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While watching the Ed Show's segment on "The Austerity Trap"from 30.01.2013, there was a brief mention of how the US could be on its way to imitating the problems in the Greek economy.  While most of the focus was on one aspect, the austerity measures, another important item was mentioned: the fact that the Greek government does not collect much of the monies owed to it because people cheat on their taxes.  Then the fact that cuts have been made to our IRS have hampered its ability to collect the monies owed:

From the National Taxpayer Advocate

The IRS budget has been reduced in each of the last two fiscal years, and appears likely to face further cuts in coming years. Although these cuts reflect across-the-board reductions in federal discretionary spending, underfunding the IRS makes no sense, Olson said. “The IRS is materially different from other discretionary programs in that it serves as the de facto Accounts Receivable Department of the federal government. Each dollar appropriated for the IRS generates substantially more than one dollar in additional revenue. It is therefore ironic and counterproductive that concerns about the deficit are leading to cuts in the IRS budget, when those cuts are making the deficit larger.”

How much has funding fallen?  It's substantial.  From Accounting Today (April 2012)

However, the long-term trend has been discouraging, Kelley said, noting that in 1995 the IRS had a staff of 112,024 to administer the tax laws and process 205 million tax returns. Today (2012), she said, the IRS staff is about 91,000 and must process more than 236 million much more complex tax returns.

And the Congress continues to slash at the IRS.  Again, from the National Taxpayer Advocate:

IRS Funding Decisions Fail to Take Into Account “Return on Investment.” On a budget of $11.8 billion, the IRS collected $2.52 trillion in FY 2012. That translates to an average return-on-investment (ROI) of about 214:1. Yet the appropriations process treats the IRS like any other discretionary spending program, with no explicit recognition that each dollar appropriated for the IRS generates substantially more than one dollar in additional revenue. Last year, the IRS Commissioner estimated in a letter to Congress that proposed reductions in the IRS budget would cause tax collections to fall seven times as much.

“No business would fail to fund a unit that, on average, brought in $7 for every dollar spent. Shareholders would rebel and bring lawsuits, or at least oust the management or board of directors,” Olson wrote in her preface to the report. “Yet this is precisely what we are doing with the IRS budget.”
No one likes paying taxes.  The weekends in my household dedicated to filling out tax returns are tense.  I admit that if I were living in a Harry Potter book, my boggart would have the shape of a tax auditor.   Yet I also realize how necessary it is.  In fact, I have less problem with paying taxes than filling out the tax forms,

If we don't fund the IRS, filing becomes even more difficult.  People who deserve money back may not get it.  Those who should be audited - including major corporations - are not, or are audited weakly.  Money is wasted.  It goes down the drain.

I don't expect this to be the most popular issue, but it is a necessary one.  One that makes good business sense for the country.

Rec list!  Thanks. I hope is that it shines some light on the subject.  I don't pretend to have all the answers - maybe none of them - and I probably don't even have all the questions.  

Tired of politics?  Need to escape?  Try my Greek mythology based novels, either the story of Oedipus from the point of view of Jocasta, or a trilogy about Niobe, whose children were murdered by the gods - or were they?

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Comment Preferences

  •  Agreed 100%. (20+ / 0-)

    British guy with a big interest in US politics; -1.88, -4.05. A liberal, a moderate and a conservative walk into a bar. The bartender says "Hey Mitt".

    by General Goose on Thu Jan 31, 2013 at 03:10:13 AM PST

  •  If the IRS were an organization with (4+ / 0-)
    Recommended by:
    Contra, rolet, caul, Roger Fox

    a reputation for excellence maybe I'd agree. But their reputation is one of poor judgment and case after case of overreach. Michele Bachmann was able to serve as an IRS agent for years; does that not tell us something?

    •  and who sets that (29+ / 0-)

      And who sets that reputation?

      The IRS, like the rest of the government, has been controlled by Republicans as often as it's controlled by Democrats.  There's a bit of organizational schizophrenia that results from priorities shifting every 4 to 8 years.

      But the IRS employees I've known are dedicated to fairness and efficiency and purity of numbers.

      They know they're hated.  And the Republicans demonize them at every turn.

      But in order to have a functioning democracy, you need the rules to be fair, and to be fairly enforced.  If your financial policing system is underfunded you will have spotty enforcement of the rules, and there is a strong temptation to make examples of cases you can prove, in order to 'deter' others.  

      Blanket enforcement and situational leniency when it is warrented works a heck of a lot better and it's more just, but it requires more upfront investment.  Which the IRS isn't getting, because of that reputation.

      •  And of course... (0+ / 0-)

        They are understaffed, hated for their very purpose and purposely sabotaged by the very people (congress) who are supposed to be ensuring their success.

