The Republicans on the House Ways and Means Committee took another whack Thursday at a Biden Administration proposal to force banks to report to the IRS on their account holders’ private annual aggregate financial activity.
The administration has repeatedly pushed back against its critics who claim the initiative will lead to banks reporting individual transactions to the IRS. Opponents of the initiative say that no matter where the threshold for reporting is $600 as originally put forward or $10,000 as it is now, the reporting of aggregate data will still act as a trigger for more audits.
Experts in tax policy say that even at the $10,000 level, most Americans could still expect to have their private information turned over to the IRS. What the Biden Administration wants targets people who are not payroll wage earners, meaning tradesmen and women, independent contractors, farmers, and others who do not get paid a set wage every two weeks.
“Democrats’ IRS surveillance scheme is not about going after high earners and wealthy corporations, but instead is about going after working Americans and Main Street job creators — who Democrats assume are tax cheats,” the committee said in a release that also identified the top ten ways to get yourself surveilled by the IRS:
Despite the apparent levity of Thursday’s release, the issue remains serious. The government’s increasing desire to surveil private activity using the new technologies made available by Big Tech is worrisome. Privacy, as we have known it for most of our lives, may become outmoded yet there’s a practical side to this too.
The revenues needed to pay for Biden’s big government Socialist agenda aren’t there and the higher taxes included in the Bernie Biden budget resolution won’t generate them. under the current tax code. Remember, the latest analysis says the new spending and benefits included in their proposal is nearly twice as big as the $3.5 trillion over ten years is advertised as being. That’s a lot of money — and thinking you can find it by upping the number of audits is like saying it can be found between the couch cushions. The increased reporting to the IRS to trigger more audits exists primarily so the politicians who want to spend more money enlarging the welfare state can say it’s paid for. If instead, we fined politicians for telling lies, the budget would soon be balanced with plenty of money left over.
The Biden plan for building America back better has a pretty hefty price tag attached to it. It includes $3 trillion in new and higher taxes, more government regulation, and creates a framework through which Washington bureaucrats will be making essential decisions about which industries survive and which ones die as we move further into the new century.
All that’s bad, but that – as Senate Budget Committee Chairman Bernie Sanders has said about the $3.5 trillion in new programs and spending that will constitute the biggest growth in government since the Great Society under Lyndon Johnson – is only the beginning. The era of big government is back only this time it’s coming as big government socialism and, instead of embracing the free enterprise economy that made America great, Biden and company are taking their cues from the British Labour Party circa 1960.
Now, this is not the first time Biden has “borrowed” something from the Brits and it probably won’t be the last. What people fail to understand is how much more intrusive the government will have to be as we “build back better” to fund all these new programs and to make the American public go along whether they want to or not.
One proposal that stands out in this regard is the constant effort by the Biden Administration and congressional Democrats to secure more funding for the United States Internal Revenue Service. At one point, before it was stopped, a serious proposal was moving through Congress to add $80 billion to its budget so it could hire an additional 80,000 agents. This provision was scored as a revenue raiser, meaning those who were proposing it did so with the idea that more agents mean more audits and more audits mean more money because the IRS will catch more people cheating on their taxes.
For the moment the increase in funding for the IRS looks dead, so the Biden Administration is pushing to catch so-called tax cheats in other ways. Another idea still very much under consideration would require banks and other financial institutions to report business and personal transactions they conduct on your behalf to the IRS if they involved an amount greater than $600.
If that sounds like a gross, possibly unconstitutional invasion of privacy, you may be right – but you also may not be able to do anything about it. The government is routinely notified about transactions above $10,000 – a provision put in place during the so-called hot years of the war on drugs – setting a precedent that has been affirmed by the courts.
There’s something inherently sinister about the idea of your local banker being forced to report your account data to the IRS any time you write a check or send money by wire or over the Internet to bail a kid on spring break out of trouble or pay your mortgage or health insurance premium. Some things are none of the federal government’s business.
