4 ms·

If this true ? Can politicians target taxpayers based on what perfectly legal activities they do ? For example can Trump ask IRS to target say H1B employees ?

MiroF 7y ago
The IRS publicly says that it audits poorer taxpayers at a higher rate because they require less manpower to audit. https://www.propublica.org/article/irs-sorry-but-its-just-easier-and-cheaper-to-audit-the-poor https://www.propublica.org/article/irs-sorry-but-its-just-ea...
- jandrese 7y ago
  Sure it's easier, but it seems like the return on investment must be lousy. Is it really easier to audit 1 million people who end up owing an average of $100, or 10 people who end up owing $20 million?
  - Kalium 7y ago
    I would bet that it's much easier to predict costs in both time and money for auditing a poorer person than a wealthier one.
    - ta999999171 7y ago
      Is this the "run the government like a business" I keep hearing so much good stuff about?
      - kube-system 7y ago
        You can just as easily file this one under "every organization has finite resources to allocate".
  - londons_explore 7y ago
    Depends on the fee structure. If those poor people end up owing $100, but the IRS can slap $500 of wrongful filing fees on them, and then come up with a 15 year payment plan at 30% interest, they get $25k. Rich people would just pay the fine and move on, or claim bankruptcy and become rich again in a few years.
    - samplatt 7y ago
      Can a private (or corporate) entity take the IRS to court? As a non-American, I always assumed a big reason of why the rich aren't taxed/audited as much was because tying the funds up in infinite legality was cheaper than actually paying taxes.
    - deleted 7y ago
      [deleted]
    - deleted 7y ago
      [deleted]
    - dmoy 7y ago
      The IRS cannot charge a 30% interest rate. They charge short term plus 300bps. There's some other fees, but they cap out too.
  - lacker 7y ago
    The difficulty of auditing someone is totally dependent on the complexity of their tax return. If someone just adds up the numbers wrong and pays the wrong amount of tax, how hard is that to catch? Whereas if someone reports thousands of different stock transactions over a five-year period, and those don’t quite add up, that could easily be a more expensive audit than a thousand automated ones.
- tootahe45 7y ago
  also more likely to be breaking the law
- kube-system 7y ago
  As long as they're all legitimate audits, that seems like a reasonable way to prioritize work. I too tackle the lower-hanging fruit first when I begin a task. If this is the methodology that generates the most revenue, then it is generating the most potential benefit to those who rely on government services -- largely, those drawing SS/Medicare/Medicaid/SNAP/EITC.
- masonic 7y ago
  This report is based upon data from during the Obama administration only. "Audit rates were calculated per 1,000 income tax filings, over the four tax years from 2012 to 2015."
mcny 7y ago
> For example can Trump ask IRS to target say H1B employees ? I anal but my guess is no, at least not as an order, and at least not in a way that is consistent with our laws. > In 2013, the United States Internal Revenue Service (IRS) revealed that it had selected political groups applying for tax-exempt status for intensive scrutiny based on their names or political themes. This led to wide condemnation of the agency and triggered several investigations, including a Federal Bureau of Investigation (FBI) criminal probe ordered by United States Attorney General Eric Holder. https://en.wikipedia.org/wiki/IRS_targeting_controversy https://en.wikipedia.org/wiki/IRS_targeting_controversy However, sitting senators and representatives can write letters to the IRS or any federal agency and my understanding is the people at the federal agency actually read those letters. Here's just an example I found on Google search > Senate Finance Committee Ranking Member Sen. Ron Wyden, D-Ore., and House Ways and Means Ranking Member Rep. Richard Neal, D-Mass., today questioned whether the Trump administration is wrongfully pressuring the IRS to produce 2018 withholding tables that would result in systematic underwithholding of federal taxes from taxpayer earnings. In a letter to Acting IRS Commissioner and Assistant Secretary for Tax Policy David Kautter, Wyden and Neal asked about interactions between Trump officials and the IRS regarding the development of the tables, which are expected to be released in the near future. If an undue amount of taxes are underwithheld by employers now, millions of hardworking Americans will owe taxes next April instead of receiving a tax refund. https://www.finance.senate.gov/imo/media/doc/010818%20IRS%20Witholding%20Letter.pdf https://www.finance.senate.gov/imo/media/doc/010818%20IRS%20... https://www.finance.senate.gov/ranking-members-news/wyden-neal-question-political-manipulation-at-irs-seek-to-prevent-hardworking-americans-from-getting-hit-with-massive-tax-bill https://www.finance.senate.gov/ranking-members-news/wyden-ne...
hanniabu 7y ago
I don't see why not, it appears nobody is held accountable anymore
TomatoTomato 7y ago
Not directly, but certain IRS ranking officials have targeted specific groups in the past for both administrations. However, there is also rampant fraud with the EITC. Similarly with the Child Tax Credit, it is likely because it is refundable, meaning that you receive a check after your taxes are paid rather than a deduction which can only bring your liability down to zero. Also auditing these are fairly trivial and usually only done through the mail so they can send them out en masse based on red flags. > "The IRS estimates that 22 to 26 percent of EITC payments were issued improperly in Fiscal Year 2013. The dollar value of these improper payments was estimated to be between $13.3 billion and $15.6 billion." https://www.washingtonexaminer.com/report-massive-fraud-still-rampant-in-earned-income-tax-credit-program https://www.washingtonexaminer.com/report-massive-fraud-stil... https://www.eitc.irs.gov/tax-preparer-toolkit/frequently-asked-questions/fraud/fraud https://www.eitc.irs.gov/tax-preparer-toolkit/frequently-ask...