        I am in favor of a flat tax of 35% for everyone on all earnings with no deductions except three...  

        1.) The poverty level for your specific region. (full single poverty level deduction for each spouse and half poverty level for each dependent child)
        2.) Taxes directly paid to state and local government.
        3.) Business expenses such as: Wages and investments in research, required business equipment/propert/raw materials and advertising.

         This will include social security and medicare within the 35%.

        Tax code could be narrowed down to a three page handout written in eigth grade reading level with large print.  GE could fill out their taxes on turbo tax (and a turbo scanner for the half a billion receipts).

        When Republicans want to broaden the tax base, the only way to do it would be to raise the minimum wage to a livable wage. Then they would be tax payers as well.

        "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

        by Buckeye Nut Schell on Thu Jan 31, 2013 at 07:18:58 AM PST

        [ Parent ]

        •  That'd be like the Wild Wild West. (6+ / 0-)

          Huge sections of the code define income and attempt to force current recognition of assets over which there's some sort of constructive receipt or effective control).  Get rid of those swaths of the code and people would game the hell out of the system.

          Which is to say: a simple tax is an easy one to avoid.

          •  The more people understand the vagaries (4+ / 0-)

            of the tax code, the more they realize the necessity of such a long code. We already have the 1040EZ for individuals or families with simple line items. But GE? An int'l business that is both a manufacturer and a financial services firm? How could someone even think that a simple few pieces of paper could clear up any and all ambiguities?

            •  For example, depreciation deductions. (1+ / 0-)
              Recommended by:

              Link.  They're a real plus for businesses that want to expand.

              Any jackass can kick down a barn, but it takes a good carpenter to build one.--Sam Rayburn

              by Ice Blue on Thu Jan 31, 2013 at 08:49:11 AM PST

              [ Parent ]

              •  I understand the intent of this but... (0+ / 0-)

                Again, we are using tax payer dollers to subsidize business growth.  The entire purchase cost is deducted from their initial purchase in the cost of doing business and then we allow them to deduct the wear on the asset as well.

                If a company wants a machine, there must be a financial incentive to have it already.  The are going to increase capacity, reduce labor, improve quality, provide a new feature or something.  If it makes economic sense, they will do it.  The depreciation of the asset is an added bonus.  

                It does create an incentive to buy something new as opposed to refurbishing something old but that is like robbing Peter to pay Paul.  Anymore, service contracts are typically local with American workers and new equipment purchases are more likely supporting foreign employment.

                "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

                by Buckeye Nut Schell on Thu Jan 31, 2013 at 09:03:26 AM PST

                [ Parent ]

                •  If an item can be fully expensed for tax (0+ / 0-)

                  purposes there no longer is any basis with which one can take further depreciation. Not sure what you are saying about deducting both the upfront cost o the capital item in addition to ongoing deductions.

          •  I completely disagree... (0+ / 0-)

            The more complex you make something, the easier it is to cheat.

            You say:

            "Huge sections of the code define income and attempt to force current recognition of assets over which there's some sort of constructive receipt or effective control). "

            I simply state that all income is subject to taxes, period.  If you get it from work, interest, the lottery, dividends, inheritence, etc...

            Which is easier to game?

            In twenty years of writing ISO standards and standard operating procedures for companies, the secret is to understand what is critical and what is not and say it as clearly as possible with as few words as absolutely needed. (unlike my typical post).

            It is hard to find a loophole in a straight piece of string.

            "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

            by Buckeye Nut Schell on Thu Jan 31, 2013 at 08:33:11 AM PST

            [ Parent ]

            •  Sounds great. (2+ / 0-)
              Recommended by:
              RFK Lives, Roger Fox

              So I'll have a client set up an offshore corporation or mutual fund that invests and makes no distributions, and since he won't receive any income from that entity, he won't have income.  

              And that makes it easy for guys like Mitt to cut down their tax bills: the management fee would just be paid to some intermediary entity, and all their fees grow tax-deferred.  

              •  Touche... (1+ / 0-)
                Recommended by:

                You make a good point, I did not account for it and it would have to be considered.

                However, simplifying the code to extremely basic rather than complicated rules does make it more difficult to get around.

                There are 4,563 words in the US constitution and 5.6 million in the US tax code and associated regulations.  

                One of these has regulated one of the largest and most power governments in the history of the world for over two centuries with very few revisions.  

                The other is changed yearly, is completely riddled with loopholes and injustices and has lead to frequent inequalities in the distribution of wealth.

                Imagine how simple and easy to follow the bible would have been if it simply stated two rules; "Treat others as you would like to be treated" and "Love one another as I have loved you."  

                Simple is always better (as long as all contingencies are accounted for).

