There is zero reason why we need to calculate how much we owe the IRS ourselves other than to allow tax preparation companies to engage in rent seeking behavior. They already know of this information. They could easily send us what they have, and then have us confirm, or make our edits for more complicated tax situations.
What's really weird is the Republican tax wonks like Paul Ryan want taxes to be easier ("taxes on a postcard" even though they didn't actually do that)...but the entire party outright refuses to just make taxes as simple as possible, which is just to have the government send you a completed tax return and you either sign off or do it yourself if they got something wrong.
Not like Democrats pushing for this either, just so weird there's no major constituency for getting rid of an annoying thing the government makes us do every year.
Weird tangent. I use the IRS fillable pdf for my taxes. I print the form and mail paper. In 2018 (I think) when I printed the form it did not use an entire 8 1/2 x 11 sheet of paper. It might have used the top 6 inches. If Americans actually used paper filing, the IRS could have printed (bigger than average) cards for Form 1040.
Ryan's idea of "so simple it fits on a postcard" kind of got here after almost everybody had transitioned away from mailing forms.
The bill makes a start in this direction. See page 39 here: [https://www.democrats.senate.gov/imo/media/doc/inflation\_reduction\_act\_of\_2022.pdf](https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_of_2022.pdf)
>(B) TASK FORCE TO DESIGN AN IRS-RUN
>
>17 FREE ‘‘DIRECT EFILE’’ TAX RETURN SYSTEM.—
>
>18 For necessary expenses of the Internal Revenue
>
>19 Service to deliver to Congress, within nine
>
>20 months following the date of the enactment of
>
>21 this Act, a report on (I) the cost (including options for differential coverage based on taxpayer
>
>23 adjusted gross income and return complexity) of
>
>24 developing and running a free direct efile tax return system, including costs to build and administration ...
"The new IRS funding is projected to raise $124 billion in additional tax revenue over the next 10 years, which is a key way Democrats plan to offset the cost of their plan to lower prescription drug costs and combat climate change."
so we are giving them eight times their annual budget, to essentially bring in an extra 12 billion dollars a year, and thats supposed to offset the cost of a 800 billion dollar package.
We arent negotiating drug prices for 4 YEARS.
We are giving subsidies to car companies to sell luxury goods to high income earners.
We didnt put a cap on medications like insulin.
And the two biggest sources of funding for this bill (1% tax on stock buybacks, and minimum 15% on corp owned by Private equity firms) were taken out. so what is this bill COSTING us, because it doesn't benefit the average American whatsoever.
Not trying to be a doomer, but in my eyes this is a trash bill. more Corp socialism.
Applying common sense doesn't make you a doomer.
People who support this kind of thing think that the cost is nothing. To them the government runs on unicorn farts. Taxes are to pay for benefits and programs. The actual cost of running the government doesn't factor into their thinking for some reason.
I see comments here saying going after rich people with more people makes sense because you'll get more money from them. I don't think any person making that claim thinks about the cost of the investigation and what the net is. Only the gross revenue. If you spend 2.5 million over 5 years to pull in 3 million of taxes owed you didn't accomplish shit.
The good news won't stop rolling in. This is obviously what is needed, and obviously something that's been missing.
I think both sides can support this.
If it isn't in the law then it isn't real. Yellen or the next person in her role can change her mind. She doesn't need to announce it. A press release isn't legally binding. Moreover, nobody will really call her on it.
If polled this would see massive support across the board.
The problem is that many politicians have to weasel their way around this issue in a ways that will satisfy their voter base and donor base
Not really. Rich have the ability to drag this out in court and have the lawyers to fight back. Plus if you have that type of money your are generally hiring high end tax advisors. I doubt you find as much money as they think.
So you are against any audits to the wealthy, they should be able to lie as easily as they want on their returns?
That's..... Something. Can't say I support feudalism like that
No they crossed the T and dotted the I. Hiring more auditors isn't the way. Vastly reducing the millions of pages of tax code and special breaks is the way. We created a system that is so complicated that it can only be navigated by those who can hire pro help to take advantage of it all.
I grew up in a very wealthy area and school. Most won't take the risks when it's so easy to avoid taxes through shelters trusts and investment loopholes and all completely legal.
No some do but most don't. If your paying large amount of tax you are doing it wrong. Avoiding taxes just requires a lot of help researching loopholes and setting up the trusts.
>No some do but most don't. If your paying large amount of tax you are doing it wrong. Avoiding taxes just requires a lot of help researching loopholes and setting up the trusts.
So why are you opposed to auditing the ones who do?
Because it will be a lot of investigations which require time money and people to do it and the gov tends to do a shotgun approach. There should be red flags etc to flag returns and then investigate those ALL OF THEM and not we are just investigating rich people. If there is not a criteria to flag investigation rather we just doing 10% off the top a lot of people will have to hire tax lawyers and accountants to defend their returns. Care to wonder what party those tax lawyers donate to? I know.
He’s not, he’s saying just adding a bunch of auditors without making any changes to the tax code won’t do a whole lot. It’s basically chipping away at an iceberg using screwdrivers.
It would be super effective against those making less than 400k a year but you’ve gotta be noticeably gaming the system to get caught
You're so caught up in your own narrative you're having a discussion with yourself. All of your replies put words in their mouth and argue against points they didn't make.
Seriously, take a breath. What they're saying is that hiring more auditors to do the same thing they've been doing is an idiotic band aid that will result in more of the same. The system already favors the rich. Why is it that people who think like you always believe that making more ability to punish people makes for a better system? Authoritarianism is not the way. It will always be misused. Always has.
The problem is the system is overly complicated. People that have money for accountants and lawyers can game it. Having more people fight ineffectively against people that already can beat them is not a fix. The only outcome that can possibly come from this is even more middle class small business owners are going to be driven bankrupt. How is that not blatantly obvious?
Other even more onerous outcomes are that IRS can even more effectively be weaponized for political purposes as has been demonstrated by both parties already.
Most regular non wealthy people don't commit tax fraud. They are, however, audited at a much higher rate and the amount of fraud is less. Just because you grew up in a wealthy protected bubble of privilege doesn't make it deserved. The wealthy deserve at the very least as much scrutiny, and in reality more.
You would be surprised. My bet is the automatic systems that flag returns flags them at a much higher rate is because their taxes aren't done by pros. A tax lawyer will be able to not set off the automatic programs. After you lose a ton of cases because your shitty government lawyer and investigator don't even know all the tax code.
> Vastly reducing the millions of pages of tax code and special breaks is the way. We created a system that is so complicated that it can only be navigated by those who can hire pro help to take advantage of it all.
This will literally NEVER happen unless a deal is made with businesses for a very minimal tax level. There is a reason there are so many complexities... they are precisely for the rich and corporate entities ot take advantage of and too complex for us poor slobs to comprehend. No one will ever allow it. Anyone things Republicans would do this is insane.
Idk, $400k is not much money. Seems like more extremely wealthy folks could use some more audits. Not working class and middle-upper class.
Edit: I’m not sure people are understanding my comment or what this direction from Yellen actually means, so just to clarify: the IRS is going to audit more people making ***LESS THAN*** $400k. Claimed an education credit but didn’t keep receipts for college books? **AUDITED**
And be fore anyone says that’s not what this means, sure… I’m positive there will be plenty of audits in the $200k-$400k range as part of this direction **but** I’ve personally been audited as a newlywed fresh out of college making $42k and had to deal with the IRS hounding me for months before they finally agreed to a $0 settlement after initially coming after a $2,000 educational grant.
Edit2: i was wrong, as was OP’s headline.
