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Good. This should come with the caveat that they are going after ultra-high net worth individuals. An agent spending a day going through the returns of some ra

Good. This should come with the caveat that they are going after ultra-high net worth individuals. An agent spending a day going through the returns of some random person who makes 40-60k to see that their return was off by $30 is an absolute waste of time and resources. The IRS needs to fry the biggest fish for a change, instead of ignoring them or being too scared to face a well-funded legal team.

LanceH 4y ago
The ultra-rich are largely law-abiding and have the paperwork to prove it. What should be concerning is the new reporting requirements on virtually any $600 transaction combined with 30k more IRS staff.
- mikeyouse 4y ago
  People have a really simplistic view of what wealthy "compliant" tax returns look like. There is a massive amount of tax fraud at the wealthiest levels -- but since the IRS rarely prosecutes, people just assume the returns are merely avoidance instead of evasion. Look at what's come out from Trump's historical tax returns -- literally tens (if not hundreds?) of millions of dollars in tax fraud that was just never prosecuted. Had the authorities looked before the statute of limitations had elapsed, there would have likely been criminal charges. https://www.nytimes.com/interactive/2018/10/02/us/politics/donald-trump-tax-schemes-fred-trump.html https://www.nytimes.com/interactive/2018/10/02/us/politics/d... https://www.propublica.org/article/trump-inc-podcast-never-before-seen-trump-tax-documents-show-major-inconsistencies https://www.propublica.org/article/trump-inc-podcast-never-b... This isn't "some people say" territory - it's just blatant fraud that went unprosecuted and it happens all the time.
  - themagician 4y ago
    The IRS rarely prosecutes high earners because it's expensive and it's possible they fail. Once you get out of simple W2 and 1099 income things get real complicated real fast. So complicated the IRS can get it wrong themselves. The more complicated the return, the more subjective they become. When the rules are so complex or the terms so vague that things can be left up to interpretation or they do not capture all edge cases it becomes very easy to end up in a scenario where you have to prove intent to commit fraud if you really want to prosecute. There is no doubt that the IRS leaves plenty of money on the table by not pursuing more high earners, but who wants to do the hard work when the easy work is just to compare reported W2 and 1099 income statements with returns? If we wanted to get serious about going after high earners we would simplify the tax code. We'd get rid of certain carry overs all together. At some point we may even tax revenue instead of profits. That might sound wildly "anti-capitalist" but it's the only way to eliminate the ambiguity. We could create different incentives that reverse the burden. I can think of a funny example I saw the other day where some dope was telling people they can deduct their dog as a business expense if they work from home because the dog is a "guard dog". The thing is you actually can do this. If you do this with any old dog it obviously would not hold up… but where is the line? How much training does a dog need to be considered a guard dog? How many hours a day is the dog actually guarding? You going to interview the dog? What if the dog dies or runs away? The IRS is not going to scrutinize every dog. There are a ridiculous amount of things just like this that people write off as expenses. If you want to successfully prosecute you've got to really make the case that it was intentional—like that there was no dog at all. Otherwise it's just difficult, and there's so much lower hanging fruit. You want to go back and forth over a dog with or just go after this person who failed to report a PayPal transaction? The latter is so much easier. Guaranteed win.
    - chii 4y ago
      > you've got to really make the case that it was intentional—like that there was no dog at all which would be easy, as an animal ought to have been registered and thus have a registration from which an easy check should've been possible. If the tax code deems that expenses such as a guard dog is something that can be deducted, then why is the nuance relevant at all? It's a dog, and it does guarding duties during business hours. Whether it performed the guarding duties well or not is also irrelevant - the expense of a dog would be the same whether they do guarding well, or sloppily. So the only opportunity for such fraud is if the dog didn't exist, and thus you're not really paying the expenses associated with said dog. I fail to see why having a dog and being able to expense it from your income is such a big deal. Edit: in fact, i personally would like to see the tax code simplified, so that each human can claim _all_ expenses for living, from their income, and only ever get taxed on profits (which is money they did not consume).
- EMM_386 4y ago