                "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

                by Buckeye Nut Schell on Thu Jan 31, 2013 at 11:04:42 AM PST

                [ Parent ]

        •  regressive (4+ / 0-)

          How big is your personal carbon footprint?

          by ban nock on Thu Jan 31, 2013 at 07:58:38 AM PST

          [ Parent ]

          •  How is it regressive? (0+ / 0-)

            If you make less than poverty level, you pay nothing.  

            If you make two times the poverty level, you pay 50% of 35% (17.5%) which includes your social security and your medicare which is about 10% so you total amount paid is 7.5%.

            If you make four times poverty level, you pay 75% of 35% which is 26.25% minus the 10% for payroll taxes and you pay 16.25% in taxes.

            $23,000 Income = $0.00 Taxes
            $46,000 Income = $3,450 Taxes / $4,600 social security/medicare
            $92,000 Income = $14,950 Taxes / $9,200 social security/medicare

            That sounds progressive to me.

            "Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour..."

            by Buckeye Nut Schell on Thu Jan 31, 2013 at 08:49:37 AM PST

            [ Parent ]

            •  start from existing brackets (0+ / 0-)

              and add these

              40% @2mil
              41% @ 4 mil
              42% @ 6mil
              43% @ 12mil
              44% @ 24 mil
              45% @ 48 mil

              That almost would resemble a geometric progression, no?

              FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

              by Roger Fox on Thu Jan 31, 2013 at 01:12:20 PM PST

              [ Parent ]

    •  That's the reputation among the ant-tax, (19+ / 0-)

      right wing crowd. Sure haven't seen any objective evidence supporting that. In reality,given the rate of uncollected taxes from tax cheats, it could be argued that the IRS is a bunch of marshmallow softies.

      Further, affiant sayeth not.

      by Gary Norton on Thu Jan 31, 2013 at 05:40:21 AM PST

      [ Parent ]

    •  You want to back that up with actual facts? (16+ / 0-)

      Unless you can find some actual evidence that they have poor judgement and "overreach" all the time...then it's likely that you've just been swayed by the Norquist crowd.

      Our Fair City...a campy post-apocalyptic science fiction radio epic!

      by The BBQ Chicken Madness on Thu Jan 31, 2013 at 06:18:01 AM PST

      [ Parent ]

    •  I call the IRS every time I have a tax question or (6+ / 0-)

      if I think I've messed up. They are tremendously helpful.

      How big is your personal carbon footprint?

      by ban nock on Thu Jan 31, 2013 at 07:57:49 AM PST

      [ Parent ]

    •  Auditors are pretty good at telling who's (4+ / 0-)
      Recommended by:
      Subterranean, RickD, BachFan, Creosote

      trying to cheat the government and who just made a mistake.

      My father was audited back in the '80s.  He was making good money at the time in the operations side of manufacturing.  As for finance, he was a total dolt.  He did something totally stupid like cash in an IRA without paying the penalty.  I don't doubt for a second he did it because he was too dumb to read the directions.

      When he got his scary letter from the IRS, he started shaking.  We didn't even have the stereotypical shoebox full of financial records.  Mom had to go through the whole house and hunt them down, bitching at Dad the whole time.  When he got in to see the auditor he said, "I honestly wasn't trying to cheat the government."  The auditor said, "Um, I can see that."  Then he said my father could have taken this deduction, this one and that one, and all would have been perfectly legal.  After telling Dad he'd need to pay what he legally owed plus the penalty, he said, you know, this was a fairly complex return for someone with no accounting experience.  He suggested, from then on, Dad hire an accountant.  

      Dad said afterwards his auditor was actually a very nice man.  It wasn't nearly as bad as he feared.  I think the worst part was the snickering he got from his company's CFO.

      Any jackass can kick down a barn, but it takes a good carpenter to build one.--Sam Rayburn

      by Ice Blue on Thu Jan 31, 2013 at 08:23:56 AM PST

      [ Parent ]

    •  Yeah but she was a hire during the Newt years. (1+ / 0-)
      Recommended by:

      And he directed IRS enforcement at the middle class so that no Leona Helmsley would ever be held to account again.

    •  Citing ancient history doesn't help now. (0+ / 0-)
      case after case of overreach. Michele Bachmann was able to serve as an IRS agent for years
       The IRS was smacked down for those transgressions years ago and revamped its procedures, as evidenced by the Taxpayer's Bill of Rights.

      My Karma just ran over your Dogma

      by FoundingFatherDAR on Thu Jan 31, 2013 at 11:18:02 AM PST

      [ Parent ]

  •  Wayne LaPierre says that people who (10+ / 0-)

    break the laws don't care about laws, so what's the point?