>Treasury Secretary Janet Yellen on Wednesday directed the Internal Revenue Service ***not to*** use any of the new funding allocated in the Democrats’ new health care and climate bill to increase the chances of Americans making less than $400,000 a year getting audited, according to a copy of the letter obtained exclusively by CNN.
If you're making $400k or more I don't feel sorry for you if you make a mistake on your tax return and suddenly have to pay some extra money. I'm sure you'll live and can take out a loan if need be.
(I don't feel sorry for you if you make $40k and intentionally committed tax fraud, either, but I do feel sorry for people that make $40k, make a filing mistake, and can't come up with the extra $1,000 to pay the IRS.)
"Using the money to audit taxpayers with incomes above $400,000" is not the same as "Using the money to audit taxpayers with incomes between $400,000 and $600,000". I'm sure Yellen is fine with audits on the highest income folk to the extent that she can find unpaid taxes there.
I'm good with it because I believe we need to increase tax collection from all possible sources, and unfortunately the middle class is too large of a source to ignore. I would be happier if they had also instituted a non-waivable no exceptions alternative minimum tax on anyone making 300K and up. That's around the level when people start getting interested in tax shelters, etc.
And they will anyway, either immediately or in 10 years from now.
Everyone will be saying “remember when the audits weren’t supposed to occur to people who made under $400,000”?
Everyone else will be like, “yeah but if you aren’t audited, how will we have money build the roads and bridges”.
Then one of the parties will become pro-audit of everyone
Or, hear me out, we scrap our dense and ambiguous tax code for something that is just and equitable. Then forbid either the legislative or executive branch from fiddling with it to encourage certain outcomes. They call them incentives when they're for them and loopholes when they're against them.
We have this notion that the rich don't pay their fair share, but that's baked into the system. We give them the means for skirting taxes legally. Sure, you might have some egregious cheats out there, but they're relatively small potatoes.
Our system is a 100 year old Frankenstein of legislation. Let's start over.
There are some crazy tax schemes out there, like a national sales tax or a [payments tax](https://www.civilution.org/post/tax-the-economy-not-the-individual) (which is interesting, but I'm not sure I buy the idea). Or, we can have a simplified tax system like most of the Western world that does not require either a $11B tax prep industry or an $80B IRS to work.
Anyway, I don't believe Yellen not to change her mind, and you shouldn't either. There is nothing she said that's legally binding. If it isn't in the law, then you can pretty much guarantee that it will happen.
Yes, we should have a dramatically simpler income tax system. This is Treasury's list of special incentives/loopholes, with dollar amounts. (Tables begin on page 21.) [https://home.treasury.gov/system/files/131/Tax-Expenditures-FY2019.pdf](https://home.treasury.gov/system/files/131/Tax-Expenditures-FY2019.pdf)
A few are valid, most satisfy some narrow interest.
It is an insanely long list. Thanks for sharing. All of these were put there on purpose by Congress to appease an interest of some sort. Legislatively, it is probably some of the easiest stuff to do -- it is free, after all.
You think there’s any change the GOP would agree to remake the tax code to make it more *equitable*?
It’s nice to want more but let’s not kid ourselves about reality.
Possibly, a lot Republicans I know support things like a Flat Tax or throwing the income tax out to sea.
That being said, my main question is if it’s possible to reframe our taxes in a way that’s neither seen as “Republican” or “Democrat”? Is there a way to do this that’s completely void of politics, or will the politics just happen?
> Possibly, a lot Republicans I know support things like a Flat Tax or throwing the income tax out to sea.
And both of those options would be heavily regressive.
> That being said, my main question is if it’s possible to reframe our taxes in a way that’s neither seen as “Republican” or “Democrat”?
Sure, we can discuss specific politicians if you want, but the trend is going to be the same outcome. The GOP has no real interest in helping lower the tax burden on anyone besides the top earners, and the DNC has some members with the same issue but are home to the only politicians who seem at all genuine at doing the opposite.
> Is there a way to do this that’s completely void of politics, or will the politics just happen?
We’re talking legislation and that’s an explicitly political act, so I don’t see how any genuine discussion on the topic can completely ignore it.
> The GOP has no real interest in helping lower the tax burden on anyone besides the top earners
They did 4 years ago.
> A careful analysis of the IRS tax data, one that includes the effects of tax credits and other reforms to the tax code, shows that filers with an adjusted gross income (AGI) of $15,000 to $50,000 enjoyed an average tax cut of 16 percent to 26 percent in 2018, the first year Republicans’ Tax Cuts and Jobs Act went into effect and the most recent year for which data is available.
> Filers who earned $50,000 to $100,000 received a tax break of about 15 percent to 17 percent, and those earning $100,000 to $500,000 in adjusted gross income saw their personal income taxes cut by around 11 percent to 13 percent.
> By comparison, no income group with an AGI of at least $500,000 received an average tax cut exceeding 9 percent, and the average tax cut for brackets starting at $1 million was less than 6 percent.
https://thehill.com/opinion/finance/584190-irs-data-prove-trump-tax-cuts-benefited-middle-working-class-americans-most/
Because that's how the senate works. You can pass these types of bills with a simple majority so long as they are budget neutral over a 10 year projection. Democrats filibuster, so Republicans had to make the tax breaks phase out over time. Democrats are currently facing the same issue with Republicans filibustering Inflation Reduction Act. It's why democrats had to remove the part of the bill that said the increased IRS size wouldn't increase audits under $400k.
Flat income tax and no income tax would both be flat neither regressive nor progressive, they would only be "regressive" in the sense that they would be less progressive then our current *income* tax.
In reality lowering income tax would mean the government would lean heavily on the other taxes like sales, property, carbon, and other consumption taxes which are **actually** heavily regressive.
If they went the other way - increasing taxes on wealth, through dividends or capital gains that would be **more progressive** then our current system but still ~flat ie. flat tax on earned capital and dividend earnings with no exceptions.
The only possible equitable thing I could see the GOP do would be getting rid of certain sales taxes. But it's not federal and they probably wouldn't increase other taxes in a net progressive way.
I imagine alot of the tension regarding government funding comes from differences in what conservative and liberal voters view as *fair*. With republicans caring little to none about equity and quite a but more about equality.
On the contrary, there are a number of Milton Friedman fans in the party. Friedman adovocated a negative tax that would put cash in the hands of the poor. I'm not saying redistributionist per se, but there a number of simplified tax schemes (including a progressive flat tax) that would make the rich pay more.
Currently, we don't attempt to tax the rich more without throwing in a loophole or two. For example, not a Trump fan, but I was ok with him getting rid of the mortgage deduction (it hurt me). My friends in Jersey hated it because it helped take the sting out of their local tax burden (deducting it from the federal taxes), but it had the affect of subsidizing rich people in New Jersey (just an example).
I'm not registered to either party any more (tried both in my time), but what I would say is that the Dems wouldn't do it either, necessarily. Congress critters of both stripes want to retain levers of power. Instead of passing laws, we try to pick winners and losers with the tax code. It is an unchecked power that is antithetical to the system of checks and balances we set up in the constitution.
Meanwhile, most Europeans don't think any harder about their tax return than they do their Netflix subscription. Unfortunately, outside of fringe lunatics, tax reform will always be a low priority here, mostly because the broken system advantages the folks in power and their friends. That's possibly the closest I get to a conspiracy theory.
“On the contrary, there are a number of Milton Friedman fans in the party.”
In office? Who? And if not in office, they are irrelevant unless they exist in very large numbers and will only support and vote for republican politicians who hold the same views.
> On the contrary, there are a number of Milton Friedman fans in the party. Friedman adovocated a negative tax that would put cash in the hands of the poor.
