me that the document had been processed by Ms. Douglas and printed and would now be ship to the Utah center for mailing to me and should arrive within ten days!!! They don’t do this every day, she explained politely. You can’t make this stuff up. I took a deep breath and struggled to keep my voice under control. I reminisced nostalgically about the 30-minute start-to-finish (including delivery to my desk) incorporation of my little company in Maryland.

Jane quickly agreed with me that it would be nice for the Federal Government to catch up with the twentieth century (I meant the 21st century—but would settle for the 20th). Unfortunately, unlike the private sector, which is continually looking for ways to do things better for less, Jane and her boss have no incentive to do anything about the ridiculous process she described to me. The state of Maryland, which seems better organized and better managed, does at least feel a bit of competitive pressure from Virginia and other states, lacking at the Federal level. I am not about to move to Mexico or some other country over this.

The certificate—a one liner confirming my address – finally arrived on December 3, 98 days after my request. Now I can learn about how to get an Apostille and hopefully get paid. I assure you that I have not made any of this up. Please pray for me.

P.S. The State Department office of Authentication informed me by phone with no wait at all that I could not get an appointment (at which time the Apostille could be given while I waited) for 15 days, but that I could drop it off and it would be ready within three days. Sounds encouraging but I am not holding my breath.

P.P.S. As instructed, this morning (December 4) I drove into town to “drop off” my document to be authenticated and was informed that the drop off is only from 8:00-9:00 am — I was too late. Back tomorrow!!!

About wcoats

Dr. Warren L. Coats specializes in advising central banks on monetary policy, and in the development of their capacity to formulate and implement monetary policy. He is retired from the International Monetary Fund, where, as Assistant Director of the Monetary and Financial Systems Department, he led missions to over twenty countries. Before then, he served as Visiting Economist to the Board of Governors of the Federal Reserve System, and to the World Bank, and was Assistant Prof of Economics at the Univ. of Virginia from 1970-75. Most recently he was Senior Monetary Policy Advisor to the Central Bank of Iraq; an IMF consultant to the central banks of Afghanistan, Kenya and Zimbabwe; and a Deloitte/USAID advisor to the Government of South Sudan. He is currently a member of the Editorial Board of the Cayman Financial Review and until the end of 2013 was a member of the IMF program team for Afghanistan. His most recent book is entitled "One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina."
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12 Responses to A Citizen confronts the Bureaucracy

  1. Fred Smith says:

    Well, based on my experience, this is pretty much how it works. Except you live in DC, so the Apostille will be lots easier and quicker to obtain. I will get to do it again next year (so will you, I suspect). I’m really excited about that.

  2. Pingback: IT’S BAD WHEN THE STATE OF MARYLAND IS THE GOLD STANDARD: A Citizen Confronts The Federal Bureaucra… | CRAGIN MEDIA

  3. Julius Hanssen says:

    I saw this in a movie once.

    The movie was “Brazil” and it ended badly for Mr. Tuttle – or was that Mr. Buttle?

  4. corkyboyd says:

    Are you now or have you ever been a member of the Communist … oops I mean Tea Party?

    While you think this is just ineptness, this is the IRS. Better cover you tracks by having a few views daily of The Daily Kos and the Huffington Post, especially if you have visited Drudge or Powerline. Try it. They will probably answer your phone calls in less than twelve minutes.

  5. Rick Caird says:

    It is clear the government does not have customers, only suitors.

  6. Bill Francis says:

    This is even worse the going the Department of Motor Vehicle, the former standard for incompetence! That’s the good news. As the government grows even larger with even more rules and regulations what you see here will be just a walk in the park.

  7. Bruce Warren says:

    Just so you’ll know you’re not alone, I am going through a “mail audit” for one tax year. After I submitted my responses, over a month later I received a form letter telling me they were reviewing my response.

    They sent four copies of the same letter in two different envelopes.

  8. MrJest says:

    See, they just want their 20%, and seek to make it as obnoxious as possible for you to avoid it. Tally up your hourly rate by the time you jump through all the hoops, and then compare it to the 2 – 5% you save by paying your “actual” taxes vs. the 20% “default” tax. I bet you wouldn’t have saved much at all… not to mention the wear and tear on your cardiovascular and neurological systems.

  9. daniel messing says:

    I applied for a passport to the State Department. My application was rejected, I think, because they couldn’t read the written out amount on the check (possibly because I used the term “hundredths”). I say “I think” because the explanation, scrawled on the envelope containing the check, was mostly illegible . . .

  10. Reblogged this on clever nicknames and commented:
    Ugh.

  11. forrest says:

    As an old Army First Sergeant, I have two general rules of thumb when dealing with the…Civil Service. Only one out of ten is worth a shit, so find that one and do all of your business exclusively with them. Then hurry up and wait.

  12. Mark Winkle says:

    Several years ago I received notice that the IRS had estimated my taxes. I had boxes of receipts which I offered to let them wander through if they so desired. As an international consultant and an outreach minister, my word is almost as good as God’s. And Warren, I do pray for you and for everyone that is trying to make this world a simpler, safer place for all of us.

    Your Friend,
    Mark Winkle
    The Winkle Institute for Worldwide Economic Stability

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