    "The object of persecution is persecution. The object of torture is torture. The object of power is power. Now do you begin to understand me?" ~Orwell, "1984"

    by Lily O Lady on Thu Jan 31, 2013 at 04:40:49 AM PST

  •  And let's not put aside the fact (9+ / 0-)

    that Congress continually screws the IRS by passing tax laws after they have set up their systems for the current tax year.  This causes massive delays in getting forms out, setting up e-file systems and delays refund payments.

    I must end each day with a dose of Top Comments. A TC diary is a must for developing the calmness I need to get the required eight hours of sleep. - cohenzee

    by cohenzee on Thu Jan 31, 2013 at 04:50:33 AM PST

  •  Someone in the Senate should take up this fight (7+ / 0-)

    I'm not familiar enough with where the areas of special knowledge are, but it would be a big help to find out. Having someone fearless as Elizabeth Warren become an active promoter of funding the IRS would make a huge difference.

    And are there any citizens' groups active in support of this?

    Thanks for your the succint and timely writeup.

  •  More IRS agents won't help (3+ / 0-)
    Recommended by:
    DRo, cotterperson, Creosote

    The system must be fixed. Mitt Romney types have armies of accountants that let them completely avoid taxes legally. The only way to fix that is progressive tax reform.

  •  Can you explain what the last (3+ / 0-)
    Recommended by:
    misslegalbeagle, johnny wurster, caul

    block quotes means in more detail?

    Because, as copied and pasted it really makes no sense.

    For example, in one place it suggests that the "return on investment" something like 214:1 and in another, about 7:1

    That's a rather large discrepancy.

    •  I believe the 214 to 1 (2+ / 0-)
      Recommended by:
      caul, Roadbed Guy

      is the overall rate, whereas the 7 to 1 is the marginal rate.

      by chloris creator on Thu Jan 31, 2013 at 06:58:14 AM PST

      [ Parent ]

    •  Two snapshots of the return on investment (4+ / 0-)

      The first number reflects the fact that the ratio of total revenue collected by the IRS to its budget of slightly less than $12 Bn. is 214:1.  That number includes all the revenue coming in through the voluntary compliance of most of the citizens of these United States.  

      The 7:1 figure is the ratio of the return on investment for each additional dollar spent on enforcement.  It is a marginal rate of return on the last dollars spent.   Similarly, the highest marginal tax rate applies only to the dollars of income that exceed the cutoff for the next lower marginal rate.   That ratio says that at the current rate of compliance, if you spend $100,000 to hire another agent to do enforcement work, the increased revenue will be roughly $700,000.  

      That 7:1 ratio does not apply out to infinite spending on enforcement, but rather follows a curve of diminishing returns.  Eventually, the ratio will approach and then go below 1:1.  In terms of pure economics, it would seem to make sense to spend money on enforcement until you start to approach the 1:1 ratio.  Figuring in the cost of compliance on tax payers and political considerations probably pushes the target ratio closer to 2:1.  Still, 7:1 seems like it is leaving a great deal of revenue on the table and facilitating unfairness.

      If we do not maintain Justice, Justice will not maintain us. -Sir Francis Bacon.

      by Res Ipsa Loquitor on Thu Jan 31, 2013 at 07:09:09 AM PST

      [ Parent ]

      •  Thanks for the explanation (1+ / 0-)
        Recommended by:
        johnny wurster

        the first number seems a tad silly - i.e., it would vary considerable just with the normal ebb and flow of the economy.

        the second one makes some sense, but is it based on the entire IRS budget, or just the amount devoted to collection of evaded taxes?   If the former, then it is not really an appropriate metric - and the 7:1 ratio might be underestimated in fact.

        But, if the 7:1 ratio is correct along with Wikipedia's estimate of about $300 billion evaded taxes, that would mean that enforcement funds would have to bumped up to over $40 billion - or about 4x the entire current IRS budget.   Fat chance that * that * is going to happen!

  •  we have a track record (7+ / 0-)

    for austerity cuts, in Europe.

    They deepen Recessions -- not end them.

    If we want to grow an Economy,

    something has to "prime the pump" of activity.

    Here's how the game is really Rigged.

    by jamess on Thu Jan 31, 2013 at 05:29:33 AM PST

  •  Don't the Rs say they want to run the goverment (9+ / 0-)

    like a business?

    Successful businesses collect what is owed to them.

    *There are two sides to every horseshit.* Kos

    by glorificus on Thu Jan 31, 2013 at 05:47:56 AM PST

    •  They only like that concept (1+ / 0-)
      Recommended by:

      because it signifies as a racial dog whistle. The alternative to something run like a business is something run like a zoo.

      Not an actual zoo, which are of course highly organized, their fantasy of a zoo which involves disorder and chaos because conservatives can't imagine anybody stupid enough to devote time to the chore of caring and feeding.