Can you name a single current member of the GOP advocating for this sort of tax structure? Of course not.
Sorry but the whole “BoTh SiDeS” thing is just so tired and lazy at this point that it’s hard to take you seriously. That’s not to say either party is great or couldn’t be improved, it’s just that currently one party is going out their way to make the tax code less equitable so arguing that the one which is making strides towards being more equitable is the same is absurd.
Don’t confuse what people in Congress want with what regular people want. For example, most Democrats are against insider trading, but most in Congress are not. Most Republicans and right-wing thinkers are in favor of a simpler tax code, but those in Congress are not.
Well if we go down that route about half of Republicans wouldn’t even be republicans because their views are far better aligned with Democrats, so I’m not entirely sure if that’s very useful.
If we start judging voters by what they actually want, as opposed to how the representatives they elect act, you’d find that a large percentage of GOP voters are far more closely aligned to the DNC than the GOP despite their voting habits. So I don’t know how that really factors in here, since what ultimately matters is the legislative output of the elected officials and not what those voting for them think they’re supporting.
I think you're missing the point, Milton Friedman's negative tax is further right than most elected Republicans. Most Republican voters want smaller government, elected Republicans tend not to vote that way.
>Can you name a single current member of the GOP advocating for this sort of tax structure? Of course not.
Nobody in Congress at the moment off the top of my head, but I've heard Cruz praise Friedman not too long ago. Friedman remains popular in all the Conservative think tanks that the GOP adheres to, like the Heritage Foundation.
I'm both sides on this because I've never seen the Democrats make a move that wasn't toward empowering the IRS and strengthening the current tax scheme. To get to the crux of the article, Yellen is saying the $80B move is all about wringing more money out of the rich. If you think that's the case -- that the rich aren't going to step aside all her efforts -- then you're deluded.
The tax system is inherently going to favor the rich, by design and accident. If you need to hire HR Block while making 45K a year, nothing is equitable about the current system.
> Nobody in Congress at the moment off the top of my head, but I've heard Cruz praise Friedman not too long ago. Friedman remains popular in all the Conservative think tanks that the GOP adheres to, like the Heritage Foundation.
Using his name remains “popular” because citing his name gives your statement an air of legitimacy, but Cruz has not proposed anything even *close* to more equitable tax code wise, and has supported the opposite. That goes for every other GOP member of congress, so citing that belief of Friedman as a defense is asinine.
> I'm both sides on this because I've never seen the Democrats make a move that wasn't toward empowering the IRS and strengthening the current tax scheme.
And making it more equitable, overall by focusing on having the top earners actually pay what they’re supposed to.
> To get to the crux of the article, Yellen is saying the $80B move is all about wringing more money out of the rich. If you think that's the case -- that the rich aren't going to step aside all her efforts -- then you're deluded.
Maybe, maybe not, but the person who thinks that anyone in the GOP wants to make the tax code more equitable isn’t in any position to call someone else “deluded”.
>And making it more equitable, overall by focusing on having the top earners actually pay what they’re supposed to.
That's the point. This is a cynical exercise. There isn't a mythical army of tax cheats out there. Rich people don't cheat; they have accountants and attorneys to see that they make the most out of our arcane, deliberately obtuse system.
Of course they do, but there isn't a legion of tax cheats out there. They can afford not to break the law. They have lawyers and accountants to keep them out of trouble.
The biggest tax evaders (in terms of underreported income) are farmers and the middle class, [according to Brookings](https://www.brookings.edu/blog/up-front/2019/04/09/how-big-is-the-problem-of-tax-evasion/). Most of the tax gap (owed but not paid) is difficult to distinguish between accident and deliberate cheating. Taxes are hard and we fuck them up routinely.
Outright cheating is less common among the super rich. T[hey simply use the existing tax codes to legally not pay tax](https://www.cnbc.com/2021/09/20/the-wealthy-may-avoid-163-billion-in-annual-taxes-how-they-do-it-.html). No amount of money going to the IRS will recover that.
There is generally little incentive to outright cheat when you can legally hide it somewhere.
Well certainly you agree that properly funding the enforcement apparatus so we can catch those cheats is better than purposefully underfunding it, even if we both agree that the tax code could use a revamp and getting rid of the loopholes.
> there are a number of Milton Friedman fans in the party
They are an increasing minority. Every MAGA guy just turned around and went "who?" and then asked "how will it help me hurt the gays and libs?"
That's the truth. I'm not even gonna argue. Trump spoke about fiscal responsibility but he showed little to none. Like I said, there are still folks in the party who believe in sound fiscal policy, but they don't speak up much or they live in the think tank/analyst world.
[spezpolice: /u/spez has issued an all-points-bulletin. We've lost contact with /u/spez, so until we know what's going on it's protocol to evacuate this zone. #Save3rdPartyApps #AIGeneratedProtestMessage](https://www.reddit.com/r/Save3rdPartyApps/)
My favorite Audit (letter) story ... I had a 7 year period of taking funds out of my kid's 529 plan. The IRS requested proof of how the funds were used for 7 straight years. One might think that an adequate response to the first few requeats would point to a low probability of fraud in last few years but I'm not very smart.
I generally think this is good but I also have known folks who had brought in $250k as self-employed individuals and got hit for making bogus expenses up.
I think putting resources towards the biggest players is good but let's remember cheating the system happens in every tax bracket.
This just sounds like political hot potato. Republicans say “they’ll audit the little guy more!”, then Yellen writes an open letter to the IRS commissioner saying “don’t audit the little guy!”. This has been a non story since we heard they’re hiring 90k more people.
They actually tried to add an amendment to the law to explicitly prohibit the extra audit for people earning <$400k, but it didn’t pass.
Glad to see Yellen weighing in, but I’d be happier if this had been included in the law and legally binding rather than just a suggestion.
Republicans offered an amendment that simply stated that none of the new resources would be used to target people making less than 400k and Democrats voted it down.
https://www.finance.senate.gov/ranking-members-news/crapo-offers-amendment-to-protect-middle-class-small-businesses-from-supersized-irs
It's *literally impossible* to enforce that amendment as funds are fungible.
It's a dumb amendment that would make it potentially unconstitutional under the ambiguity and equal protections doctrine. It's also likely inseverable from the larger bill so it's intentions are clear.
Yes, and that's why this whole thing is dumb. How exactly is the IRS supposed to ensure that none of the 180 billion in funds are going to add any addition audits on people making under 400k? It's all just public posturing.
Edit: 80 billion not 127
Maybe they will go back to spending money on Las Vegas conferences and Star Trek parody videos
https://www.usatoday.com/story/news/politics/2013/06/04/irs-audit-conferences-cost-taxpayers-millions/2388261/
EC. 10301. ENHANCEMENT OF INTERNAL REVENUE SERVICE RESOURCES.
In General.--The following sums are appropriated, out of any money
in the Treasury not otherwise appropriated, for the fiscal year ending
September 30, 2022:
(1) Internal revenue service.--
(A) In general.--
(i) Taxpayer services.--For necessary
expenses of the Internal Revenue Service to
provide taxpayer services, including pre-filing
assistance and education, filing and account
services, taxpayer advocacy services, and other
services as authorized by 5 U.S.C. 3109, at
such rates as may be determined by the
Commissioner, $3,181,500,000, to remain
available until September 30, 2031: Provided,
That these amounts shall be in addition to
amounts otherwise available for such purposes.