  > The ultra-rich are largely law-abiding and have the paperwork to prove it. Oh really? "Credit Suisse, the collapsed Swiss bank taken over by UBS Group in a hastily arranged bailout earlier this month, may bring with it a fresh set of regulatory and legal problems for its new owner. For years, the bank has provided a safe haven for wealthy American clients to hide assets from the IRS — even after it was caught and prosecuted for doing the same thing more than a decade ago" Many will take whatever opportunity they can get. Whether its complex offshore structures or moving it to banks that will greet you with a wink and a nod. As long as it doesn't go to the IRS. I'm not saying all wealthy individuals do this, or even most. But the amount of money that is intentionally hidden from the IRS is incredibly substantial. They have done the studies.
- jltsiren 4y ago
  "Law-abiding" is not a binary concept. There are some activities that clearly abide by the law, and there are some activities that clearly break the law. But there is also a wide gray between the extremes, where it can be difficult to determine what the law actually is without going to court. The best practices for tax planning deliberately go into the gray area, because there is money to be made in the expected case. Even if you are audited and found breaking the law, the consequences are rarely that severe. But the same reasons that make going into the gray zone profitable in tax planning also make it profitable to audit people who practice tax planning.
- pastor_bob 4y ago
  >The ultra-rich are largely law-abiding and have the paperwork to prove it. Just because they have receipts of their expensed 'business' dinners and 'client' trips to Disney World doesn't mean they're not fraudulent
- NickC25 4y ago
  They are "largely law-abiding" because collectively, they've bought the ability to call their actions law-abiding. Warren Buffet pays a smaller % of his income in tax than he secretary does, and he's said that himself. You know how that's possible? Because Buffet and people like him bought off the government ages ago and, collectively, said to the IRS "we're going to tell you what we are going to pay, and you're going to deal with it, OK?", and continually lobby congress and say that whatever minuscule amount they actually do pay is WAY too high and needs to be cut, and cut again.
  - amanaplanacanal 4y ago
    His income is probably mostly capital gains, which are taxed at a lower rate than earned income. There are reasons for that which economists can discuss, I have no opinion myself.
  - s1artibartfast 4y ago
    >Warren Buffet pays a smaller % of his income in tax than he secretary does, and he's said that himself You say that like it should be shocking, but I don't see why that would be the expectation. You could easily come at it from the opposite direction and wonder why Buffet pays so much more than his secretary in dollar terms, yet they get the same police, roads, schools, and public services.
    - chii 4y ago
      It's because the argument comes not from rational thought, but first from ideology - that the richer person _should_ bear a higher burden (which they do, but just not percentage wise compared to their total wealth or income). Then they find examples of such, and use it as evidence. Buffett pays less in %, because he is not earning wage labour. That's not tax fraud, nor is it illegal.
  - itsdrewmiller 4y ago
    https://en.wikipedia.org/wiki/Buffett_Rule https://en.wikipedia.org/wiki/Buffett_Rule Buffett specifically believes that this is bad and his taxes should be higher.
- andrepd 4y ago
  Even before tax evasion, the wealthiest 0.1% pay proportionally less taxes than everyone else.
  - chii 4y ago
    But they pay more taxes in absolute terms than everyone else. Why is proportional comparison relevant?
mikeyouse 4y ago
There's plenty of low-income fraud that they should be tracking down as well. A politician local to me filed for PPP loans for multiple different LLCs he managed that had no trace of employees and got like $150k from the Feds. Would love for that to be looked into, but the backlog is real.
- pwinnski 4y ago
  That's fraud, but outside the purview of the IRS. The program was administered by the SBA.
  - mikeyouse 4y ago
    It's my understanding that the IRS-CI group is investigating it; https://www.irs.gov/newsroom/irs-criminal-investigation-ci-pledges-continued-commitment-to-investigating-covid-19-fraud-as-cares-act-reaches-one-year-anniversary https://www.irs.gov/newsroom/irs-criminal-investigation-ci-p...
- toomuchtodo 4y ago
  I would strongly encourage you to report this potential fraud for investigation. It will be triaged in a timely manner. https://www.sba.gov/partners/contracting-officials/contract-administration/report-fraud-waste-abuse https://www.sba.gov/partners/contracting-officials/contract-...
ortusdux 4y ago
"The new IRS chief, a former management consultant who briefly ran the agency on an acting basis in 2013, said that he would enforce Treasury Secretary Janet Yellen's pledge to not increase historical audit rates for Americans earning under $400,000. The final 2017 audit rate for earners between $200,000 and $500,000 0.4%, far below the 2.3% for that bracket in 2010, according to IRS data."
- notch898a 4y ago