      So on the one hand you have business: organized, structured, hierarchical and you have zoo: chaotic, unpredictable, wasteful, doomed to fail. White supremacists love to depict the Other as an animal, and themselves as the benevolent masters who know the wisdom of not sparing the rod in order to save the child.

      Any time I hear someone wanting to run government like a business, it means they view a certain segment of the population as animals, and from there the implications are obvious.

  •  The US will never (3+ / 0-)
    Recommended by:
    General Goose, Gary Norton, Boppy

    become Greece, because the US, unlike Greece, has control of it's monetary policy.

    Greece's problems are exacerbated badly by the Euro.

    "A lie is not the other side of a story; it's just a lie."

    by happy camper on Thu Jan 31, 2013 at 05:53:35 AM PST

  •  I must be missing something here (0+ / 0-)

    Staff cuts from 112,000 to 91,000 - first, what about the new agents supposedly being hired because of Obamacare - the right is always crying about that. But it is important to think about the computer on your desktop in 1995 and compare it to what you have today, and ask if in a business systems environment this alone could account for the 20% decline in labor force. And the answer is , oh, hell yes. Then there is that other measure given, the cost of collections? The idea that it should remain a constant rather than declining ratio is even more Luddite dogma.

    In actuality, the US is one of the most effective tax collection regimes around. It is tax policy, not the collection regime that is in trouble. Ultimately, in a modern monetary economy, based on free floating sovereign fiat currency, taxation when applied intelligently, serves the two main purposes.

    First, taxes drive the value of money. Practically, anything for sale is up for barter if you have the desired commodity to trade, else you use the convenience of the state's money. But when you owe the state, there is no barter. You must pay with the state's money. This puts almost everyone in the bind of needing state money and makes the money valuable. How valuable depends on what one is willing to do to obtain a dollar.

    The second purpose of intelligently applied taxation is to regulate the economy. The economy has a gas pedal (spending) and a bake pedal (taxes). Types of economic activity that are socially deplored but legal can be slowed by taxation applied as a form of discouragement. In classical economics, the term "Free Market" had a totally different meaning from the perversion of today. That meaning was a market free from the ravages of parasites - the collectors of unearned economic rents - the rentiers. Here the idea was to leave the production and consumption cycle free of taxation, and collect on ground rents, natural monopolies, passive capital gains, and other unearned income streams. The way we do it now just exacerbates every economic leakage already built into the system and is literally starving the labor sector, reducing consumption, encouraging savings, and destroying aggregate demand. The result is we are hovering around deflation and until there is some major deficit spending by the government the economy will continue it decline.

    •  Even the most efficient can be improved. (3+ / 0-)
      Recommended by:
      MKinTN, caul, Creosote

      With all respect, I have to disagree with parts of this post.  First, with the implicit premise that a high level of efficiency is good enough.  This ignores the well articulated argument made above concerning fairness.  The lack of an effectively fair tax rate on those, like a recently defeated presidential candidate, who benefit most from the Government creating an environment that enables massive investment income, is one side of that fairness problem.  To be truly effective, the IRS needs the personnel to close the loopholes created by tax attorneys through the rule making process, and litigation.

      Second is the inherent unfairness that undermines confidence in Government where the lack of resources leaves pockets of nonenforcement.  We all know about huge corporations that freeload off society and pay no taxes.  There are also less monolithic pockets of tax invasion that are equally insidious.  A couple of years ago we tried to find a nanny for our child on the suburban Philly mainline.  We looked at about a dozen candidates and all were willing to work only under the table.  We even looked at a nanny share with another couple which feel through over the sticking point of paying the relevant payroll taxes and doing proper withholding.  Further inquiries suggest that virtually nobody in the western Philly suburbs who has a nanny or works as a nanny is complying with the tax obligations.  Amazingly, people are not particularly shy about revealing their participation in this culture of evasion.  

      This is an example of an environment, much like the multinational corporate environment,  where evasion becomes the accepted norm.  No matter how efficient enforcement is, improving effectiveness pays off when it shifts the norms toward compliance and increases the perception of fairness.  

      If we do not maintain Justice, Justice will not maintain us. -Sir Francis Bacon.

      by Res Ipsa Loquitor on Thu Jan 31, 2013 at 06:46:19 AM PST

      [ Parent ]

  •  It's called mathematics (4+ / 0-)
    Recommended by:
    chloris creator, Gary Norton, caul, Boppy

    I believe a former President gave a speech about that last August people found effective. Well done.

  •  And the SEC (4+ / 0-)
    Recommended by:
    chloris creator, Gary Norton, caul, Boppy

    and the ATF, etc. etc. etc.