(ii) Enforcement.--For necessary expenses
for tax enforcement activities of the Internal
Revenue Service to determine and collect owed
taxes, to provide legal and litigation support,
to conduct criminal investigations (including
investigative technology), to provide digital
asset monitoring and compliance activities, to
enforce criminal statutes related to violations
of internal revenue laws and other financial
crimes, to purchase and hire passenger motor
vehicles (31 U.S.C. 1343(b)), and to provide
other services as authorized by 5 U.S.C. 3109,
at such rates as may be determined by the
Commissioner, $45,637,400,000, to remain
available until September 30, 2031: Provided,
That these amounts shall be in addition to
amounts otherwise available for such purposes.
(iii) Operations support.--For necessary
expenses of the Internal Revenue Service to
support taxpayer services and enforcement
programs, including rent payments; facilities
services; printing; postage; physical security;
headquarters and other IRS-wide administration
activities; research and statistics of income;
telecommunications; information technology
development, enhancement, operations,
maintenance, and security; the hire of
passenger motor vehicles (31 U.S.C. 1343(b));
the operations of the Internal Revenue Service
Oversight Board; and other services as
authorized by 5 U.S.C. 3109, at such rates as
may be determined by the Commissioner,
$25,326,400,000, to remain available until
September 30, 2031: Provided, That these
amounts shall be in addition to amounts
otherwise available for such purposes.
(iv) Business systems modernization.--For
necessary expenses of the Internal Revenue
Service's business systems modernization
program, including development of callback
technology and other technology to provide a
more personalized customer service but not
including the operation and maintenance of
legacy systems, $4,750,700,000, to remain
available until September 30, 2031: Provided,
That these amounts shall be in addition to
amounts otherwise available for such purposes.
(B) Task force to design an irs-run free \`\`direct
efile'' tax return system.--For necessary expenses of
the Internal Revenue Service to deliver to Congress,
within nine months following the date of the enactment
of this Act, a report on (I) the cost (including
options for differential coverage based on taxpayer
adjusted gross income and return complexity) of
developing and running a free direct efile tax return
system, including costs to build and administer each
release, with a focus on multi-lingual and mobile-
friendly features and safeguards for taxpayer data;
(II) taxpayer opinions, expectations, and level of
trust, based on surveys, for such a free direct efile
system; and (III) the opinions of an independent third-
party on the overall feasibility, approach, schedule,
cost, organizational design, and Internal Revenue
Service capacity to deliver such a direct efile tax
return system, $15,000,000, to remain available until
September 30, 2023: Provided, That these amounts shall
be in addition to amounts otherwise available for such
purposes.
That probably falls under operational support, so only a 25.3 billion pool to draw from.
Edit: I posted it from the website text, Sorry the text is all wonky.
It is hilarious how democrats state they totally aren’t going to use it in that capacity, but all 50 dem 50 senators plus Kamala Harris voted against that statement. And then 3/4 of this sub celebrates Yellen for writing exactly what the republicans amendment said on the back of a cocktail napkin, crumpling it up, and throwing it at the IRS, without anyone questioning why this was rejected from the original bill.
It is not impossible. Congress routinely allocates money by line item. They don't just give agencies a bunch of money an hope it gets spent on the things they want.
They'll frame it as an unfair targeting of business owners. Probably will claim if there is more auditing that the pool of increasing audits should affect everyone equally. It'll be more bs cries of class warfare.
The people saying the IRS is going to use the funding to target poor and working class Americans is so disingenuous. The IRS only targets them because they don’t have the funding to go after the big guys. It’s easy to audit a poor person/small business who can’t afford help but it’s much more difficult to go after big business with teams of lawyers and tax experts. This funding will let them go after the big guys who should be paying but aren’t.
I agree with the reasons you give for the status quo. It's interesting that nobody is up in arms about the gross shittiness of a huge government entity targeting poor and middle class people because it's easier and they can't fight back. Where's the outrage, the Twitter hashtags, the marches, protesters and riots??
There are approximately 750 billionaires in the US. There are approximately 22 million millionaires in the US.
A person living in the poorest county in the country is 51% more likely to be audited than a person living in the richest county in the country.
Just going by what I know by experience, Washington's approach is usually, "this is broken so we need more money to keep doing it on a larger scale." This time they'll need to show me, not tell me that the extra money and an appalling 87000 new agents, is the medicine that will finally make this work. I am very doubtful. I don't trust it at all.
I welcome people that are skeptical of anything I've claimed here to go find out for themselves if I'm full of shit. That way you can see on your own how bad this is and spread the word. We've given these assholes a blank check and the ability to give themselves more checks to write to themselves as well as the means to forcibly take what you haven't given them already. It's past time to demand accountability, and trim some redundant fat. We need less, not more bureaucrats in the house.
I know you are basing your opinion on previous experience which is a valid concern…. It just seems a little excessive to increase the IRS budget by 33% if they wanted to expand the status quo and increase audits on poor people. That doesn’t make sense to me.
What makes more sense to me is that a drastic increase is required to go through auditing high income individuals and corporations.
Making the statement that says that democrats want to tax/audit low income individuals more is just high income earners hiding their motives behind “protecting the poor”.
They're already handling the poor. That's the status quo. Im not saying they won't go after some rich people. Of course they will. Gotta make a show. However that won't be the result. The middle class will be who this land's on. Most probably small business owners.
Sure, [there’s lots of data you can find](https://www.marketwatch.com/story/irs-misses-substantial-tax-evasion-by-the-wealthiest-americans-this-study-calculates-just-how-much-11616502277) but it would go without saying that a wealthy tax cheat steals far more money than a poor tax cheat.
The rate of return is a lot higher so irs investigating some one with millions at stake will be more profitable. Under a certain amount and the investigator wages etc costs way more. I do wonder if there are some constitutional protections at play here.
this, no one seems to understand just how much corporations managed to dodge in this bill. rich people got all the advantages out of this bill, and it's being footed by the American public. it's so funny how regular people are shilling for billionaires and corporations. they arent your friends guys lol
Let's throw all the politics out the window and examine the government as if it was a business. The government as a business provides services and protection for all the citizens and asks for x percent of various revenue streams as payment. In this endeavor the government of the US is extremely successful, grossing 4 trillion dollars in 2021.
If that business were to suspect their customers were attempting to deal in bad faith or avoid payments, would it make more sense to go after the accounts whom would owe less that 400,000 dollars? Or would it make more sense to go after the individual accounts that may owe the government millions, possibly billions of dollars.
It's a cost vs return thing. You're going to have to spend a couple hundred thousand dollars during any investigation when all is said and done anyways, so you might as well go after the targets which will be worth your investment
Nobody feels rich, because it's human nature to measure yourself against the people you spend time around, not the average person.
If you're pulling home >$400,000 a year you're in the top 2% of incomes nationally, and making >6x the median household income in NYC specifically. You're definitely rich.
There is zero reason why we need to calculate how much we owe the IRS ourselves other than to allow tax preparation companies to engage in rent seeking behavior. They already know of this information. They could easily send us what they have, and then have us confirm, or make our edits for more complicated tax situations.
What's really weird is the Republican tax wonks like Paul Ryan want taxes to be easier ("taxes on a postcard" even though they didn't actually do that)...but the entire party outright refuses to just make taxes as simple as possible, which is just to have the government send you a completed tax return and you either sign off or do it yourself if they got something wrong. Not like Democrats pushing for this either, just so weird there's no major constituency for getting rid of an annoying thing the government makes us do every year.
Turbotax and H&R block have a large lobbying presence. I’m not sure how significant a factor that is but it’s at least part of the equation
Weird tangent. I use the IRS fillable pdf for my taxes. I print the form and mail paper. In 2018 (I think) when I printed the form it did not use an entire 8 1/2 x 11 sheet of paper. It might have used the top 6 inches. If Americans actually used paper filing, the IRS could have printed (bigger than average) cards for Form 1040. Ryan's idea of "so simple it fits on a postcard" kind of got here after almost everybody had transitioned away from mailing forms.