MiroF 7y ago

The IRS publicly says that it audits poorer taxpayers at a higher rate because they require less manpower to audit. https://www.propublica.org/article/irs-sorry-but-its-just-easier-and-cheaper-to-audit-the-poor https://www.propublica.org/article/irs-sorry-but-its-just-ea...

jandrese 7y ago
Sure it's easier, but it seems like the return on investment must be lousy. Is it really easier to audit 1 million people who end up owing an average of $100, or 10 people who end up owing $20 million?
- Kalium 7y ago
  I would bet that it's much easier to predict costs in both time and money for auditing a poorer person than a wealthier one.
  - ta999999171 7y ago
    Is this the "run the government like a business" I keep hearing so much good stuff about?
    - kube-system 7y ago
      You can just as easily file this one under "every organization has finite resources to allocate".
- londons_explore 7y ago
  Depends on the fee structure. If those poor people end up owing $100, but the IRS can slap $500 of wrongful filing fees on them, and then come up with a 15 year payment plan at 30% interest, they get $25k. Rich people would just pay the fine and move on, or claim bankruptcy and become rich again in a few years.
  - samplatt 7y ago
    Can a private (or corporate) entity take the IRS to court? As a non-American, I always assumed a big reason of why the rich aren't taxed/audited as much was because tying the funds up in infinite legality was cheaper than actually paying taxes.
  - deleted 7y ago
    [deleted]
  - deleted 7y ago
    [deleted]
  - dmoy 7y ago
    The IRS cannot charge a 30% interest rate. They charge short term plus 300bps. There's some other fees, but they cap out too.
- lacker 7y ago
  The difficulty of auditing someone is totally dependent on the complexity of their tax return. If someone just adds up the numbers wrong and pays the wrong amount of tax, how hard is that to catch? Whereas if someone reports thousands of different stock transactions over a five-year period, and those don’t quite add up, that could easily be a more expensive audit than a thousand automated ones.
tootahe45 7y ago
also more likely to be breaking the law
kube-system 7y ago
As long as they're all legitimate audits, that seems like a reasonable way to prioritize work. I too tackle the lower-hanging fruit first when I begin a task. If this is the methodology that generates the most revenue, then it is generating the most potential benefit to those who rely on government services -- largely, those drawing SS/Medicare/Medicaid/SNAP/EITC.
masonic 7y ago
This report is based upon data from during the Obama administration only. "Audit rates were calculated per 1,000 income tax filings, over the four tax years from 2012 to 2015."

mcny 7y ago

> For example can Trump ask IRS to target say H1B employees ? I anal but my guess is no, at least not as an order, and at least not in a way that is consistent with our laws. > In 2013, the United States Internal Revenue Service (IRS) revealed that it had selected political groups applying for tax-exempt status for intensive scrutiny based on their names or political themes. This led to wide condemnation of the agency and triggered several investigations, including a Federal Bureau of Investigation (FBI) criminal probe ordered by United States Attorney General Eric Holder. https://en.wikipedia.org/wiki/IRS_targeting_controversy https://en.wikipedia.org/wiki/IRS_targeting_controversy However, sitting senators and representatives can write letters to the IRS or any federal agency and my understanding is the people at the federal agency actually read those letters. Here's just an example I found on Google search > Senate Finance Committee Ranking Member Sen. Ron Wyden, D-Ore., and House Ways and Means Ranking Member Rep. Richard Neal, D-Mass., today questioned whether the Trump administration is wrongfully pressuring the IRS to produce 2018 withholding tables that would result in systematic underwithholding of federal taxes from taxpayer earnings. In a letter to Acting IRS Commissioner and Assistant Secretary for Tax Policy David Kautter, Wyden and Neal asked about interactions between Trump officials and the IRS regarding the development of the tables, which are expected to be released in the near future. If an undue amount of taxes are underwithheld by employers now, millions of hardworking Americans will owe taxes next April instead of receiving a tax refund. https://www.finance.senate.gov/imo/media/doc/010818%20IRS%20Witholding%20Letter.pdf https://www.finance.senate.gov/imo/media/doc/010818%20IRS%20... https://www.finance.senate.gov/ranking-members-news/wyden-neal-question-political-manipulation-at-irs-seek-to-prevent-hardworking-americans-from-getting-hit-with-massive-tax-bill https://www.finance.senate.gov/ranking-members-news/wyden-ne...

hanniabu 7y ago

I don't see why not, it appears nobody is held accountable anymore

TomatoTomato 7y ago

Not directly, but certain IRS ranking officials have targeted specific groups in the past for both administrations. However, there is also rampant fraud with the EITC. Similarly with the Child Tax Credit, it is likely because it is refundable, meaning that you receive a check after your taxes are paid rather than a deduction which can only bring your liability down to zero. Also auditing these are fairly trivial and usually only done through the mail so they can send them out en masse based on red flags. > "The IRS estimates that 22 to 26 percent of EITC payments were issued improperly in Fiscal Year 2013. The dollar value of these improper payments was estimated to be between $13.3 billion and $15.6 billion." https://www.washingtonexaminer.com/report-massive-fraud-still-rampant-in-earned-income-tax-credit-program https://www.washingtonexaminer.com/report-massive-fraud-stil... https://www.eitc.irs.gov/tax-preparer-toolkit/frequently-asked-questions/fraud/fraud https://www.eitc.irs.gov/tax-preparer-toolkit/frequently-ask...