This is like saying that you must be guilty if you decline to talk to the cops about a crime they’re investigating.
Yet it was a popular take among lefties on the ol’ Twitter machine this weekend. This guy’s musings made him the platform’s “main character” on Friday and Saturday.
All of my GOP friends who are worried about 87,000 IRS enforcement agents coming after the little guy… How about just don’t cheat on tax returns? A fully truthful and accurate tax return is bulletproof in an audit. I never understood the fear of an IRS audit. Don’t lie. Period.
— Adam Markowitz (@adammarkowitzEA) August 5, 2022
Democratic Sen. Ben Cardin went a step beyond Markowitz in an interview this weekend. According to Cardin, not only do the innocent have no reason to refuse to talk to the cops, they should also logically support expanding the police force dramatically.
“Can you understand how 87,000 new IRS agents would scare the heck out of millions of Americans?”
Democrat Sen. Ben Cardin: “If there’s no reason to be fearful, and if you paid your taxes and if you complied with our laws, you should want to make sure everyone else does that.” pic.twitter.com/xRwSes2CrC
— RNC Research (@RNCResearch) August 7, 2022
Didn’t we *just* see a very high-profile example of the IRS harassing a non-billionaire with an intensive audit that ended up with him owing the feds nothing? A month ago, the Times wrote about the curious cases of James Comey and Andrew McCabe, each of whom was somehow selected “randomly” for an intensive audit that only one in every 30,000 Americans is targeted with. That coincidence led many to suspect a political motive behind the audits, a case of Trump and his loyalists abusing the IRS’s power to exact revenge on the “deep state,” but that’s probably not what happened. What did happen, however, was plenty onerous for the Comeys even if the motives behind the audit were pure:
In the case of the Comeys, it cost $5,000 in accountant fees. The I.R.S. agent conducting the audit spent at least 50 working hours on it, including meeting face to face with the family’s accountant, who drove several hours to meet the agent, according to internal I.R.S. documents produced in response to a Freedom of Information Act request filed by The Times.
Along with having to produce all of his personal financial information, like brokerage and bank statements, Mr. Comey gave the I.R.S. a copy of his family’s Christmas card that had a photograph to prove that he had the children he had claimed as dependents.
The audit went so deeply into his finances that his accountant had a back and forth with the agency about how much the Comeys had spent on office supplies purchased more than two years earlier. In a series of documents the accountant provided to the I.R.S. in February 2020, the accountant said that Mr. Comey, originally going by memory, had provided far too low an estimate about how much he had spent on them.
In the end, the feds concluded that they owed Comey $347. So much for having nothing to fear if you’ve paid your taxes.
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The type of audit to which Comey was subjected was unusual in that it was random, designed for research purposes rather than investigating suspected wrongdoing. Cardin would doubtless say that the many new IRS agents who’ll be hired under the Inflation Reduction Act will focus strictly on the bad guys, but that’s more of a wish than a command. Maybe the agency will use its new windfall from Congress to expand the number of Comey-style research audits. Or maybe they’ll just keep doing what they’ve been doing, which is to audit the hell out of middle-class people for penny-ante sums while the rich use their armies of lawyers and accountants to shield their wealth. WaPo:
The idea is that the government could bring in more money by examining corporate and high-income returns than it does by pursuing lower- or middle-income taxpayers who make mistakes on their returns or underpay their taxes by small amounts. The IRS in recent years has grown more dependent on those types of audits because they are relatively inexpensive: They’re automated, and they preserve the agency’s limited personnel resources. But they also mostly fall on taxpayers who can’t afford to fight back by spending hours on the phone with the tax agency or hiring lawyers.
The result is that the IRS’s prolific enforcement capabilities — which bring in on average better than $10 in revenue for every $1 spent pursuing audits — are often trained on the most economically vulnerable taxpayers.
More than half of the agency’s audits in 2021 were directed at taxpayers with incomes less than $75,000, according to IRS data. More than 4 in 10 of its audits targeted recipients of the earned income tax credit, one of the country’s main anti-poverty measures.
Democrats complain that the agency was forced to target middle-class taxpayers by the austere budget conditions imposed on it by GOP policies in the recent past. It needed to bring in revenue, it didn’t have the manpower to go to war with the Elon Musks and Jeff Bezoses of the world, so it squeezed Joe Sixpack. We can all see where the new, more muscular IRS is headed, though:
“Let’s go after sophisticated taxpayers with armies of accountants and lawyers”
*years of costly litigation with diminishing returns*
*congressional pressure to improve returns on enforcement spending*“Let’s go after the normies”
— Scott Lincicome (@scottlincicome) August 7, 2022
John Hinderaker notes that enforcement mechanisms against the rich have already begun to slide before the bill has even passed. Thanks to Kyrsten Sinema, the carried-interest loophole that Joe Manchin wanted to close will remain in the legislation. Good news for hedge-fund bros! Bad news for you and me as the IRS looks to make up that revenue somewhere else.
I’ll leave you with this. It’s funny ’cause it’s true.
If you ever doubt that you can change your path in life, just remember that this person went on to become the Senate’s top defender of hedge funders and private equity #inspiring #inspiration pic.twitter.com/dG7li95DqZ
— Dan Amira (@DanAmira) August 8, 2022
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