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I find it interesting how the IRS picks its targets. Facts shows the the most wealthy skip the most taxes. Yet the IRS has a hard time going after the most weal

I find it interesting how the IRS picks its targets. Facts shows the the most wealthy skip the most taxes. Yet the IRS has a hard time going after the most wealthy because they have the resources to fight it. The more recent crop of folks that have made money in crypto don't tend to be among those ready to fight the IRS hard, they are softer targets. They are targeting the little guy on purpose.

syops 5y ago
That’s a disturbing trend in the U.S. that is getting worse as time goes on. It’s disturbingly true in criminal matters. If crime isn’t too egregious you can avoid just punishment by having the resources to tie up the DA’s office.
- throwaway0a5e 5y ago
  This is just how things work when there's so many laws and they're so broad that the scope of "prosecutable criminal behavior" exceeds enforcement resources. Of course the DA's are gonna pick the easy wins with good optics and avoid hard targets and/or rocking the boat. That's just rational decision making. You can either increase resources and create a police state or decrease the amount of prosecutable criminal behavior and have people complain that "there ought to be a law" about <pet issue goes here>.
deleted 5y ago
[deleted]
basseq 5y ago
This is true, but it's philosophical. The IRS has finite resources, so it has a fundamental choice: 1. Maximize collections. This is what they're doing: spending their resources on cases with the best expected ROI. If you have $1T in net tax misses, chase the easiest 75% and expect a 90% collection rate. 2. Deter high absolute tax avoidance. This is what you're suggesting: spend their resources to make a statement, even if the ROI isn't there. If you have $1T in net tax misses, chase the hardest 25% and expect a 5% collection rate. I don't think you're wrong, as there's value in deterrence (i.e., sue the hell out of rich tax evaders, and even if you lose, maybe the next one will be less likely to push it).
- annoyingnoob 5y ago
  I'm really just advocating for a fair system. I have to wonder if a national sales tax isn't more fair than a national income tax - can we drastically reduce the need for collections? Edit: really just wondering out loud, I don't have the answers here - our current system needs work
  - johncessna 5y ago
    Fair for whom always needs to be discussed when talking about fairness. I personally like the sales tax idea, or even a flat tax - in the sense that everyone pays the same without all the loops holes, deductions, exemptions, that exist to gain corporate favor, buy votes, or push agendas. The problem with both of those is it isn't fair for some, specifically folks in the lower income brackets.
    - annoyingnoob 5y ago
      I don't have all of the answers but our current system taxes labor at a higher rate than investments, which creates a 'trickle-up' effect because the most wealthy make most of their money from investments. Then enforcement tends to hurt the little guy more. There is not much fair about our current system, so lots of room for improvement.
    - bena 5y ago
      Sales taxes are regressive. A 10% sales tax is more of a poor person's income than a wealthy person's income. Flat tax is also funny. Because it doesn't mean getting rid of loopholes and deductions, it means taxing every dollar the same. Effectively raising the taxes on those making less. Right now we have a progressive tax rate. Where the first X dollars are taxed at A%, the next Y dollars at A+5%, and so on. Deductions would still exist because at some point someone is going to make a good point that that money was just taxed. Or that the money went to the same goal as the tax would have. Deductions are there to find out what your taxable income is. It affects how much you owe because 10% of 900 is not the same as 10% of 1000.
  - Mediterraneo10 5y ago
ucha 5y ago
It's not as simple as that... The wealthy are, justly, disproportionally targeted by audits, 10x more likely to be audited if you make more than $10m vs less than $100k. Vast ressources will not necessarily prevent you from being convicted of tax evasion cf. Charles Kushner who evaded low 5 figures in taxes while being a centimillionaire.
- dubcanada 5y ago
  Do you have any proof to back up that "the rich are 10x more likely to be audited"? Not trying to call you out but I'd like to read it, that number seems extremely far fetched. My guess is everyone has a small percent chance to get audited every year (unless they find a obvious issue) and it's just a flip of a coin. I imagine they have some kind of algorithm or MI to assist in finding discrepancies based on historical wins/loses. I doubt it's as simple as I made 10 million, therefore I am going to get audited eventually.
  - 8fGTBjZxBcHq 5y ago
    It's actually the opposite as far as I know. There have been several well-researched articles in the last few years about this. The automated flagging they use is tuned to find the common mundane violations, which tend to be by normal people with normal resources. The tax strategies of the extremely wealthy are a good deal more sophisticated and don't lend themselves well to automated checks like these.
  - ucha 5y ago
    People who declare (or don't declare) $0 income and high income tax payers are disproportionally likely to be audited. And if you make $10mm+ for a number of year, you're almost certainly going to be audited and anecdotally, that has been what I've seen. https://taxfoundation.org/irs-audited-12-million-households-2015/ https://taxfoundation.org/irs-audited-12-million-households-...
- dragonwriter 5y ago
  > The wealthy are, justly, disproportionally targeted by audits, Nope, they, unjustly, are not: https://www.propublica.org/article/irs-now-audits-poor-americans-at-about-the-same-rate-as-the-top-1-percent https://www.propublica.org/article/irs-now-audits-poor-ameri...