  Didn't the legislature try to introduce a bill to prevent using the new agents/funding against lower earners, and it flopped? So it turns out all along no one actually wants to keep anyone accountable to such "promises." https://www.senate.gov/legislative/LIS/roll_call_votes/vote1172/vote_117_2_00296.htm https://www.senate.gov/legislative/LIS/roll_call_votes/vote1... Statement of Purpose: To prevent the use of additional Internal Revenue Service Funds from being used for audits of taxpayers with taxable incomes below $400,000 in order to protect low- and middle-income earning American taxpayers from an onslaught of audits from an army of new Internal Revenue Service auditors funded by an unprecedented, nearly $80.000.000.000, infusion of new funds. Vote Result: Amendment Rejected
  - JumpCrisscross 4y ago
    > legislature try to introduce a bill to prevent using the new agents/funding against lower earners Money is fungible. This was a messaging bill. If they were serious, they'd create an independently-funded agency within the IRS with the sole mandate of going after high earners.
    - notch898a 4y ago
      If the bill was a message, so was the response. "Fuck you, we'd rather not be hindered by such promises." ----------------------------------- RE: below [due to timeout] >The original bill already passed. factcheck: false. Original bill passed almost 12 hours later on the same day[0] [1]. The (above) amendment was voted on in the early morning, with the unamended increase passing in the afternoon. >Congress has more important things to do. factcheck: false. All 100 senators voted on the floor for a full vote on the amendment. None found they had something more important to do that would cause them not to cast a vote. >The executive has stated its position. factcheck: True. Either congress ignored the position, or they followed the privately endorsed position rather than the publicly endorsed one. [0] https://www.senate.gov/legislative/LIS/roll_call_votes/vote1172/vote_117_2_00325.htm [1] https://www.senate.gov/legislative/LIS/roll_call_votes/vote1172/vote_117_2_00296.htm
badlucklottery 4y ago
> This should come with the caveat that they are going after ultra-high net worth individuals. It sounds like that's the plan: "It also aims to help close the "tax gap" between taxes owed and those paid, estimated by Treasury at some $600 billion a year, by focusing new audits on the wealthiest Americans." Hopefully we can avoid electing clowns long enough to see this bear fruit.
CamperBob2 4y ago
This should come with the caveat that they are going after ultra-high net worth individuals. Note that pretty much everything the Biden administration has done amounts to soaking the middle class. $600 reporting threshold, anyone?
- thebradbain 4y ago
  The $600 reporting threshold has always been there (though I agree, it should be retroactively pinned to CPI from when it was introduced). Most banks through Zelle previously would automatically submit all transaction history to the IRS anyways; After all, the IRS can absolutely track how much money is entering/leaving your account on a given month, which is how they’d flag you for an audit if things don’t add up to what you reported. The only real “change” was that now Venmo/Cash App will be required to, too— and even that got delayed.
  - notch898a 4y ago
    That threshold has not always been there. Used to be 20k, but they had to lower it to catch the billionaires. https://www.wolterskluwer.com/en/expert-insights/irs-delays-implementing-the-1099-k-600-reporting-threshold-until-2023-to-the-relief-of-tax-pros https://www.wolterskluwer.com/en/expert-insights/irs-delays-...
    - lilsoso 4y ago
      Does this cover most payments over $600? They're now mostly all recorded? I don't understand the exceptions. So it applies to digital payment methods like Paypal, to payment networks like Western Union, but also to any credit card transaction over $600? edit: I think I was thinking of the payments in the wrong direction. The 1099-K applies primarily to the receiving party?
sarcasmatwork 4y ago
>Good. This should come with the caveat that they are going after ultra-high net worth individuals. If people work hard and make alot of money you want them targeted? Wow! If only I could waste billions of our taxes without accountability. Those ultra rich hire people, and have lot's of write off's and know the system. Tax code is difficult on purpose. There is a history of IRS targeting certain groups, while ignoring the others. If you think they wont target people that are helpless and can't fight you've got to wake up. Not too long ago: "Internal Revenue Service says it gave extra scrutiny to organizations with the names "Tea Party" or "Patriot" seeking tax-exempt status. No criminal charges were ever filed against IRS officials.
- Spooky23 4y ago
  No charges were filed because they didn’t commit a crime. Targeting some dopes creating a 501 as a “Tea Party” group is called targeting the low hanging fruit. So is aggressively enforcement of credits for non-custodial parents, etc. Meanwhile, those hard working ultra-rich real estate developers committing various frauds with self-dealing, fake appraisals, etc walk away with millions of dollars and pay little or nothing.
- yamtaddle 4y ago
  > If people work hard and make alot of money you want them targeted? Wow! If only I could waste billions of our taxes without accountability. No, just the "make a lot of money" part. How hard they worked doesn't matter.
- ceejayoz 4y ago