    This is why the calls for austerity and spending cuts from the Starve the Beasters are so galling. Which of course is their main intent. No conservative may so much as lift a golf club from out of it's bag without being secure in the knowledge that somehow, somewhere a liberal is pissed off.

  •  If the IRS would start going after the big guys (4+ / 0-)

    I would agree with empowering them more.  They only seem to have an appetite for going after small guys who make small mistakes (missed 10-99's, accounting errors, etc..) They are exacting huge penalties on little people with no representation.  The big cheats suffer no or virtually no penalty. Further empowering these guys before we see them take down a true criminal is putting the cart before the horse.  Just my opinion, though.

    "Goodnight, thank you, and may your God go with you"

    by TheFern on Thu Jan 31, 2013 at 06:48:40 AM PST

    •  agreed. but they need the resources to do (3+ / 0-)
      Recommended by:
      Boppy, trumpeter, Creosote

      that, and right now they don't have them.  It was mentioned on the Ed Show segment.

      by chloris creator on Thu Jan 31, 2013 at 06:57:16 AM PST

      [ Parent ]

      •  Just Giving Resources Won't Fix The Problem (1+ / 0-)
        Recommended by:

        Unless the systems and incentives are changed, more resources just means more harvesting of the low-hanging fruit (individual taxpayer errors), not refocusing on higher-hanging fruit (byzantine multizillionaire tax shelters).

        On the Internet, nobody knows if you're a dog... but everybody knows if you're a jackass.

        by stevemb on Thu Jan 31, 2013 at 08:34:14 AM PST

        [ Parent ]

    •  Not sure if that would work (0+ / 0-)

      what the big guys do is "tax avoidance"  (which is legal! their high price lawyers and accountants make sure of that .. . .).

      what is currently collectible seems to be "evaded" taxes - for example, as documented at Wikipedia:

      A more recent study estimates the 2008 tax gap in the range of $450 to $500 billion, and unreported income to be approximately $2 trillion.[5] Thus, 18 to 19 percent of total reportable income is not properly reported to the IRS.[6]
      My guess is that if this income WAS reported, it would not be taxed at * that * high of a rate . . . . (e.g., it's paid to undocumented workers, tips to wait staff in restaurants, babysitters, etc).   However, if that were the case, virtually all of it would be subject to payroll taxes - what's 8.2% of $2 trillion?  Roughly $160 if I'm counting on my fingers correctly . .. .. (i.e., quite a bit).

      According to Wikipedia the other side of the tax evasion coin (other than not reporting income) is claiming unwarranted charitable deductions:

      The typical tax evader in the United States is a male under the age of 50 in the highest tax bracket and with a complicated return, and the most common means of tax evasion is overstatement of charitable contributions, particularly church donations.[2]
      God, the irony - did these folk learn nothing at the church in question (e.g., basic honesty, render unto Caesar what is Caesar's , etc).
    •  The little things like missed 1099's (1+ / 0-)
      Recommended by:

      take no effort to find, because of the data matching that the IRS computers do.  The IRS has beefed up reporting requirements in the past few years, such as requiring brokers to report cost basis on security transactions. That should help in reducing fraud, especially for those who report a lot of stock transactions on their tax returns.  They still need to implement matching of K-1's from partnerships and S corps, but hopefully they will have that done soon.  That's really why they need more resources.  Also, you can't discount the value of the IRS in preventing fraud and tax evasion.  If people think their returns are being scrutinized, they will be more honest.

      •  I get this. (1+ / 0-)
        Recommended by:

        The eye opener for me was when Obama was putting together his first cabinet and, lo and behold, Geithner and Daschel were tax cheats!  It makes one wonder how many there are.  Meanwhile I'm watching 21 year old kids just get destroyed by the IRS for not paying self-employment taxes on a 2000 dollar 10-99.  They get a tax lien and marred credit.  Geithner?  The press absolved him of wrongdoing citing how difficult it is to correctly file his taxes because he earned income overseas.  Daschel didn't realize gifts were income.  They never would have gotten caught if not for congressional inquiry.  You know, two tiered justice.  I really don't believe in this lack of resourses bit.  They have no appetite for going after influencial people.

        "Goodnight, thank you, and may your God go with you"

        by TheFern on Thu Jan 31, 2013 at 03:57:05 PM PST

        [ Parent ]

        •  I agree with you completely. (1+ / 0-)
          Recommended by:

          The IRS has been getting really hardnosed about penalties, especially for the little guy.  In the meantime, people who owe thousands and thousands of dollars in tax get it bargained down through offers in compromise.  

  •  I think we also need to change the way paying tax (4+ / 0-)
    Recommended by:
    chloris creator, caul, Boppy, trumpeter

    is perceived. I pay less in taxes than prescription drugs and I don't think the US is getting rich off taxes or charging exorbinant prices. I am damn sure the pharmaceutical companies are.