syops 5y ago

That’s a disturbing trend in the U.S. that is getting worse as time goes on. It’s disturbingly true in criminal matters. If crime isn’t too egregious you can avoid just punishment by having the resources to tie up the DA’s office.

throwaway0a5e 5y ago
This is just how things work when there's so many laws and they're so broad that the scope of "prosecutable criminal behavior" exceeds enforcement resources. Of course the DA's are gonna pick the easy wins with good optics and avoid hard targets and/or rocking the boat. That's just rational decision making. You can either increase resources and create a police state or decrease the amount of prosecutable criminal behavior and have people complain that "there ought to be a law" about <pet issue goes here>.

deleted 5y ago

[deleted]

basseq 5y ago

This is true, but it's philosophical. The IRS has finite resources, so it has a fundamental choice: 1. Maximize collections. This is what they're doing: spending their resources on cases with the best expected ROI. If you have $1T in net tax misses, chase the easiest 75% and expect a 90% collection rate. 2. Deter high absolute tax avoidance. This is what you're suggesting: spend their resources to make a statement, even if the ROI isn't there. If you have $1T in net tax misses, chase the hardest 25% and expect a 5% collection rate. I don't think you're wrong, as there's value in deterrence (i.e., sue the hell out of rich tax evaders, and even if you lose, maybe the next one will be less likely to push it).

annoyingnoob 5y ago
I'm really just advocating for a fair system. I have to wonder if a national sales tax isn't more fair than a national income tax - can we drastically reduce the need for collections? Edit: really just wondering out loud, I don't have the answers here - our current system needs work
- johncessna 5y ago
  Fair for whom always needs to be discussed when talking about fairness. I personally like the sales tax idea, or even a flat tax - in the sense that everyone pays the same without all the loops holes, deductions, exemptions, that exist to gain corporate favor, buy votes, or push agendas. The problem with both of those is it isn't fair for some, specifically folks in the lower income brackets.
  - annoyingnoob 5y ago
    I don't have all of the answers but our current system taxes labor at a higher rate than investments, which creates a 'trickle-up' effect because the most wealthy make most of their money from investments. Then enforcement tends to hurt the little guy more. There is not much fair about our current system, so lots of room for improvement.
  - bena 5y ago
    Sales taxes are regressive. A 10% sales tax is more of a poor person's income than a wealthy person's income. Flat tax is also funny. Because it doesn't mean getting rid of loopholes and deductions, it means taxing every dollar the same. Effectively raising the taxes on those making less. Right now we have a progressive tax rate. Where the first X dollars are taxed at A%, the next Y dollars at A+5%, and so on. Deductions would still exist because at some point someone is going to make a good point that that money was just taxed. Or that the money went to the same goal as the tax would have. Deductions are there to find out what your taxable income is. It affects how much you owe because 10% of 900 is not the same as 10% of 1000.
- Mediterraneo10 5y ago

ucha 5y ago

It's not as simple as that... The wealthy are, justly, disproportionally targeted by audits, 10x more likely to be audited if you make more than $10m vs less than $100k. Vast ressources will not necessarily prevent you from being convicted of tax evasion cf. Charles Kushner who evaded low 5 figures in taxes while being a centimillionaire.

dubcanada 5y ago
Do you have any proof to back up that "the rich are 10x more likely to be audited"? Not trying to call you out but I'd like to read it, that number seems extremely far fetched. My guess is everyone has a small percent chance to get audited every year (unless they find a obvious issue) and it's just a flip of a coin. I imagine they have some kind of algorithm or MI to assist in finding discrepancies based on historical wins/loses. I doubt it's as simple as I made 10 million, therefore I am going to get audited eventually.
- 8fGTBjZxBcHq 5y ago
  It's actually the opposite as far as I know. There have been several well-researched articles in the last few years about this. The automated flagging they use is tuned to find the common mundane violations, which tend to be by normal people with normal resources. The tax strategies of the extremely wealthy are a good deal more sophisticated and don't lend themselves well to automated checks like these.
- ucha 5y ago
  People who declare (or don't declare) $0 income and high income tax payers are disproportionally likely to be audited. And if you make $10mm+ for a number of year, you're almost certainly going to be audited and anecdotally, that has been what I've seen. https://taxfoundation.org/irs-audited-12-million-households-2015/ https://taxfoundation.org/irs-audited-12-million-households-...
dragonwriter 5y ago
> The wealthy are, justly, disproportionally targeted by audits, Nope, they, unjustly, are not: https://www.propublica.org/article/irs-now-audits-poor-americans-at-about-the-same-rate-as-the-top-1-percent https://www.propublica.org/article/irs-now-audits-poor-ameri...