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IRS Cracking Down on Wealthy Tax Cheats

Sunday, September 03, 2006

While reading an article about how the Internal Revenue Service (IRS) is planning on stepping up their face-to-face audits of what they call wealthy taxpayers, I ran across a quote that made me snicker. I'll share it in just a moment, but let's look at this story first. The article is titled, "IRS audits may not catch wealthy cheats" and leads you to think that wealthy taxpayers are both tax cheats and are not paying their fair share. Both assumptions are incorrect and casts the wealthy taxpayer as the antagonist in this story. In my opinion, the only "bad guy" in this is the IRS. They're the party who is taking by force what doesn't belong to them. They're the one who depriving you of your property. Just so we're clear, I despise the IRS and anyone who works for or with them.
In the past, the IRS has conducted audits of wealthy taxpayers via paper correspondence. I'm sure this is due in part to the wealthy being too busy producing taxable wealth to stop for an audit. Think about this for a minute. How much money is lost if the IRS has to haul them down to their office to lay out their financial statements for a look-see? I think there's more to this than inconveniencing the wealthy, though. I think that in the past, the IRS was afraid to harass the wealthy because they have the resources to fight the IRS in tax court, whereas you and I, being of the middle class (I presume), don't. This is changing. Just recently, we've seen the IRS going after gift baskets given to celebrities at awards banquets.
So, where are we? A report, written by J. Russell George, the Treasury Department's inspector general for tax administration, stated that face-to-face audits could turn up more evidence of missing business income or overstated deductions for business expenses. Note that he said "could"--not "will" or "most definitely"--but "could". Roughly translated: More inconvenience for the remote possibility of harvesting more fruit from the taxpayer. Nothing ventured, nothing gained, I guess. They may as well declare a new "war on tax cheats." The government has declared a "war" on everything else. What's one more war?
But, I did mention a funny quote, didn't I? From the same linked article above, we read the words of Kevin Brown. I'm sure he's a well-meaning automaton, but his logic still makes me angry. From the article:
Kevin Brown, who heads the IRS small business and self-employed division, agreed that intensive audits find more unreported income. "The observation is correct," he said. "We don't think we're doing enough there, and we want to do more."
He's like the gang-banger who's too afraid to commit the initial crime, but is content to stand on the sidelines and cheerlead while you're getting raped by the IRS. "We don't think we're doing enough... We want to do more." What are you trying to say, Mr. Brown? You don't think the IRS has it's grubby little hands far enough into our pockets? You think they need to get out their endoscope; to force Americans to drop trou at gunpoint, so that you can make sure that we've reported every last penny that has past through our fingers in the last 365 days? Would that be enough for you, Mr. Brown? You're a cockroach, Mr. Brown. Run; scurry from the light before someone steps on you.
Did I mention I despise those who work for or with the IRS? I do.
There is something at the end of the article that I wanted to highlight for you, too. If you're not a wage-slave, like me, then you may find this of interest. Let me ask you a question: How does the IRS know if you've made any money in the last year? . . . Give up? Information returns. Someone has to tell them you received money in exchange for your labor. Either you do it, or the person you contracted with does it--usually with a 1099 form. Sometimes they can glean this from bank statements, too. Keep that in mind when you read this last quote:
Business income, unlike wages paid through paychecks, does not always get reported independently to the Internal Revenue Service. That can make it more difficult for the tax agency to detect when taxpayers understate their business income on their tax returns.
Knowledge [to the IRS] is power. Make of this what you will. I'm not endorsing any action you may take nor am I making any recommendations. I'm merely presenting information for you to consider. Remember, mine is to observe current events.


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