  > Not too long ago: "Internal Revenue Service says it gave extra scrutiny to organizations with the names "Tea Party" or "Patriot" seeking tax-exempt status. When they investigated, "progressive" and "occupy" (as in Occupy Wall Street) were also on the scrutiny list. They were (correctly) looking for political orgs masquerading as "social welfare" orgs to avoid disclosing donors. (Also on the list of terms: "open source software", "medical marijuana", etc.) https://web.archive.org/web/20131207123209/https://www.bloomberg.com/news/2013-06-24/irs-screened-applications-using-progressive-israel-.html https://web.archive.org/web/20131207123209/https://www.bloom...
galkk 4y ago
They should go for everyone, ranked by income. One year I got a paper mail from IRS where they said that there were potentially unpaid taxes, but it could be that you haven't filed Schedule D form for RSU. I was very pleased with it - it clearly stated what I didn't do, what I should do (file needed forms), how to contact etc. I updated everything providing what was needed and sent it, everything was ok. Comparing to the messy interactions with tax guys that I had long time ago in my former home country (with hints of needs of bribes), when I was leaving it, I'll rather have to deal with IRS any day.
- 2OEH8eoCRo0 4y ago
  > They should go for everyone, ranked by income. The IRS is about to have the world's largest Kanban board.
- swsdsailor 4y ago
  Oh they will. And when they do, all you can do is pay whatever amount they decide. Ask me how I know.
CrunchyJams 4y ago
I know this sounds crazy, but how about we apply the law equally to everyone? I have a difficult time seeing how targeting or generalizing any group of people rather than individual likelihood of tax evasion is an appropriate application of resources.
- sebzim4500 4y ago
  Currently they prioritize going after people on low to middle income, so if there is additional funding it should go towards the people currently being ignored.
  - s1artibartfast 4y ago
    you see that claim, but the caviat is that many of the types of fruad/errors made by low to middle income are easily detected. You can easily run a program to detect people claiming the same dependents.
    - yamtaddle 4y ago
      Yeah, last time this topic came up, I seem to recall that it turned out the vast majority of "audits" claimed to be targeted at the lower-classes were automated, mostly intended to catch common "whoopsies", and usually resulted in a pretty chill "yo, we think you owe X for reason Y, send us a check if you agree, or else perform the following steps to dispute" letters, not, like, thugs knocking down someone's door and demanding to comb through all their records from the last seven years. ... while audits for rich folks required heavy human involvement right from the beginning, so of course the numbers are skewed such that it looks like they are targeting the middle and lower classes, if you treat both types of audit as identical.
      - chii 4y ago
        Plus audits on rich folks who tend to employ tax lawyers and specialists would usually not deliberately commit fraud, but use unintended "loopholes" which would require some sort of tribunal to decide legality (such as a court or something). These sorts of audits may or may not return any extra revenue. The highest likelihood of tax fraud are people who commit small fraud that, to them, seem undetectable.
slackfan 4y ago
Ahaha, your naivete is so cute.
s1artibartfast 4y ago
To the contrary, I think they should spend their time there is the best return on investment. The number one priority of the IRS I should be recovering funds, not ideological Warfare. Recovering funds should not be political, and to make it so is a race to the bottom. Once you start targeting specific groups, you normalize all kinds of bad behavior.
- NickC25 4y ago
  >To the contrary, I think they should spend their time there is the best return on investment. That would mean that lower-income people would be investigated much more frequently than a multi-billionaire. Which is currently the case - harassing a lower-income family over a $500 or $1k difference is an open-and-shut case, the lowest of the lowest hanging fruit. Going after a billionaire is much harder, more time consuming, and definitely costly, even if the potential payout is orders of magnitude higher.
  - s1artibartfast 4y ago
    yes, this is what I am proposing. If the IRS can catch 100 X $1K errors in an hour, they should do this instead of spending 100 hours to catch a 10k error. That is to say, the top priority should be getting the most money back for the tax payer, and Not fighting a culture war that assumes poor = good person and rich = bad person.
tananaev 4y ago
There has to be random enforcement across the board. If people with lower incomes know they are never audited, it will encourage more people to under-report more. Obviously each individual audit won't be financially profitable for IRS, but the fact that it is enforced will send a message to millions of people that under-reporting a few hundred bucks is not worth it and it's better to pay the taxes on it.
madengr 4y ago
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deleted 4y ago
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ozarker 4y ago
Do they need 30k people to do that? No, of course not.
timbo1642 4y ago
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LanceH 4y ago

