Tax Audits and Threats of Audits Are No Laughing Matter on.wsj.com/qoSXak– IRS not the enforcer of the Obama or any administration
— U.S. Citizen Abroad (@USCitizenAbroad) May 14, 2013
This must read article includes:
Our income-tax system is based on voluntary compliance and honest reporting by citizens. It couldn’t possibly function if most people decided to cheat. Sure, the system is backed up by the dreaded IRS audit. But the threat is, while not exactly hollow, limited: The IRS can’t audit more than a tiny fraction of taxpayers. If Americans started acting like Italians, who famously see tax evasion as a national pastime, the system would collapse.
One reason why Americans don’t act like Italians is that they see the income-tax system as basically fair in execution. A tax audit or a tax-fraud prosecution is still seen, usually, as evidence that someone has done something wrong. If it comes instead to be seen as “just politics” then the moral component of the system will be gone. For the system to work, people have to believe that it is fundamentally fair.
This is why the IRS is so strict with its own employees. Paul Caron, a professor at the University of Cincinnati who writes the TaxProf blog, noted in response to Mr. Obama’s remarks that the law calls for the termination of IRS employees who make audit threats for illegitimate reasons. He suggested that Mr. Obama’s “joke” might be grounds for firing if he were an IRS employee.
He’s not, of course, but as the president his words carry much more weight and he should be much more careful. That’s particularly true given that people still haven’t forgotten about the Obama administration’s other tax issues — the appointment of Tim Geithner as Treasury secretary despite an inexcusable failure to pay $34,000 in Social Security and Medicare taxes while working for the International Monetary Fund, and the scandals involving Tom Daschle and others whose appointments failed. (When the Geithner issue came up, news reports indicated that IRS employees were very upset. They can be fired over a simple late filing or a failure to report a mere $500 in income, making Mr. Geithner’s “pass” on much more serious questions quite demoralizing.)
He said pretty clearly that he wasn’t joking when he threatened the Jonas brothers with predator drones:
He and Timmy the Tax Cheat are one big bad joke
Things like this highlight the fact that there has always been a two-tiered system in terms of tax and penalty. What the Obama admin has done over the course of its tenure is demonstrate over and over that the connected and the wealthy are safe from being taxed too much or being penalized when they don’t pay the taxes they actually owe.
How the system remains afloat at this point is beyond my comprehension when so much evidence exists to point out to the average person that he/she doesn’t matter in the least as far as the govt is concerned. They are piggy banks to be raided and slaves to be subjected to whatever the whim du jour of the govt is.
If this doesn’t manifest into a big scandal that finally wakes Americans up, in my opinion, they are a lost cause. We should all just pull up a chair, pop some corn and settle in to watch the show. It’s going to be interesting but hopefully contained within their borders.
….”as the president his words carry much more weight and he should be much more careful. That’s particularly true given that people still haven’t forgotten about the Obama administration’s other tax issues — the appointment of Tim Geithner as Treasury secretary despite an inexcusable failure to pay $34,000 in Social Security and Medicare taxes while working for the International Monetary Fund, and the scandals involving Tom Daschle and others whose appointments failed. (When the Geithner issue came up, news reports indicated that IRS employees were very upset. They can be fired over a simple late filing or a failure to report a mere $500 in income, making Mr. Geithner’s “pass” on much more serious questions quite demoralizing.)
The notion that people who are audited are probably just “enemies of the regime,” coupled with the idea that big shots get a pass — that, as Leona Helmsley is reputed to have said, “taxes are for the little people” — is a recipe for widespread tax evasion.”……..
Or a recipe for mass renunciations by those forcibly deemed to be US ‘taxable’ citizens living entirely ‘abroad’ – who’ve already paid one set of taxes to the government of the country where they actually work, live, bank and may have been born.
The Hill: Paul: IRS staffers responsible for targeting should be fired
http://thehill.com/video/senate/299529-paul-irs-staffers-responsible-for-targeting-should-be-fired
I’m curious to know what side of the fence our 20 years IRS vet would choose to sit on.
Mopsick is on the side of the FATCA Compliance Complex.
You’re likely correct, Expat4ever. Mr. Mopsick’s last blog entry was two months ago reporting on the Miami FATCA Conference.
…and never more will he accept our comments.
@YogaGirl,
Correct — and I for one am so glad that I live on the other side of a US border. Wake up Americans?!!
The more I see Obama in action, the more I think of him as a TIC(K); a Tyrant-In-Chief. Yeah, sure, it could be construed as a “joke”, ha ha… but I’m not laughing. And I’ll cut straight to the point. He is a walking clusterf*** as a Commander in Chief.
Your moment of Zen…
http://www.thedailyshow.com/watch/mon-may-13-2013/moment-of-zen—the-nonpartisan-irs?xrs=share_copy
The usual low-levels will be rounded up. THe ones that created the mess, verbally, will remain and prosper, as always.
It wouldn’t be the first time that the IRS was used as an enforcement arm of a sitting administration. Meanwhile, one would think that the Americans would cry foul over this kind of shit by now.
I guess they really don’t care where it happens, just as long as it doesn’t happen to them.
Lost cause indeed.
“throw em all in jail” is the standard cry, from both types of wingnuts.
It should be no surprise that the US has the incarceration rates they do. Eventually the US will be one big jail.