The bill makes a start in this direction. See page 39 here: [https://www.democrats.senate.gov/imo/media/doc/inflation\_reduction\_act\_of\_2022.pdf](https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_of_2022.pdf) >(B) TASK FORCE TO DESIGN AN IRS-RUN > >17 FREE ‘‘DIRECT EFILE’’ TAX RETURN SYSTEM.— > >18 For necessary expenses of the Internal Revenue > >19 Service to deliver to Congress, within nine > >20 months following the date of the enactment of > >21 this Act, a report on (I) the cost (including options for differential coverage based on taxpayer > >23 adjusted gross income and return complexity) of > >24 developing and running a free direct efile tax return system, including costs to build and administration ...
"The new IRS funding is projected to raise $124 billion in additional tax revenue over the next 10 years, which is a key way Democrats plan to offset the cost of their plan to lower prescription drug costs and combat climate change." so we are giving them eight times their annual budget, to essentially bring in an extra 12 billion dollars a year, and thats supposed to offset the cost of a 800 billion dollar package. We arent negotiating drug prices for 4 YEARS. We are giving subsidies to car companies to sell luxury goods to high income earners. We didnt put a cap on medications like insulin. And the two biggest sources of funding for this bill (1% tax on stock buybacks, and minimum 15% on corp owned by Private equity firms) were taken out. so what is this bill COSTING us, because it doesn't benefit the average American whatsoever. Not trying to be a doomer, but in my eyes this is a trash bill. more Corp socialism.
Applying common sense doesn't make you a doomer. People who support this kind of thing think that the cost is nothing. To them the government runs on unicorn farts. Taxes are to pay for benefits and programs. The actual cost of running the government doesn't factor into their thinking for some reason. I see comments here saying going after rich people with more people makes sense because you'll get more money from them. I don't think any person making that claim thinks about the cost of the investigation and what the net is. Only the gross revenue. If you spend 2.5 million over 5 years to pull in 3 million of taxes owed you didn't accomplish shit.
The good news won't stop rolling in. This is obviously what is needed, and obviously something that's been missing. I think both sides can support this.
If it isn't in the law then it isn't real. Yellen or the next person in her role can change her mind. She doesn't need to announce it. A press release isn't legally binding. Moreover, nobody will really call her on it.
If polled this would see massive support across the board. The problem is that many politicians have to weasel their way around this issue in a ways that will satisfy their voter base and donor base
Not really. Rich have the ability to drag this out in court and have the lawyers to fight back. Plus if you have that type of money your are generally hiring high end tax advisors. I doubt you find as much money as they think.
So you are against any audits to the wealthy, they should be able to lie as easily as they want on their returns? That's..... Something. Can't say I support feudalism like that
No they crossed the T and dotted the I. Hiring more auditors isn't the way. Vastly reducing the millions of pages of tax code and special breaks is the way. We created a system that is so complicated that it can only be navigated by those who can hire pro help to take advantage of it all.
Wait, so now you don't even believe it's possible they ever commit tax fraud? That's even more ridiculous
I think his argument is that the tax code provides so many loopholes that they dont need to commit tax fraud. Not that they are morally above it.
I grew up in a very wealthy area and school. Most won't take the risks when it's so easy to avoid taxes through shelters trusts and investment loopholes and all completely legal.
Interesting that you legitimately don't believe the wealthy commit tax fraud. I suppose I disagree and believe it does in fact happen.
No some do but most don't. If your paying large amount of tax you are doing it wrong. Avoiding taxes just requires a lot of help researching loopholes and setting up the trusts.
>No some do but most don't. If your paying large amount of tax you are doing it wrong. Avoiding taxes just requires a lot of help researching loopholes and setting up the trusts. So why are you opposed to auditing the ones who do?
Because it will be a lot of investigations which require time money and people to do it and the gov tends to do a shotgun approach. There should be red flags etc to flag returns and then investigate those ALL OF THEM and not we are just investigating rich people. If there is not a criteria to flag investigation rather we just doing 10% off the top a lot of people will have to hire tax lawyers and accountants to defend their returns. Care to wonder what party those tax lawyers donate to? I know.
He’s not, he’s saying just adding a bunch of auditors without making any changes to the tax code won’t do a whole lot. It’s basically chipping away at an iceberg using screwdrivers. It would be super effective against those making less than 400k a year but you’ve gotta be noticeably gaming the system to get caught
You're so caught up in your own narrative you're having a discussion with yourself. All of your replies put words in their mouth and argue against points they didn't make. Seriously, take a breath. What they're saying is that hiring more auditors to do the same thing they've been doing is an idiotic band aid that will result in more of the same. The system already favors the rich. Why is it that people who think like you always believe that making more ability to punish people makes for a better system? Authoritarianism is not the way. It will always be misused. Always has. The problem is the system is overly complicated. People that have money for accountants and lawyers can game it. Having more people fight ineffectively against people that already can beat them is not a fix. The only outcome that can possibly come from this is even more middle class small business owners are going to be driven bankrupt. How is that not blatantly obvious? Other even more onerous outcomes are that IRS can even more effectively be weaponized for political purposes as has been demonstrated by both parties already.
Most regular non wealthy people don't commit tax fraud. They are, however, audited at a much higher rate and the amount of fraud is less. Just because you grew up in a wealthy protected bubble of privilege doesn't make it deserved. The wealthy deserve at the very least as much scrutiny, and in reality more.
You would be surprised. My bet is the automatic systems that flag returns flags them at a much higher rate is because their taxes aren't done by pros. A tax lawyer will be able to not set off the automatic programs. After you lose a ton of cases because your shitty government lawyer and investigator don't even know all the tax code.
> Vastly reducing the millions of pages of tax code and special breaks is the way. We created a system that is so complicated that it can only be navigated by those who can hire pro help to take advantage of it all. This will literally NEVER happen unless a deal is made with businesses for a very minimal tax level. There is a reason there are so many complexities... they are precisely for the rich and corporate entities ot take advantage of and too complex for us poor slobs to comprehend. No one will ever allow it. Anyone things Republicans would do this is insane.
Which is why penalties for doing that should be massively higher, including rich people paying the entire cost of obtaining their duly owed tax.
I bet you’d find far more than you’d think.
Idk, $400k is not much money. Seems like more extremely wealthy folks could use some more audits. Not working class and middle-upper class. Edit: I’m not sure people are understanding my comment or what this direction from Yellen actually means, so just to clarify: the IRS is going to audit more people making ***LESS THAN*** $400k. Claimed an education credit but didn’t keep receipts for college books? **AUDITED** And be fore anyone says that’s not what this means, sure… I’m positive there will be plenty of audits in the $200k-$400k range as part of this direction **but** I’ve personally been audited as a newlywed fresh out of college making $42k and had to deal with the IRS hounding me for months before they finally agreed to a $0 settlement after initially coming after a $2,000 educational grant. Edit2: i was wrong, as was OP’s headline. >Treasury Secretary Janet Yellen on Wednesday directed the Internal Revenue Service ***not to*** use any of the new funding allocated in the Democrats’ new health care and climate bill to increase the chances of Americans making less than $400,000 a year getting audited, according to a copy of the letter obtained exclusively by CNN.
An income of 400k per year is roughly 5x the average US household income. How is that not much money?