    I'm self employed so I just budget for my taxes the way I do all my bills.

    My water bills included a sewage charge that is higher than my water usage. That's fine with me, at least I'm showering in semi clean water. It's worth the price. So are my taxes.

    I don't look for ways to evade taxes either. Much like Michael Moore, I don't write off my mortgage interest, car expenses, charitible giving or my home office. I don't need to, and by my income I am considered poor.

    Call me crazy but I feel good about paying taxes. The more money I make and the more I am able to pay the more I like it. I feel proud to be able to pay.

    We need to find a way to make paying taxes one of the highest forms of patriotism there is.

    Tracy B Ann - technically that is my signature.

    by ZenTrainer on Thu Jan 31, 2013 at 06:51:28 AM PST

    •  Really great point. (2+ / 0-)
      Recommended by:
      chloris creator, ZenTrainer

      I feel good about paying taxes, too.  I like so much the government provides roads, libraries, schools, FDA, EPA, defense.  I just don't comprehend why people think they are suppose to get all the government benefits without paying for it.

      He that chooses his own path needs no map. Queen Kristina of Sweden.

      by Boppy on Thu Jan 31, 2013 at 08:07:41 AM PST

      [ Parent ]

  •  This is, of course, (3+ / 0-)
    Recommended by:
    chloris creator, caul, trumpeter

    deliberate Republican policy:

    If we don't fund the IRS, filing becomes even more difficult.  People who deserve money back may not get it.  Those who should be audited - including major corporations - are not, or are audited weakly.  Money is wasted.  It goes down the drain.
    They can rail against the 47% welfare queen takers, or whatever the latest ring-wing lingo is, while making it easier for the real welfare queen takers--i.e., large corporations--to evade taxes.

    Also, it's not just taxes.  It makes it harder for the IRS to audit 501(c((4)s, and hence directly affects campaign financing as well.

  •  Too much law enforcement is undesirable (0+ / 0-)

    I used to know an internal revenue agent.  He said they could collect a lot more money by hiring more agents.  The IRS did not want to do that, however, because if too many people were audited, it would start a taxpayer revolt. Their strategy is to make an example of a few, in hopes that most people will pay what they owe voluntarily.

    •  They Need A Small Cadre Of Experts (0+ / 0-)

      Mass hiring of new agents gives them lots of warm bodies who aren't really skilled enough to find anything beyond the obvious ("this 1099 for $3.14 in checking account interest was issued to Joe Sixpack but he didn't report it on his return").

      With the small cadre approach, petty harassment of Joe Sixpack is an inefficient use of labor, but meaningful investigation of Hidecash McFatcat becomes doable.

      On the Internet, nobody knows if you're a dog... but everybody knows if you're a jackass.

      by stevemb on Thu Jan 31, 2013 at 08:39:49 AM PST

      [ Parent ]

  •  Not necessarily MORE but BETTER RUN (0+ / 0-)

    As a small business owner I find it kind of sad that in 2013 I still need to print out a bunch of 1099-MISC forms on actual pieces of paper and mail them into the IRS.

    This is an exceedingly simple form that could be filed electronically, but is not. By the current method, even with computer-scannable forms (which they are), I can't see how the process is efficient enough to guarantee that every dollar of 1099-MISC income I report is claimed on the other end by the person I paid.

    Like with most things, what we need is not MORE, but BETTER RUN government departments. To get there you need to spend more money in the short term (a LOT of it in some cases) in order to see a long term gain. This is a basic fundamental of business, and yet another reason why what passes for fiscal conservatism these days is a sham.

    •  Actually you can e-file those forms but you will (1+ / 0-)
      Recommended by:

      have to pay a 3rd party provider to do that e-filing.  Why you might ask do you have to pay a 3rd party to do that?  An excellent question since the IRS could easily do that.  But our ever vigilant Congress will not permit it because then those 3rd party e filers would be out of business.  Same thing goes for your personal tax return.

      Small business can e file their w-2's at not cost with the Social Security Administration.  State government's now have many of their forms available to be e filed.

  •  SEC makes more than it costs too (2+ / 0-)
    Recommended by:
    chloris creator, Boppy

    But cutting funds to the cops on the beat of our markets is the favorite tool of... the markets.

    How big is your personal carbon footprint?

    by ban nock on Thu Jan 31, 2013 at 07:56:38 AM PST

  •  Yes, and start by auditing everyone who earns (3+ / 0-)
    Recommended by:
    chloris creator, Boppy, trumpeter

    $1M or more and files a long form.  

    Audit anyone who uses offshore tax shelters.

    And those who earn $500K to $999K should be audited once every three years, on a random basis.

    My bet is a huge uptick in revenue.

