Tag: IRS

Why You Shouldn’t Hate the IRS Even If It’s Tax Day

About now there are hundreds of thousands of people hunched over their computers, sitting with tax preparers, searching through files and boxes of receipts, standing on a line or hanging on hold waiting to ask a question which may not have answer or, at least, one they will like. It’s Tax Day in America.

Everyone hates the IRS but it’s not their fault, as John Oliver explained on his HBO show “Last Week Tonight.” Blame congress for the recent budget and staff cuts have made it increasingly difficult for the department to do its very important job.

Think of our government as a body. The IRS is the anus. It’s nobody’s favorite part, but you need that thing working properly or everything goes to shit real quick. [..]

The fact is, blaming the IRS because you hate paying your taxes is a bit like slapping your check-out clerk because the price of eggs has gone up

Humor and History on Tax Day

Joel Fox, Fox and Hounds

“April is the month when the green returns to the lawn, the trees, – and the Internal Revenue Service.” So observed Evan Esar, a collector of humorous sayings who understood that humor is the ultimate therapy. All of us need this therapy now that tax time is here.

Fortunately, a rich vein of humor and wry observations exist about taxes to help us through this time.

When tax day comes, most citizens pay what they owe … or what they think they owe. Discovering what you owe can be a challenge. Even one of the century’s greatest geniuses, Albert Einstein said, “The hardest thing in the world to understand is the income tax.”

Humorist Will Rogers put it this way: “The income tax has made more liars out of the American people than golf has. Even when you make a tax form out on the level, you don’t know when it’s through if you are a crook or a martyr.”

So, grin and bear it, “You never miss your anus till it’s gone.”

IRS-Gate

No, not the one that has the Tea drinker’s panties in a bunch.

Another actual real scandal that will be largely ignored because somehow it’s not as sensational as bleeding from the eyes or that post the head sits atop of.

IRS Whistleblowers: Agency Executives Behind Multibillion-Dollar Corporate Tax Giveaways

By Nafeez Ahmed, Truthout

A 10-year veteran Internal Revenue Service (IRS) attorney has demanded a congressional audit of the IRS to investigate the agency’s alleged role in allowing US corporations to illegally avoid paying billions of dollars in taxes even as it cracks down on individuals and small businesses.

In a letter to Treasury secretary Jacob Lew, IRS commissioner John A. Koskinen and IRS chief counsel William Wilkins, Jane J. Kim, an attorney in the IRS Office of the Chief Counsel in New York, accused IRS executives of “deliberately” facilitating multibillion-dollar tax giveaways.



a former IRS attorney in the Office of the Chief Counsel for over 15 years, said on condition of anonymity – for fear of retaliation from the agency – that Kim’s allegations are not isolated, but represent a deep-rooted trend: “The problem is the IRS upper management don’t want a big case going forward. They are purposely not working big cases. Employees are quietly encouraged not to expedite them, and to settle or dismiss them. I’ve seen the IRS sit on straightforward billion dollar cases for years, and then decide not to pursue.”


So, just like the case of the Fed being super deferential to the banks they are supposed to be regulating. Move along people, nothing to see here.

IRS: Income Gap Greatest Since 1920

A recent analysis of IRS data on income and wealth in the United States found that the gap  between the richest 1 percent and the rest of America is the widest it’s been since the 1920’s.

The top 1 percent of U.S. earners collected 19.3 percent of household income in 2012, their largest share in Internal Revenue Service figures going back a century.

U.S. income inequality has been growing for almost three decades. But until last year, the top 1 percent’s share of pre-tax income had not yet surpassed the 18.7 percent it reached in 1927, according to an analysis of IRS figures dating to 1913 by economists at the University of California, Berkeley, the Paris School of Economics and Oxford University.

One of them, Emmanuel Saez of the University of California, Berkeley, said the incomes of the richest Americans might have surged last year in part because they cashed in stock holdings to avoid higher capital gains taxes that took effect in January.

That soaring stock market means nothing to 99% of Americans, it just proves the rich are getting richer.