The outrage will be that front-line IRS grunts, who need their jobs and so really had no choice, will be the ones losing their jobs, being prosecuted and going to jail. Those who gave the orders? Nothing will happen to them.
Will this stick to the WH or Obama? Heck no. His supporters couldn’t bear the disillusionment even though they probably all have whiplash from averting their gaze every time the guy breaks another campaign promise.
Homelanders are so well-trained. This kind of thing barely causes them to lose sight of what is really important – Dancing with the Stars, Angelina Jolie’s health issues and the new Star Trek movie opening this week. Priorities, people. Americans know what is important and they know their place.
@bubblebustin
The US was already feeling like a jail for the past few years or so before I emigrated in the beginning of 2012. And speaking of jails, Mark Twain, that is basically what they’re doing over there – throwing them all in jail.
Obama says he’s angry about this “The fact of the matter is, the IRS has to operate with absolute integrity,” the president said.” http://www.cnn.com/2013/05/15/politics/irs-conservative-targeting/index.html “The federal government must conduct itself in a way that’s worthy of the public’s trust, and that’s especially true for the IRS. ” ://www.theatlanticwire.com/politics/2013/05/white-house-irs-scandal/65264/ but the question is whether he’s angry that it has come out into the light, rather than angry at the behaviour of the IRS.
He pretends to care about the IRS treatment of political opponents, but has never acknowledged the plight of those prevented from renouncing due to being deemed incompetent – and the IRS punitive treatment of those with legal disability savings like the RDSP. He’s not ‘angry’ about the lack of IRS integrity fully evident in the OVD bait and switch – which the Taxpayer Advocate fully documented and reported to Congress. Or any other actions of the IRS – like threatening even minnows and ‘benign actors’ born and/or living ‘abroad’ into the ‘one size fits all’ OVD processes. Or the treatment of all those abroad who already pay taxes where they live and owe the US a great big zero, yet over a lifetime, are sentenced to prove annually to IRS satisfaction that they are not terror funders, money launderers, or tax evaders. Or the ongoing lack of IRS education of new immigrants to the US, who obviously all have legal post-tax assets and accounts that pre-date their US taxable status.
In his 2008 campaign, Obama pretended to care about US citizens living ‘abroad’ as a group identified as of special concern to him, but in the next campaign he dropped all mention of us. He has not supported or acknowledged Dem Carolyn Maloney’s bill for a Presidential commission to even just study the issues we have.
Obama is not angry about the IRS aggressive and unwarranted behaviour towards all those deemed ‘US taxable persons’ who were born and/or live entirely outside the US. Or the OVD bait and switch. He’s not angry after reading the reports of the Taxpayer Advocate – if he has even read them. He’s not angry that expats who use no US services and may never have set foot in the US are subjected to US double taxation, and confiscatory penalty regimes – even in the absence of any US tax owed. He’s not angry that US citizen children born and living outside the US cannot use RESPs or the like to save for a college education.
Why not?
@badger
The guy is a complete political animal and knows better than to bring up something that will make him look bad, especially in defending those who wouldn’t be under the attack they are without his past policies.
The skill here would be to introduce our issues into the flap that ‘s currently going on, to let THE TRUTH BE TOLD about what has happened to benign actors under OVDI, and the persecution of USP’s abroad under FATCA. Our mistreatment is an even more insidious violation of taxpayer’s rights than the Tea Party’s, imo. The success that IRS Commissioner Shumer claimed the OVD programs were having was nothing short of lie when he knew that there were many benign actors opting out or moving into Streamlined and taking their penalties with them, part of the same revenue he claimed the programs were bring in. Or did he consider us too insignificant to make a difference to the general success of the programs?
@bubblebustin, I think that they do not care about truth. Regardless of the protestations of Mr. Mopsick. IRS and Treasury were totally willing to continue to issue public statements that were exaggerations, threats and distortions. They never made any public corrections or clarifications even as the programs changed, and penalties were refunded to some. It will be very interesting to compare what they report as the total take in penalty figures a year or even two from now. The fact that they won’t break the total into penalties vs. actual taxes speaks volumes.
But as the mainstream media is not interested even in the true citizenship renunciation/relinquishment numbers, probably the IRS and Treasury can just continue to say whatever they choose – who will gainsay them? And what public attention or consequence will follow if they do?
Just repeating the same message over and over via the media is working for them. They don’t let truth or honor or ethics get in their way.
…and who’s responsible for providing the total cost accounting of the OVD programs, the GAO?
This on Rand Paul’s Facebook today:
“A column I wrote for CNN. Protecting citizens’ right to speak out against their government has always been an integral part of what separates us from tyrannical regimes. What the IRS did is how the KGB used to target dissidents. It is how they deal with troublemakers in China.”
Here’s the CNN article:
http://www.cnn.com/2013/05/16/opinion/rand-paul-irs-scandal/index.html
@badger, agreed about Obama. The present situation concerning Americans living abroad, which has been going on for years, is far more critical than the IRS current targetting. But, hey, if this wasn’t the case, then I might not have renounced. So, maybe I should thank Obama for liberating me?
@swisspinoy
Just as slavery was good for the slaves 🙁
Badger, you are right. He doesn’t care. His “anger” is all about the fact that his message and legacy are off track while he has to deal with another scandal. He should probably just get used to it. Bringing him down is all the GOP is interested in, which does and doesn’t bode well depending on whether or not you think that Congress accomplishing nothing between now and the mid-term elections is a good or bad thing.