The ultra-rich are largely law-abiding and have the paperwork to prove it. What should be concerning is the new reporting requirements on virtually any $600 transaction combined with 30k more IRS staff.

mikeyouse 4y ago
People have a really simplistic view of what wealthy "compliant" tax returns look like. There is a massive amount of tax fraud at the wealthiest levels -- but since the IRS rarely prosecutes, people just assume the returns are merely avoidance instead of evasion. Look at what's come out from Trump's historical tax returns -- literally tens (if not hundreds?) of millions of dollars in tax fraud that was just never prosecuted. Had the authorities looked before the statute of limitations had elapsed, there would have likely been criminal charges. https://www.nytimes.com/interactive/2018/10/02/us/politics/donald-trump-tax-schemes-fred-trump.html https://www.nytimes.com/interactive/2018/10/02/us/politics/d... https://www.propublica.org/article/trump-inc-podcast-never-before-seen-trump-tax-documents-show-major-inconsistencies https://www.propublica.org/article/trump-inc-podcast-never-b... This isn't "some people say" territory - it's just blatant fraud that went unprosecuted and it happens all the time.
- themagician 4y ago
  The IRS rarely prosecutes high earners because it's expensive and it's possible they fail. Once you get out of simple W2 and 1099 income things get real complicated real fast. So complicated the IRS can get it wrong themselves. The more complicated the return, the more subjective they become. When the rules are so complex or the terms so vague that things can be left up to interpretation or they do not capture all edge cases it becomes very easy to end up in a scenario where you have to prove intent to commit fraud if you really want to prosecute. There is no doubt that the IRS leaves plenty of money on the table by not pursuing more high earners, but who wants to do the hard work when the easy work is just to compare reported W2 and 1099 income statements with returns? If we wanted to get serious about going after high earners we would simplify the tax code. We'd get rid of certain carry overs all together. At some point we may even tax revenue instead of profits. That might sound wildly "anti-capitalist" but it's the only way to eliminate the ambiguity. We could create different incentives that reverse the burden. I can think of a funny example I saw the other day where some dope was telling people they can deduct their dog as a business expense if they work from home because the dog is a "guard dog". The thing is you actually can do this. If you do this with any old dog it obviously would not hold up… but where is the line? How much training does a dog need to be considered a guard dog? How many hours a day is the dog actually guarding? You going to interview the dog? What if the dog dies or runs away? The IRS is not going to scrutinize every dog. There are a ridiculous amount of things just like this that people write off as expenses. If you want to successfully prosecute you've got to really make the case that it was intentional—like that there was no dog at all. Otherwise it's just difficult, and there's so much lower hanging fruit. You want to go back and forth over a dog with or just go after this person who failed to report a PayPal transaction? The latter is so much easier. Guaranteed win.
  - chii 4y ago
    > you've got to really make the case that it was intentional—like that there was no dog at all which would be easy, as an animal ought to have been registered and thus have a registration from which an easy check should've been possible. If the tax code deems that expenses such as a guard dog is something that can be deducted, then why is the nuance relevant at all? It's a dog, and it does guarding duties during business hours. Whether it performed the guarding duties well or not is also irrelevant - the expense of a dog would be the same whether they do guarding well, or sloppily. So the only opportunity for such fraud is if the dog didn't exist, and thus you're not really paying the expenses associated with said dog. I fail to see why having a dog and being able to expense it from your income is such a big deal. Edit: in fact, i personally would like to see the tax code simplified, so that each human can claim _all_ expenses for living, from their income, and only ever get taxed on profits (which is money they did not consume).
EMM_386 4y ago
> The ultra-rich are largely law-abiding and have the paperwork to prove it. Oh really? "Credit Suisse, the collapsed Swiss bank taken over by UBS Group in a hastily arranged bailout earlier this month, may bring with it a fresh set of regulatory and legal problems for its new owner. For years, the bank has provided a safe haven for wealthy American clients to hide assets from the IRS — even after it was caught and prosecuted for doing the same thing more than a decade ago" Many will take whatever opportunity they can get. Whether its complex offshore structures or moving it to banks that will greet you with a wink and a nod. As long as it doesn't go to the IRS. I'm not saying all wealthy individuals do this, or even most. But the amount of money that is intentionally hidden from the IRS is incredibly substantial. They have done the studies.
jltsiren 4y ago
"Law-abiding" is not a binary concept. There are some activities that clearly abide by the law, and there are some activities that clearly break the law. But there is also a wide gray between the extremes, where it can be difficult to determine what the law actually is without going to court. The best practices for tax planning deliberately go into the gray area, because there is money to be made in the expected case. Even if you are audited and found breaking the law, the consequences are rarely that severe. But the same reasons that make going into the gray zone profitable in tax planning also make it profitable to audit people who practice tax planning.
pastor_bob 4y ago
>The ultra-rich are largely law-abiding and have the paperwork to prove it. Just because they have receipts of their expensed 'business' dinners and 'client' trips to Disney World doesn't mean they're not fraudulent
NickC25 4y ago
They are "largely law-abiding" because collectively, they've bought the ability to call their actions law-abiding. Warren Buffet pays a smaller % of his income in tax than he secretary does, and he's said that himself. You know how that's possible? Because Buffet and people like him bought off the government ages ago and, collectively, said to the IRS "we're going to tell you what we are going to pay, and you're going to deal with it, OK?", and continually lobby congress and say that whatever minuscule amount they actually do pay is WAY too high and needs to be cut, and cut again.
- amanaplanacanal 4y ago
  His income is probably mostly capital gains, which are taxed at a lower rate than earned income. There are reasons for that which economists can discuss, I have no opinion myself.
- s1artibartfast 4y ago
  >Warren Buffet pays a smaller % of his income in tax than he secretary does, and he's said that himself You say that like it should be shocking, but I don't see why that would be the expectation. You could easily come at it from the opposite direction and wonder why Buffet pays so much more than his secretary in dollar terms, yet they get the same police, roads, schools, and public services.
  - chii 4y ago
    It's because the argument comes not from rational thought, but first from ideology - that the richer person _should_ bear a higher burden (which they do, but just not percentage wise compared to their total wealth or income). Then they find examples of such, and use it as evidence. Buffett pays less in %, because he is not earning wage labour. That's not tax fraud, nor is it illegal.
- itsdrewmiller 4y ago
  https://en.wikipedia.org/wiki/Buffett_Rule https://en.wikipedia.org/wiki/Buffett_Rule Buffett specifically believes that this is bad and his taxes should be higher.
andrepd 4y ago
Even before tax evasion, the wealthiest 0.1% pay proportionally less taxes than everyone else.
- chii 4y ago
  But they pay more taxes in absolute terms than everyone else. Why is proportional comparison relevant?