According to DSWright at the FDL News Desk, we may rapidly be approaching the bursting of another bubble:

But what’s worse is that the 1% hit a consumption limit – they can only buy so many cars, meals, homes – so the only way they can benefit from their wealth is to invest in financial assets which inflates those assets into bubbles. Then the bubbles pop, and in theory, they should eat the losses. But what we all know, or should know by now, is that the 1% refuses to eat the losses and instead use what is left of their wealth to buy favors in Washington to make them whole at your expense. It is a pretty awful system, especially if you are in the 99%.

And now due to the destruction of the labor movement, wages have frozen and even more income from production is going to the top 1% who are re-inflating the financial markets and having a great time doing so as the corporate profits to wages ratio is massive. This while America continues to have record unemployment and underemployment.

The 99% do not have a seat at the economic table as Washington ignores their needs and bends over backwards to help the 1% campaign contributor class. And when you aren’t at the table you are on the menu.

Freelance writer Sasha Abramsky joined Democracy Now! hosts Amy Goodman and Juan González to discuss his new book “The American Way of Poverty: How the Other Half Still Lives.” and ther reocrd breaking income inequality in the US.



Transcript can be read here

Corporate Taxes = 0

The Real IRS Scandal Is That ‘They Let General Electric Not Pay Any Taxes’

In an email to The Huffington Post on Sunday, GE spokesman Seth Martin wrote that the company paid $3.2 billion in cash income taxes worldwide, including in the U.S., in 2012. In addition, he stated, GE paid more than $1 billion in other state, local and federal taxes.

“GE is one of the largest payers of corporate income taxes,” Martin wrote.

Still, GE and other hugely profitable U.S.-based companies like it have come under fire in recent years over their tax practices. Tax breaks given to corporations cost the U.S. government $180 billion per year, according to a recent report from the Government Accountability Office. In addition, companies are likely stashing $1.9 trillion overseas in an aim to avoid paying U.S. taxes on those profits, according to a March analysis by Bloomberg.

GE parks the most profits offshore of any company, Bloomberg found. Many companies including, Apple, Microsoft and Google allegedly employ this strategy of keeping money overseas to avoid paying U.S. taxes on those profits.

The real problem is that GE doesn’t pay its fair share of the US tax burden and, apparently, Apple gets away with a billion dollar tax dodge due to a loop hole in the tax laws. Tim Cooke, Apple’s CEO, appearing before Senate Permanent Subcommittee on Investigations defended funneling billions to off shore tax shelters. What didn’t get mentioned at the hearings were the billions that Apple saved using the “excess stock options” tax break. The loophole allows corporations to deduct compensation that they give to executives in the form of stock options as an expense, the same way they deduct cash compensation. The hitch: stock options don’t hurt the companies bottom line, unlike cash options.

“The only meaningful costs associated with this are that the more stock you issue, the more it dilutes the value of the stock that’s already held by shareholders,” Matthew Gardner the executive director of the Institute on Taxation and Economic Policy told The Huffington Post last month.

Apple took home $3.2 billion between 2010 and 2012 (pdf) thanks to this tax break — the most of any company, the report found. But it’s not the only company taking advantage of the loophole. Activists have criticized Facebook over its use of the executive stock option tax break in recent months after the social networking giant used it to wipe out its entire tax liability in 2012.

Though using the tax break has been rather common practice among technology companies, which tend to issue a higher percentage of their compensation in stock options, it’s becoming more common and lawmakers are slowly starting to take notice, Gardner said.

While the hearing focused on Apple’s offshore holdings, companies have stashed $1.9 trillion in offshore accounts to avoid paying US taxes.

Large U.S. companies boosted their offshore earnings by 15 percent last year to a record $1.9 trillion, avoiding hefty tax bills by keeping the profits abroad, according to a new report.

The overseas earnings stockpile has climbed by 70 percent over the past five years, said research firm Audit Analytics. Data in its report covers the Russell 3000 index of the largest U.S. corporations. [..]

Conglomerate General Electric Co , had the most indefinitely reinvested overseas earnings, at about $108 billion, while drugmaker Pfizer Inc was next with $73 billion, according to Audit Analytics.

Yeah, corporations not paying taxes is the problem.

IRS Gate: Just Ineffective Management?

