Sunday, July 23, 2006

Tax audits are only for the 'little people'

What incredible arrogance. This administration has no shame.
The federal government is moving to eliminate the jobs of nearly half of the lawyers at the Internal Revenue Service who audit tax returns of some of the wealthiest Americans, specifically those who are subject to gift and estate taxes when they transfer parts of their fortunes to their children and others.

The administration plans to cut the jobs of 157 of the agency’s 345 estate tax lawyers, plus 17 support personnel, in less than 70 days.
The logic here is that White House and its lackeys on Capitol Hill managed to slip in enough tax dodges that there is less tax due to collect and thus less need for overview. IRS officials on the administration's take say it's not cost effective to pursue the frauds down to the last dime because they're already making 80% of their recovery on 10% of the audits. But the cheating among those Bush calls "his people" is only increasing.
Over the last five years, officials at both the I.R.S. and the Treasury have told Congress that cheating among the highest-income Americans is a major and growing problem.

The six I.R.S. tax lawyers, some of whom were willing to be named, all said that clear evidence of fraud was pursued vigorously by the agency, but that when audits showed the use of complicated schemes to understate the value of assets, the I.R.S. had become increasingly reluctant to pursue cases.

The lawyers said that the risk analysis system the I.R.S. used to evaluate whether to pursue such cases gave higher-level officials cover to not pursue tax cheats and, in the process, emboldened the most aggressive tax advisers to prepare gift and estate tax returns that shortchanged the government.
So in other words, they're cutting staff to investigate fraud because it will make it easier for the top level bureaucrats to cover for the top tier campaign donors. I feel certain there's a Bushenomic explanation for how this institutionalized fraud somehow contributes to the boom, but the only sound I hear is the squeezing of the middle class to foot the bill.
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2 Comments:

Blogger Kathy said...

So in other words, they're cutting staff to investigate fraud because it will make it easier for the top level bureaucrats to cover for the top tier campaign donors.

I'd say you hit the nail on the head with that sentence.

8:01:00 AM  
Anonymous Libby said...

It's painfully obvious, isn't it? Pure chutzpah. They don't even try to hide the fraud.

6:44:00 PM  

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