mikeyouse 4y ago

There's plenty of low-income fraud that they should be tracking down as well. A politician local to me filed for PPP loans for multiple different LLCs he managed that had no trace of employees and got like $150k from the Feds. Would love for that to be looked into, but the backlog is real.

pwinnski 4y ago
That's fraud, but outside the purview of the IRS. The program was administered by the SBA.
- mikeyouse 4y ago
  It's my understanding that the IRS-CI group is investigating it; https://www.irs.gov/newsroom/irs-criminal-investigation-ci-pledges-continued-commitment-to-investigating-covid-19-fraud-as-cares-act-reaches-one-year-anniversary https://www.irs.gov/newsroom/irs-criminal-investigation-ci-p...
toomuchtodo 4y ago
I would strongly encourage you to report this potential fraud for investigation. It will be triaged in a timely manner. https://www.sba.gov/partners/contracting-officials/contract-administration/report-fraud-waste-abuse https://www.sba.gov/partners/contracting-officials/contract-...

ortusdux 4y ago

"The new IRS chief, a former management consultant who briefly ran the agency on an acting basis in 2013, said that he would enforce Treasury Secretary Janet Yellen's pledge to not increase historical audit rates for Americans earning under $400,000. The final 2017 audit rate for earners between $200,000 and $500,000 0.4%, far below the 2.3% for that bracket in 2010, according to IRS data."