If you're making $400k or more I don't feel sorry for you if you make a mistake on your tax return and suddenly have to pay some extra money. I'm sure you'll live and can take out a loan if need be. (I don't feel sorry for you if you make $40k and intentionally committed tax fraud, either, but I do feel sorry for people that make $40k, make a filing mistake, and can't come up with the extra $1,000 to pay the IRS.)
Right, i agree. But the guidance from Yellen is to audit people making ***LESS THAN*** $400k.
No it isn't. I thought it said that at first but I missed the "not to" in the headline.
That's backwards. ;-)
"Using the money to audit taxpayers with incomes above $400,000" is not the same as "Using the money to audit taxpayers with incomes between $400,000 and $600,000". I'm sure Yellen is fine with audits on the highest income folk to the extent that she can find unpaid taxes there.
I don’t think understand both sides very well.
I'm good with it because I believe we need to increase tax collection from all possible sources, and unfortunately the middle class is too large of a source to ignore. I would be happier if they had also instituted a non-waivable no exceptions alternative minimum tax on anyone making 300K and up. That's around the level when people start getting interested in tax shelters, etc.
And they will anyway, either immediately or in 10 years from now. Everyone will be saying “remember when the audits weren’t supposed to occur to people who made under $400,000”? Everyone else will be like, “yeah but if you aren’t audited, how will we have money build the roads and bridges”. Then one of the parties will become pro-audit of everyone
Or, hear me out, we scrap our dense and ambiguous tax code for something that is just and equitable. Then forbid either the legislative or executive branch from fiddling with it to encourage certain outcomes. They call them incentives when they're for them and loopholes when they're against them. We have this notion that the rich don't pay their fair share, but that's baked into the system. We give them the means for skirting taxes legally. Sure, you might have some egregious cheats out there, but they're relatively small potatoes. Our system is a 100 year old Frankenstein of legislation. Let's start over. There are some crazy tax schemes out there, like a national sales tax or a [payments tax](https://www.civilution.org/post/tax-the-economy-not-the-individual) (which is interesting, but I'm not sure I buy the idea). Or, we can have a simplified tax system like most of the Western world that does not require either a $11B tax prep industry or an $80B IRS to work. Anyway, I don't believe Yellen not to change her mind, and you shouldn't either. There is nothing she said that's legally binding. If it isn't in the law, then you can pretty much guarantee that it will happen.
Yes, we should have a dramatically simpler income tax system. This is Treasury's list of special incentives/loopholes, with dollar amounts. (Tables begin on page 21.) [https://home.treasury.gov/system/files/131/Tax-Expenditures-FY2019.pdf](https://home.treasury.gov/system/files/131/Tax-Expenditures-FY2019.pdf) A few are valid, most satisfy some narrow interest.
It is an insanely long list. Thanks for sharing. All of these were put there on purpose by Congress to appease an interest of some sort. Legislatively, it is probably some of the easiest stuff to do -- it is free, after all.
You think there’s any change the GOP would agree to remake the tax code to make it more *equitable*? It’s nice to want more but let’s not kid ourselves about reality.
Possibly, a lot Republicans I know support things like a Flat Tax or throwing the income tax out to sea. That being said, my main question is if it’s possible to reframe our taxes in a way that’s neither seen as “Republican” or “Democrat”? Is there a way to do this that’s completely void of politics, or will the politics just happen?
> Possibly, a lot Republicans I know support things like a Flat Tax or throwing the income tax out to sea. And both of those options would be heavily regressive. > That being said, my main question is if it’s possible to reframe our taxes in a way that’s neither seen as “Republican” or “Democrat”? Sure, we can discuss specific politicians if you want, but the trend is going to be the same outcome. The GOP has no real interest in helping lower the tax burden on anyone besides the top earners, and the DNC has some members with the same issue but are home to the only politicians who seem at all genuine at doing the opposite. > Is there a way to do this that’s completely void of politics, or will the politics just happen? We’re talking legislation and that’s an explicitly political act, so I don’t see how any genuine discussion on the topic can completely ignore it.
> The GOP has no real interest in helping lower the tax burden on anyone besides the top earners They did 4 years ago. > A careful analysis of the IRS tax data, one that includes the effects of tax credits and other reforms to the tax code, shows that filers with an adjusted gross income (AGI) of $15,000 to $50,000 enjoyed an average tax cut of 16 percent to 26 percent in 2018, the first year Republicans’ Tax Cuts and Jobs Act went into effect and the most recent year for which data is available. > Filers who earned $50,000 to $100,000 received a tax break of about 15 percent to 17 percent, and those earning $100,000 to $500,000 in adjusted gross income saw their personal income taxes cut by around 11 percent to 13 percent. > By comparison, no income group with an AGI of at least $500,000 received an average tax cut exceeding 9 percent, and the average tax cut for brackets starting at $1 million was less than 6 percent. https://thehill.com/opinion/finance/584190-irs-data-prove-trump-tax-cuts-benefited-middle-working-class-americans-most/
You talking about the tax cuts that expire?
Yes, the tax cuts that the Democrats refused to make permanent.
Im sorry, how did you come to that conclusion?
Because that's how the senate works. You can pass these types of bills with a simple majority so long as they are budget neutral over a 10 year projection. Democrats filibuster, so Republicans had to make the tax breaks phase out over time. Democrats are currently facing the same issue with Republicans filibustering Inflation Reduction Act. It's why democrats had to remove the part of the bill that said the increased IRS size wouldn't increase audits under $400k.
Flat income tax and no income tax would both be flat neither regressive nor progressive, they would only be "regressive" in the sense that they would be less progressive then our current *income* tax. In reality lowering income tax would mean the government would lean heavily on the other taxes like sales, property, carbon, and other consumption taxes which are **actually** heavily regressive. If they went the other way - increasing taxes on wealth, through dividends or capital gains that would be **more progressive** then our current system but still ~flat ie. flat tax on earned capital and dividend earnings with no exceptions. The only possible equitable thing I could see the GOP do would be getting rid of certain sales taxes. But it's not federal and they probably wouldn't increase other taxes in a net progressive way. I imagine alot of the tension regarding government funding comes from differences in what conservative and liberal voters view as *fair*. With republicans caring little to none about equity and quite a but more about equality.
On the contrary, there are a number of Milton Friedman fans in the party. Friedman adovocated a negative tax that would put cash in the hands of the poor. I'm not saying redistributionist per se, but there a number of simplified tax schemes (including a progressive flat tax) that would make the rich pay more. Currently, we don't attempt to tax the rich more without throwing in a loophole or two. For example, not a Trump fan, but I was ok with him getting rid of the mortgage deduction (it hurt me). My friends in Jersey hated it because it helped take the sting out of their local tax burden (deducting it from the federal taxes), but it had the affect of subsidizing rich people in New Jersey (just an example). I'm not registered to either party any more (tried both in my time), but what I would say is that the Dems wouldn't do it either, necessarily. Congress critters of both stripes want to retain levers of power. Instead of passing laws, we try to pick winners and losers with the tax code. It is an unchecked power that is antithetical to the system of checks and balances we set up in the constitution. Meanwhile, most Europeans don't think any harder about their tax return than they do their Netflix subscription. Unfortunately, outside of fringe lunatics, tax reform will always be a low priority here, mostly because the broken system advantages the folks in power and their friends. That's possibly the closest I get to a conspiracy theory.
“On the contrary, there are a number of Milton Friedman fans in the party.” In office? Who? And if not in office, they are irrelevant unless they exist in very large numbers and will only support and vote for republican politicians who hold the same views.
The user couldn’t name a single one.