    The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries. -WiA "When you triangulate everything, you can't even roll downhill..." - PhilJD

    by Words In Action on Thu Jan 31, 2013 at 08:01:13 AM PST

    •  Part of the problem is that tax law is (2+ / 0-)
      Recommended by:
      Words In Action, leftywright

      complicated, field auditors are often not sophisticated enough to audit more complex areas of tax.  I've had audits where it was utterly clear that the auditor had no idea what he or she was auditing.  I've had to write memos explaining the basics of certain areas of tax law, and I've even had to provide sections of the code to auditors.  

      I think increasing audit frequency is a good thing, but it wouldn't do much without an increased emphasis on continuing education for the auditors.

      •  Point taken. (1+ / 0-)
        Recommended by:
        johnny wurster

        I would hope taxpayers could count on a quality audit.

        The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries. -WiA "When you triangulate everything, you can't even roll downhill..." - PhilJD

        by Words In Action on Thu Jan 31, 2013 at 08:47:47 AM PST

        [ Parent ]

      •  Perhaps IRS coud modify its hiring requirements (0+ / 0-)

        to hire experienced people such as myself.  I have a CPA license, MBT, and 25 years experience in both public accounting (Big X- audit and tax) and private industry.  But most of the IRS jobs at my current level require a law degree or 20 years experience WITHIN the IRS.  I'm too old to start at entry level with the IRS, and don't want to take another three years of my life to go to law school.

        My Karma just ran over your Dogma

        by FoundingFatherDAR on Thu Jan 31, 2013 at 12:00:30 PM PST

        [ Parent ]

  •  Reform First, THEN Consider Budget Increases (0+ / 0-)

    If you just throw more money at them, they'll just use it to harass more poor and middle-class taxpayers (the easy targets). This will yield little revenue and much fodder for reflexive hatred of government.

    The institutions (and, more importantly, the institutional culture) need to be repaired to redirect efforts toward the harder but more lucrative targets (fat tax shelters defended by attack lawyers).

    On the Internet, nobody knows if you're a dog... but everybody knows if you're a jackass.

    by stevemb on Thu Jan 31, 2013 at 08:28:09 AM PST

  •  I remember, one million years ago, (0+ / 0-)

    I visited Switzerland in the company of a Swiss national. One of our conversations turns to taxes (probably inspired by the roadside road cameras that track speeders and lead to a ticket arriving in the mail). I was stunned to hear that the Swiss government calculates its citizens' taxes and mails them a statement. The citizen simply affirms that bill and pays it, or disputes it, I assume, although my partner said she'd never heard of anyone doing that.

    My point (besides saying that the Paul Klee museum is near) is that paying taxes really ought to be a duty performed easily and happily. With it, we pay for what's left of a once great society (no capitalization there). Yet even if it were not considered unPresidential to pay a fair tax rate (thanks, Mittster, for that), it's such an onerous burden in the US. Why can't I pay my government to do my taxes for me? I guarantee they'd do them faster, and more professionally.

    Unless, of course, we think that the government we elect is out to cheat us which, well, I guess people do think that.

  •  Can I make a tax-deductible... (1+ / 0-)
    Recommended by:
    chloris creator

    ...charitable contribution to the IRS?  Would I get a penalty because they're maybe not a 501(c) organization?  Would they like it either way and not bother me and send me an appreciation letter?  Or what?

    Boehner Just Wants Wife To Listen, Not Come Up With Alternative Debt-Reduction Ideas

    by dov12348 on Thu Jan 31, 2013 at 08:59:20 AM PST

  •  But Please Start With... (0+ / 0-)

    The most egregious cheaters. Just saying.

    This head movie makes my eyes rain.

    by The Lone Apple on Thu Jan 31, 2013 at 09:19:11 AM PST

  •  Every time I see (1+ / 0-)
    Recommended by:
    Tom Lum Forest

    one of those commercials that says

    Do you owe more than $10,000 in taxes?  The come to us!

    I wanna scream "Pay your fucking taxes!" Taxes are the dues for our civilization.

    Yeah, the Repugs are against taxes, but they are also against civilization.

    I am not religious, and did NOT say I enjoyed sects.

    by trumpeter on Thu Jan 31, 2013 at 10:19:10 AM PST

  •  Tax dodging: another regressive tax policy (0+ / 0-)

    A dismayingly small percent of returns are audited, and some policies are unenforced and unenforceable due to staffing level. I'd like to see an audit of the 2012 GOP loser and his ilk, for instance. About those 'management fees'...

  •  Fixing the economy fixes the deficit (0+ / 0-)

    The concept that we could the deficit by a significant margin doing what you suggest is malarkey, utter tripe.

    FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Thu Jan 31, 2013 at 01:15:22 PM PST

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