notch898a 4y ago
Didn't the legislature try to introduce a bill to prevent using the new agents/funding against lower earners, and it flopped? So it turns out all along no one actually wants to keep anyone accountable to such "promises." https://www.senate.gov/legislative/LIS/roll_call_votes/vote1172/vote_117_2_00296.htm https://www.senate.gov/legislative/LIS/roll_call_votes/vote1... Statement of Purpose: To prevent the use of additional Internal Revenue Service Funds from being used for audits of taxpayers with taxable incomes below $400,000 in order to protect low- and middle-income earning American taxpayers from an onslaught of audits from an army of new Internal Revenue Service auditors funded by an unprecedented, nearly $80.000.000.000, infusion of new funds. Vote Result: Amendment Rejected
- JumpCrisscross 4y ago
  > legislature try to introduce a bill to prevent using the new agents/funding against lower earners Money is fungible. This was a messaging bill. If they were serious, they'd create an independently-funded agency within the IRS with the sole mandate of going after high earners.
  - notch898a 4y ago
    If the bill was a message, so was the response. "Fuck you, we'd rather not be hindered by such promises." ----------------------------------- RE: below [due to timeout] >The original bill already passed. factcheck: false. Original bill passed almost 12 hours later on the same day[0] [1]. The (above) amendment was voted on in the early morning, with the unamended increase passing in the afternoon. >Congress has more important things to do. factcheck: false. All 100 senators voted on the floor for a full vote on the amendment. None found they had something more important to do that would cause them not to cast a vote. >The executive has stated its position. factcheck: True. Either congress ignored the position, or they followed the privately endorsed position rather than the publicly endorsed one. [0] https://www.senate.gov/legislative/LIS/roll_call_votes/vote1172/vote_117_2_00325.htm [1] https://www.senate.gov/legislative/LIS/roll_call_votes/vote1172/vote_117_2_00296.htm

badlucklottery 4y ago

> This should come with the caveat that they are going after ultra-high net worth individuals. It sounds like that's the plan: "It also aims to help close the "tax gap" between taxes owed and those paid, estimated by Treasury at some $600 billion a year, by focusing new audits on the wealthiest Americans." Hopefully we can avoid electing clowns long enough to see this bear fruit.

CamperBob2 4y ago

This should come with the caveat that they are going after ultra-high net worth individuals. Note that pretty much everything the Biden administration has done amounts to soaking the middle class. $600 reporting threshold, anyone?

thebradbain 4y ago
The $600 reporting threshold has always been there (though I agree, it should be retroactively pinned to CPI from when it was introduced). Most banks through Zelle previously would automatically submit all transaction history to the IRS anyways; After all, the IRS can absolutely track how much money is entering/leaving your account on a given month, which is how they’d flag you for an audit if things don’t add up to what you reported. The only real “change” was that now Venmo/Cash App will be required to, too— and even that got delayed.
- notch898a 4y ago
  That threshold has not always been there. Used to be 20k, but they had to lower it to catch the billionaires. https://www.wolterskluwer.com/en/expert-insights/irs-delays-implementing-the-1099-k-600-reporting-threshold-until-2023-to-the-relief-of-tax-pros https://www.wolterskluwer.com/en/expert-insights/irs-delays-...
  - lilsoso 4y ago
    Does this cover most payments over $600? They're now mostly all recorded? I don't understand the exceptions. So it applies to digital payment methods like Paypal, to payment networks like Western Union, but also to any credit card transaction over $600? edit: I think I was thinking of the payments in the wrong direction. The 1099-K applies primarily to the receiving party?

sarcasmatwork 4y ago

>Good. This should come with the caveat that they are going after ultra-high net worth individuals. If people work hard and make alot of money you want them targeted? Wow! If only I could waste billions of our taxes without accountability. Those ultra rich hire people, and have lot's of write off's and know the system. Tax code is difficult on purpose. There is a history of IRS targeting certain groups, while ignoring the others. If you think they wont target people that are helpless and can't fight you've got to wake up. Not too long ago: "Internal Revenue Service says it gave extra scrutiny to organizations with the names "Tea Party" or "Patriot" seeking tax-exempt status. No criminal charges were ever filed against IRS officials.