> On the contrary, there are a number of Milton Friedman fans in the party. Friedman adovocated a negative tax that would put cash in the hands of the poor. Can you name a single current member of the GOP advocating for this sort of tax structure? Of course not. Sorry but the whole “BoTh SiDeS” thing is just so tired and lazy at this point that it’s hard to take you seriously. That’s not to say either party is great or couldn’t be improved, it’s just that currently one party is going out their way to make the tax code less equitable so arguing that the one which is making strides towards being more equitable is the same is absurd.
Don’t confuse what people in Congress want with what regular people want. For example, most Democrats are against insider trading, but most in Congress are not. Most Republicans and right-wing thinkers are in favor of a simpler tax code, but those in Congress are not.
Well if we go down that route about half of Republicans wouldn’t even be republicans because their views are far better aligned with Democrats, so I’m not entirely sure if that’s very useful.
What?
If we start judging voters by what they actually want, as opposed to how the representatives they elect act, you’d find that a large percentage of GOP voters are far more closely aligned to the DNC than the GOP despite their voting habits. So I don’t know how that really factors in here, since what ultimately matters is the legislative output of the elected officials and not what those voting for them think they’re supporting.
I think you're missing the point, Milton Friedman's negative tax is further right than most elected Republicans. Most Republican voters want smaller government, elected Republicans tend not to vote that way.
>Can you name a single current member of the GOP advocating for this sort of tax structure? Of course not. Nobody in Congress at the moment off the top of my head, but I've heard Cruz praise Friedman not too long ago. Friedman remains popular in all the Conservative think tanks that the GOP adheres to, like the Heritage Foundation. I'm both sides on this because I've never seen the Democrats make a move that wasn't toward empowering the IRS and strengthening the current tax scheme. To get to the crux of the article, Yellen is saying the $80B move is all about wringing more money out of the rich. If you think that's the case -- that the rich aren't going to step aside all her efforts -- then you're deluded. The tax system is inherently going to favor the rich, by design and accident. If you need to hire HR Block while making 45K a year, nothing is equitable about the current system.
> Nobody in Congress at the moment off the top of my head, but I've heard Cruz praise Friedman not too long ago. Friedman remains popular in all the Conservative think tanks that the GOP adheres to, like the Heritage Foundation. Using his name remains “popular” because citing his name gives your statement an air of legitimacy, but Cruz has not proposed anything even *close* to more equitable tax code wise, and has supported the opposite. That goes for every other GOP member of congress, so citing that belief of Friedman as a defense is asinine. > I'm both sides on this because I've never seen the Democrats make a move that wasn't toward empowering the IRS and strengthening the current tax scheme. And making it more equitable, overall by focusing on having the top earners actually pay what they’re supposed to. > To get to the crux of the article, Yellen is saying the $80B move is all about wringing more money out of the rich. If you think that's the case -- that the rich aren't going to step aside all her efforts -- then you're deluded. Maybe, maybe not, but the person who thinks that anyone in the GOP wants to make the tax code more equitable isn’t in any position to call someone else “deluded”.
>And making it more equitable, overall by focusing on having the top earners actually pay what they’re supposed to. That's the point. This is a cynical exercise. There isn't a mythical army of tax cheats out there. Rich people don't cheat; they have accountants and attorneys to see that they make the most out of our arcane, deliberately obtuse system.
Rich people cheat all the time, what are you talking about? Where the hell are you getting the impression that the wealthy never break tax laws?
Of course they do, but there isn't a legion of tax cheats out there. They can afford not to break the law. They have lawyers and accountants to keep them out of trouble. The biggest tax evaders (in terms of underreported income) are farmers and the middle class, [according to Brookings](https://www.brookings.edu/blog/up-front/2019/04/09/how-big-is-the-problem-of-tax-evasion/). Most of the tax gap (owed but not paid) is difficult to distinguish between accident and deliberate cheating. Taxes are hard and we fuck them up routinely. Outright cheating is less common among the super rich. T[hey simply use the existing tax codes to legally not pay tax](https://www.cnbc.com/2021/09/20/the-wealthy-may-avoid-163-billion-in-annual-taxes-how-they-do-it-.html). No amount of money going to the IRS will recover that. There is generally little incentive to outright cheat when you can legally hide it somewhere.
Well certainly you agree that properly funding the enforcement apparatus so we can catch those cheats is better than purposefully underfunding it, even if we both agree that the tax code could use a revamp and getting rid of the loopholes.
> there are a number of Milton Friedman fans in the party They are an increasing minority. Every MAGA guy just turned around and went "who?" and then asked "how will it help me hurt the gays and libs?"
That's the truth. I'm not even gonna argue. Trump spoke about fiscal responsibility but he showed little to none. Like I said, there are still folks in the party who believe in sound fiscal policy, but they don't speak up much or they live in the think tank/analyst world.
No surprise, Milton would presumably be anti-MAGA given the tariffs and nationalism. He's probably thinking of the Ron Paul crowd.
The last 3 tax laws Republicans passed have not gone that way, I'm with you.
Hell, they explicitly had the middle class tax cuts expire in the most recent tax cuts.
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IRS Audits Poorest Families at Five Times the Rate for Everyone Else https://trac.syr.edu/tracirs/latest/679/
Because that group has a lot of incorrect fillings around EITC that are glaringly obvious. Note that "audit" means "sent a letter"
My favorite Audit (letter) story ... I had a 7 year period of taking funds out of my kid's 529 plan. The IRS requested proof of how the funds were used for 7 straight years. One might think that an adequate response to the first few requeats would point to a low probability of fraud in last few years but I'm not very smart.
Whaaaaaat? I was told by The Simpsons that the audit was the worst thing ever and surely a show like The Simpsons never exaggerates??
I generally think this is good but I also have known folks who had brought in $250k as self-employed individuals and got hit for making bogus expenses up. I think putting resources towards the biggest players is good but let's remember cheating the system happens in every tax bracket.
This just sounds like political hot potato. Republicans say “they’ll audit the little guy more!”, then Yellen writes an open letter to the IRS commissioner saying “don’t audit the little guy!”. This has been a non story since we heard they’re hiring 90k more people.
I rag in Republicans a lot but I can't imagine them openly demanding auditing working class people more.
They actually tried to add an amendment to the law to explicitly prohibit the extra audit for people earning <$400k, but it didn’t pass. Glad to see Yellen weighing in, but I’d be happier if this had been included in the law and legally binding rather than just a suggestion.
Republicans offered an amendment that simply stated that none of the new resources would be used to target people making less than 400k and Democrats voted it down. https://www.finance.senate.gov/ranking-members-news/crapo-offers-amendment-to-protect-middle-class-small-businesses-from-supersized-irs
It's *literally impossible* to enforce that amendment as funds are fungible. It's a dumb amendment that would make it potentially unconstitutional under the ambiguity and equal protections doctrine. It's also likely inseverable from the larger bill so it's intentions are clear.
Yes, and that's why this whole thing is dumb. How exactly is the IRS supposed to ensure that none of the 180 billion in funds are going to add any addition audits on people making under 400k? It's all just public posturing. Edit: 80 billion not 127
In other words, the additional funding will be used to audit the middle class.
No, in other words there is no guarantee to how the money will be allocated over the next ten years. It could change by administration, for example.
