IRS admits it audits poor people because auditing rich people is too expensive

Originally published at: https://boingboing.net/2019/10/02/law-in-majestic-equality.html

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Sen Mitch McConnell blocking any Senate action, there may not be any more appropriations bills in 2019.

Then publicly embarrass him in the same way Jon Stewart embarrassed him into action with the 9/11 funding bill.

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The other day, I was explaining to my teenaged niece the many ways that late-stage capitalism is rigged in favour of the wealthy. This would have been a good example.

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I’ll take “Things That Won’t Happen Under A Warren Administration” for $200 Alex.

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Since perverse incentives seem to rule these days, this sounds like an argument for making the IRS self-funding. Yeah, I know what a bad idea that could turn out to be, but just because an idea ia terrible, doesnt mean it wont be implemented and championed.

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They should be auditing more poor people. There are a lot more of them, and they are making honest, simple mistakes. Honest, simple mistakes cut both ways; they should average out. This means that for every person who has to pay more taxes, there is probably someone else who they audit who gets a larger refund. (Possibly more, since a lot of people are overly cautious with taxes.) And since the IRS normally doesn’t penalize honest mistakes with penalties or interest, they just have to pay what they should have paid in the first place.

Audits at that level should be considered a public service and less adversarial; don’t even use the “a” word; call it a “Random Tax Double-check confirmation” and make it more user friendly and educational. In a perfect world, the IRS would have a web site that handles the taxes more or less automatically and a algorithm would flag the ones that are likely to have errors for someone to call them and do this before the refund is cut; or provide a way to finance the additional taxes if you want to without fees or penalties if it’s more than a certain amount like $50.

(Instead of getting a letter from the IRS which is confusing and has all kinds of legal garbage on it, you’d get a phone call or an email with something like “Hey, we noticed that your interest income was $92 this year, and it was $27 last year; and we just got the one 1099-INT with $29 in income from your credit union. Can you check and confirm that it just got transposed? Based on our numbers, this will increase your refund by $10; we’ll hold your refund until we hear back from you. Don’t worry, you’re not in trouble or anything; we just want to make sure that this is right!”)

Oddly enough, the wealthier people probably aren’t making honest, simple mistakes: they should be audited and both them and their tax preparers should be held responsible for dishonest mistakes found. They would lean heavily to paying more taxes; my guess is that you’d see a 75/25% split in people who’s tax mistakes change their tax liability to owing more taxes because they are intentional cheats, not honest mistakes. And I would like to see the tax preparer pay the interest and penalties for items that they had enough data to correctly file but tried to chimp to save their clients money on…

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This is all part of the plan. This is exactly what you get when you put profit-driven corporatists in political office - you get a government run for profit. And persecuting poor people who can’t fight back is a lot cheaper than going after actual criminals who can fight.

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The problem is, that while they’ll collect every penny they owe, you have to reach a certain $ threshold to get a refund, as well as there being a time limit on how far past tax day you can get any refund for. They’ll make you pay what you owe, but take too long to find a refund and you’re just out the $$ regardless of how much it would be.

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The Republicans (repeatedly) slashing the IRS budget was entirely for this purpose.

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I guess I’m willing to buy a t-shirt. Preferably with something metal on it like Satan auditing a priest.

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How is it one old corrupt slimer like McConnell can hold up the entire government? That seems like a great gaping hole in the system.

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And she told you she had read on Facebook…

The poor have always borne the burden of support for the machinations of the rich. When the upper income tax bracket was 90%, there was a functioning middle class. It’s now, what, 20%?

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They are literally saying they do it because it’s easier…

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Another good example is capped service fees, without a corresponding cap on services.

So individual or company X pays gets # of services pays $ per service as laid out in the guide.

Individual or company Y gets 1000x # of services, only 100x # of which fall under the cap, thus paying for only 1/10th of the services they consume.

Governments would be far better able to afford to supply services to the common person if they weren’t providing bulk discounts.

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She’s a smart kid who looks for information from reputable sources. Also, she and her peers are more into Instagram, and regard FB as an old person’s brand (yes, she knows FB owns IG).

37%. That was part of the discussion, too, about why a smart wealthy person might want to pay a little more in taxes to enjoy life in a much more equitable society (I presented Brazil and S. Africa as counter-examples).

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also rich people evade taxes at much higher rates than poor folks. e.g.:

“We find that tax evasion rises sharply with wealth, a phenomenon random audits fail to capture. On average about 3% of personal taxes are evaded in Scandinavia, but this figure rises to close to 30% in the top 0.01% of the wealth distribution, a group that includes households with more than $45 million in net wealth.”

https://www.nber.org/papers/w23772

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The Scandinavian and BeNeLux countries seem to have it pretty well together.

In any case, the Dow Jones was down 500 points today. So we’re winning anyway, right? So much winning, it’s bumming me out. Can’t take all the winning.

The Kaos King may overtake any attempts at organization. I suppose this is some misguided attempt to support Boris and blackmail the EU:

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And it likely has a much bigger impact than someone who makes $20,000 a year… when Amazon evades taxes, it’s bilking the American people out of millions of dollars…

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It’s nice to hear a confirmation of something I expected for quite some time now. The same way that it’s nice to get a paper cut on a finger that only occasionally dips into lemon juice.

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Isn’t this fundamentally a question of bad targets? It’s happening because the targets are number of people caught. If it was amount of money recovered instead then wouldn’t they have favoured suspending audits of regular tax payers to exclusively go after large offenders as high dollar value targets?

Of course, setting the targets the way they are (or not altering them) could obviously be an intentional part of the plan on the part of those that cut the IRS budget in the first place.

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