Spooky23 4y ago
No charges were filed because they didn’t commit a crime. Targeting some dopes creating a 501 as a “Tea Party” group is called targeting the low hanging fruit. So is aggressively enforcement of credits for non-custodial parents, etc. Meanwhile, those hard working ultra-rich real estate developers committing various frauds with self-dealing, fake appraisals, etc walk away with millions of dollars and pay little or nothing.
yamtaddle 4y ago
> If people work hard and make alot of money you want them targeted? Wow! If only I could waste billions of our taxes without accountability. No, just the "make a lot of money" part. How hard they worked doesn't matter.
ceejayoz 4y ago
> Not too long ago: "Internal Revenue Service says it gave extra scrutiny to organizations with the names "Tea Party" or "Patriot" seeking tax-exempt status. When they investigated, "progressive" and "occupy" (as in Occupy Wall Street) were also on the scrutiny list. They were (correctly) looking for political orgs masquerading as "social welfare" orgs to avoid disclosing donors. (Also on the list of terms: "open source software", "medical marijuana", etc.) https://web.archive.org/web/20131207123209/https://www.bloomberg.com/news/2013-06-24/irs-screened-applications-using-progressive-israel-.html https://web.archive.org/web/20131207123209/https://www.bloom...

galkk 4y ago

They should go for everyone, ranked by income. One year I got a paper mail from IRS where they said that there were potentially unpaid taxes, but it could be that you haven't filed Schedule D form for RSU. I was very pleased with it - it clearly stated what I didn't do, what I should do (file needed forms), how to contact etc. I updated everything providing what was needed and sent it, everything was ok. Comparing to the messy interactions with tax guys that I had long time ago in my former home country (with hints of needs of bribes), when I was leaving it, I'll rather have to deal with IRS any day.

2OEH8eoCRo0 4y ago
> They should go for everyone, ranked by income. The IRS is about to have the world's largest Kanban board.
swsdsailor 4y ago
Oh they will. And when they do, all you can do is pay whatever amount they decide. Ask me how I know.

CrunchyJams 4y ago

I know this sounds crazy, but how about we apply the law equally to everyone? I have a difficult time seeing how targeting or generalizing any group of people rather than individual likelihood of tax evasion is an appropriate application of resources.

sebzim4500 4y ago
Currently they prioritize going after people on low to middle income, so if there is additional funding it should go towards the people currently being ignored.
- s1artibartfast 4y ago
  you see that claim, but the caviat is that many of the types of fruad/errors made by low to middle income are easily detected. You can easily run a program to detect people claiming the same dependents.
  - yamtaddle 4y ago
    Yeah, last time this topic came up, I seem to recall that it turned out the vast majority of "audits" claimed to be targeted at the lower-classes were automated, mostly intended to catch common "whoopsies", and usually resulted in a pretty chill "yo, we think you owe X for reason Y, send us a check if you agree, or else perform the following steps to dispute" letters, not, like, thugs knocking down someone's door and demanding to comb through all their records from the last seven years. ... while audits for rich folks required heavy human involvement right from the beginning, so of course the numbers are skewed such that it looks like they are targeting the middle and lower classes, if you treat both types of audit as identical.
    - chii 4y ago
      Plus audits on rich folks who tend to employ tax lawyers and specialists would usually not deliberately commit fraud, but use unintended "loopholes" which would require some sort of tribunal to decide legality (such as a court or something). These sorts of audits may or may not return any extra revenue. The highest likelihood of tax fraud are people who commit small fraud that, to them, seem undetectable.

slackfan 4y ago

Ahaha, your naivete is so cute.

s1artibartfast 4y ago

To the contrary, I think they should spend their time there is the best return on investment. The number one priority of the IRS I should be recovering funds, not ideological Warfare. Recovering funds should not be political, and to make it so is a race to the bottom. Once you start targeting specific groups, you normalize all kinds of bad behavior.

NickC25 4y ago
>To the contrary, I think they should spend their time there is the best return on investment. That would mean that lower-income people would be investigated much more frequently than a multi-billionaire. Which is currently the case - harassing a lower-income family over a $500 or $1k difference is an open-and-shut case, the lowest of the lowest hanging fruit. Going after a billionaire is much harder, more time consuming, and definitely costly, even if the potential payout is orders of magnitude higher.
- s1artibartfast 4y ago
  yes, this is what I am proposing. If the IRS can catch 100 X $1K errors in an hour, they should do this instead of spending 100 hours to catch a 10k error. That is to say, the top priority should be getting the most money back for the tax payer, and Not fighting a culture war that assumes poor = good person and rich = bad person.

tananaev 4y ago

There has to be random enforcement across the board. If people with lower incomes know they are never audited, it will encourage more people to under-report more. Obviously each individual audit won't be financially profitable for IRS, but the fact that it is enforced will send a message to millions of people that under-reporting a few hundred bucks is not worth it and it's better to pay the taxes on it.

madengr 4y ago

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deleted 4y ago

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ozarker 4y ago

Do they need 30k people to do that? No, of course not.

timbo1642 4y ago

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