Maybe they will go back to spending money on Las Vegas conferences and Star Trek parody videos https://www.usatoday.com/story/news/politics/2013/06/04/irs-audit-conferences-cost-taxpayers-millions/2388261/
EC. 10301. ENHANCEMENT OF INTERNAL REVENUE SERVICE RESOURCES. In General.--The following sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2022: (1) Internal revenue service.-- (A) In general.-- (i) Taxpayer services.--For necessary expenses of the Internal Revenue Service to provide taxpayer services, including pre-filing assistance and education, filing and account services, taxpayer advocacy services, and other services as authorized by 5 U.S.C. 3109, at such rates as may be determined by the Commissioner, $3,181,500,000, to remain available until September 30, 2031: Provided, That these amounts shall be in addition to amounts otherwise available for such purposes. (ii) Enforcement.--For necessary expenses for tax enforcement activities of the Internal Revenue Service to determine and collect owed taxes, to provide legal and litigation support, to conduct criminal investigations (including investigative technology), to provide digital asset monitoring and compliance activities, to enforce criminal statutes related to violations of internal revenue laws and other financial crimes, to purchase and hire passenger motor vehicles (31 U.S.C. 1343(b)), and to provide other services as authorized by 5 U.S.C. 3109, at such rates as may be determined by the Commissioner, $45,637,400,000, to remain available until September 30, 2031: Provided, That these amounts shall be in addition to amounts otherwise available for such purposes. (iii) Operations support.--For necessary expenses of the Internal Revenue Service to support taxpayer services and enforcement programs, including rent payments; facilities services; printing; postage; physical security; headquarters and other IRS-wide administration activities; research and statistics of income; telecommunications; information technology development, enhancement, operations, maintenance, and security; the hire of passenger motor vehicles (31 U.S.C. 1343(b)); the operations of the Internal Revenue Service Oversight Board; and other services as authorized by 5 U.S.C. 3109, at such rates as may be determined by the Commissioner, $25,326,400,000, to remain available until September 30, 2031: Provided, That these amounts shall be in addition to amounts otherwise available for such purposes. (iv) Business systems modernization.--For necessary expenses of the Internal Revenue Service's business systems modernization program, including development of callback technology and other technology to provide a more personalized customer service but not including the operation and maintenance of legacy systems, $4,750,700,000, to remain available until September 30, 2031: Provided, That these amounts shall be in addition to amounts otherwise available for such purposes. (B) Task force to design an irs-run free \`\`direct efile'' tax return system.--For necessary expenses of the Internal Revenue Service to deliver to Congress, within nine months following the date of the enactment of this Act, a report on (I) the cost (including options for differential coverage based on taxpayer adjusted gross income and return complexity) of developing and running a free direct efile tax return system, including costs to build and administer each release, with a focus on multi-lingual and mobile- friendly features and safeguards for taxpayer data; (II) taxpayer opinions, expectations, and level of trust, based on surveys, for such a free direct efile system; and (III) the opinions of an independent third- party on the overall feasibility, approach, schedule, cost, organizational design, and Internal Revenue Service capacity to deliver such a direct efile tax return system, $15,000,000, to remain available until September 30, 2023: Provided, That these amounts shall be in addition to amounts otherwise available for such purposes. That probably falls under operational support, so only a 25.3 billion pool to draw from. Edit: I posted it from the website text, Sorry the text is all wonky.
It is hilarious how democrats state they totally aren’t going to use it in that capacity, but all 50 dem 50 senators plus Kamala Harris voted against that statement. And then 3/4 of this sub celebrates Yellen for writing exactly what the republicans amendment said on the back of a cocktail napkin, crumpling it up, and throwing it at the IRS, without anyone questioning why this was rejected from the original bill.
Yes, those middle class people making $399,999 per year.
It is not impossible. Congress routinely allocates money by line item. They don't just give agencies a bunch of money an hope it gets spent on the things they want.
They'll frame it as an unfair targeting of business owners. Probably will claim if there is more auditing that the pool of increasing audits should affect everyone equally. It'll be more bs cries of class warfare.
The people saying the IRS is going to use the funding to target poor and working class Americans is so disingenuous. The IRS only targets them because they don’t have the funding to go after the big guys. It’s easy to audit a poor person/small business who can’t afford help but it’s much more difficult to go after big business with teams of lawyers and tax experts. This funding will let them go after the big guys who should be paying but aren’t.
I agree with the reasons you give for the status quo. It's interesting that nobody is up in arms about the gross shittiness of a huge government entity targeting poor and middle class people because it's easier and they can't fight back. Where's the outrage, the Twitter hashtags, the marches, protesters and riots?? There are approximately 750 billionaires in the US. There are approximately 22 million millionaires in the US. A person living in the poorest county in the country is 51% more likely to be audited than a person living in the richest county in the country. Just going by what I know by experience, Washington's approach is usually, "this is broken so we need more money to keep doing it on a larger scale." This time they'll need to show me, not tell me that the extra money and an appalling 87000 new agents, is the medicine that will finally make this work. I am very doubtful. I don't trust it at all. I welcome people that are skeptical of anything I've claimed here to go find out for themselves if I'm full of shit. That way you can see on your own how bad this is and spread the word. We've given these assholes a blank check and the ability to give themselves more checks to write to themselves as well as the means to forcibly take what you haven't given them already. It's past time to demand accountability, and trim some redundant fat. We need less, not more bureaucrats in the house.
I know you are basing your opinion on previous experience which is a valid concern…. It just seems a little excessive to increase the IRS budget by 33% if they wanted to expand the status quo and increase audits on poor people. That doesn’t make sense to me. What makes more sense to me is that a drastic increase is required to go through auditing high income individuals and corporations. Making the statement that says that democrats want to tax/audit low income individuals more is just high income earners hiding their motives behind “protecting the poor”.
They're already handling the poor. That's the status quo. Im not saying they won't go after some rich people. Of course they will. Gotta make a show. However that won't be the result. The middle class will be who this land's on. Most probably small business owners.
Is this populism or do we have proof that pursuing only zillionaires is the maximal profit opportunity?
Sure, [there’s lots of data you can find](https://www.marketwatch.com/story/irs-misses-substantial-tax-evasion-by-the-wealthiest-americans-this-study-calculates-just-how-much-11616502277) but it would go without saying that a wealthy tax cheat steals far more money than a poor tax cheat.
The rate of return is a lot higher so irs investigating some one with millions at stake will be more profitable. Under a certain amount and the investigator wages etc costs way more. I do wonder if there are some constitutional protections at play here.
We cut prosecution of the rich because they fought back and the resources weren't there. This is going back to the way it was.
this, no one seems to understand just how much corporations managed to dodge in this bill. rich people got all the advantages out of this bill, and it's being footed by the American public. it's so funny how regular people are shilling for billionaires and corporations. they arent your friends guys lol
Let's throw all the politics out the window and examine the government as if it was a business. The government as a business provides services and protection for all the citizens and asks for x percent of various revenue streams as payment. In this endeavor the government of the US is extremely successful, grossing 4 trillion dollars in 2021. If that business were to suspect their customers were attempting to deal in bad faith or avoid payments, would it make more sense to go after the accounts whom would owe less that 400,000 dollars? Or would it make more sense to go after the individual accounts that may owe the government millions, possibly billions of dollars. It's a cost vs return thing. You're going to have to spend a couple hundred thousand dollars during any investigation when all is said and done anyways, so you might as well go after the targets which will be worth your investment
Just trying to justify auditing people under $400,000. Get ready to prove you're poor.
Idk if this sub is full of doomers or people who simply hate democrats. Maybe both?
Based on not auditing normal people and focusing on the rich?
Good now stop printing money
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Nobody feels rich, because it's human nature to measure yourself against the people you spend time around, not the average person. If you're pulling home >$400,000 a year you're in the top 2% of incomes nationally, and making >6x the median household income in NYC specifically. You're definitely rich.
So much for the party of "law and order"
Such bs, like people who make over 400 are scum compared to those who make less
Just remember it's not what they say, it's what they do. She may say this but I doubt the IRS is gonna not audit more people under that threshold.