President Obama is definitely having a bad week with two screw ups by the IRS and the Department of Justice and the Republicans obsession with Benghazi. The media has latched on to these “crises” like pit bulls with a juicy ankle. While Benghazi-gate is purely political with its eye on tainting the possible 2016 presidential campaign of Hillary Clinton, the secret subpoena of AP’s phone records and the IRS targeting of right wing 501(c)4’s financing have more relevance.

The news that the IRS was focusing on conservative groups with words such as “tea party” or “patriot” in their names broke when the director of the IRS’s exempt-organi­zations division, Lois G. Lerner, confirmed complaints by tea party groups that their applications for ­tax-exempt status were being unfairly scrutinized and delayed. Oops.

Naturally, the right wing came was furious and rejected the IRS apology demanding an full investigation:

“I call on the White House to conduct a transparent, government-wide review aimed at assuring the American people that these thuggish practices are not underway at the IRS or elsewhere in the administration against anyone, regardless of their political views,” Senate Minority Leader Mitch McConnell (R-Ky.) said. “An apology won’t put this issue to rest.”

“The IRS has demonstrated the most disturbing, illegal and outrageous abuse of government power,” said Jenny Beth Martin, national coordinator of Tea Party Patriots. “This deliberate targeting and harassment of tea party groups reaches a new low in illegal government activity and overreach.”

The IRS has a notoriously bad history of being used by presidents to harass and intimidate their political enemies, most infamously by Richard M. Nixon. Since Watergate the IRS was reformed making it more independent supposedly to insulate from politics.

In a government oversight report (pdf) by the Treasury Inspector General for Tax Administration, the IRS was found to have acted “inappropriately” and was poorly managed allowing “inappropriate criteria to be developed and stay in place for more than 18 months.”

All In host, Chris Hayes discussed the report and how the IRS handled this internally with New York Times reporter Nicholas Confessor.

Andy Kroll at Mother Jones recounts the five things you need to know in the Inspector General’s IRS Tea Party Scandal Report:

Treasury’s Inspector General for Tax Administration conducted the probe from June 2012 to February 2013 in response to pressure from Congress, and the 54-page report sheds light on the whole debacle.

Here are five key takeaways from the report.

1) Incompetence appears to have caused this scandal, not wrongdoing. [..]

2) Even the IRS doesn’t understand how political is too political in the murky world of 501(c)(4) groups. [..]

3) All the confusion at the IRS led to a huge backlog and a lot of unnecessary headaches. [..]

4) The IRS didn’t feel outside pressure to single out tea partiers. [..]

5) The report gives as much fodder to transparency advocates as it does to IRS critics.

Tax Revenues Are Falling

David Cay Johnson, professor at Syracuse University, author of “Free Lunch” and columnist for Tax.com, spoke with Rachel Maddow about the Republican plans to cut funding to the IRS and the direct impact that will have on the governments ability to collect taxes and reduce the deficit.

Taking the Revenue Out of the IRS

Johnson also reported in an article at Tax.com, that tax revenues in 2010 were smaller than in 2000 before the Bush tax cuts.

We take you now to the official data for important news. Federal tax revenues in 2010 were much smaller than in 2000. Total individual income tax receipts fell 30 percent in real terms. Because the population kept growing, income taxes per capita plummeted.

Individual income taxes came to just $2,900 per capita in 2010, down 36 percent from more than $4,500 in 2000. Total income taxes and income taxes per capita declined even though the economy grew 16 percent overall and 6 percent per capita from 2000 through 2010.

Corporate income tax receipts fell 27 percent and declined 34 percent per capita, even though profits boomed, rising 60 percent.

Payroll taxes increased slightly overall, but slipped per capita because the nation’s population grew five times faster than the number of people with any work. The average wage also declined slightly.

You read it here first. Lowered tax rates did not result in increased tax revenues as promised by politician after pundit after professional economist. And even though this harsh truth has been obvious from the official data for some time, the same politicians and pundits keep prevaricating. Some of them even say it is irrelevant that as a share of GDP, income tax revenues are at their lowest level since 1951, when Harry S. Truman was president.

No matter how many times advocates of lower tax rates said it, tax rate cuts did not pay for themselves, did not spur economic growth, did not increase jobs, and did not make America better off.

(emphasis mine)

The full transcript for the video can be read a Rachel’s blog.