Under the initial Biden-backed proposal, the IRS would receive annual reports of account inflows and outflows of $600 or more, which may be less intrusive than a play-by-play, day-by-day account of how you spend your money but it’s no less disturbing. White House’s estimates have the policy when implemented generating about $463 billion in additional revenue over the next decade but, to some, that’s not the point of the exercise. Consider the letter sent to House Ways and Means Committee Chairman Richie Neal, D-Mass., by Treasury Secretary Janet Yellen and IRS Commissioner Chuck Rettig asking for support for the plan “to help the agency increase enforcement and recover more in uncollected taxes.” It’s language like that that signals there’s an increase in audits coming even if they don’t lead to an increase anything like the projected growth in federal revenue from them – as will likely be the case.
If it all sounds pernicious, it’s because it is. The policy is predicated on the presumption that most Americans – the working class and the small businessmen and women especially – are cheating on their taxes. That’s insulting, never mind that it ignores the presumption of innocence around which our judicial system (but not the federal tax courts) is organized. Making Tax Day an even bigger nightmare than it already is is not the way to, as the president puts it, “build back better.”
By Fred Lucas • The Daily Signal
The Internal Revenue Service rehired 213 employees who ducked taxes, falsified documents, were convicted of theft, or made unauthorized use of taxpayer data, an inspector general’s report says.
The Office of Treasury Inspector General for Tax Administration, which also first discovered the IRS’ targeting of conservative groups in 2013, examined the agency’s hiring from January 2015 through March 2016.
For these 15 months, the IRS official in charge was Commissioner John Koskinen, an appointee of President Barack Obama. Continue reading
By Post Editorial Board • New York Post
Why is IRS Commissioner John Koskinen still in office? A growing number of Capitol Hill Republicans want to know — and they have good reason to be troubled.
When he took over in 2013, Koskinen was supposed to “fix” the IRS — and in particular get to the bottom of the scandal in which the agency deliberately held up approvals for 75 conservative and Tea Party groups that had applied for legitimate tax exemptions.
Instead, what Congress and the public got from him was obstruction, open defiance and a refusal to discipline anyone at the agency. Indeed, he seemed most concerned with running interference to shield the Obama administration from any embarrassment. Continue reading
by Ali Meyer • Washington Free Beacon
The Internal Revenue Service has located 6,924 documents potentially related to the targeting of Tea Party conservatives, two years after the group Judicial Watch filed a Freedom of Information Act lawsuit for them.
The watchdog group intended to find records regarding how the IRS selected individuals and organizations for audits that were requesting nonprofit tax status.
The agency will not say when it will make the documents available to the public. Continue reading
by Alexander Hendrie • Americans for Tax Reform
IRS Commissioner John Koskinen will appear before the House Judiciary Committee to defend himself against impeachment charges following his role in the Lois Lerner targeting scandal.
Koskinen was appointed to lead the IRS after promising to bring transparency and openness to the embattled agency. He has failed.
The IRS failed to search five of six possible sources of electronic media for Lois Lerner’s emails, according to documentation released by the House Oversight Committee in July 2015.
Over the course of investigations into the Lois Lerner targeting scandal, Commissioner John Koskinen repeatedly assured Congress that he would provide all of Lois Lerner’s emails. But based on testimony from the Treasury Inspector General for Tax Administration (TIGTA), this did not occur. The agency’s ineptness — or corruption — resulted in 24,000 Lerner emails being lost when they were “accidently” destroyed. Continue reading
The IRS now says it has recovered a hard drive belonging to a former top employee, months after the agency admitted it had erased the data despite the existence of a preservation order.
The hard drive belonged to the agency’s former director of transfer pricing operations at the IRS Large Business and International Division, likely a key employee involved in the agency’s controversial, taxpayer-funded hiring of elite white shoe law firm Quinn Emanuel.
Earlier this year, the IRS quietly announced it had erased this hard drive, despite a preservation order borne from a Freedom of Information Act (FOIA) request.
Under pressure from Congressional investigators, IRS chief John Koskinen last month said that the agency had discovered a backup of the employees’ hard drive. Now, the agency has changed its story a third time, saying it has discovered the employee’s hard drive.
Given the constant feet dragging and changing stories, it is likely the IRS would never have recovered this hard drive without pressure from Congressional investigators.
While this story again proves the ineptitude of the IRS, of bigger concern to taxpayers should be the agency’s decision to hire an elite law firm to perform audits. There is no reason the agency should be hiring costly outside counsel that has zero experience protecting sensitive, confidential taxpayer data.
Unfortunately, this is exactly what happened when the agency hired elite law firm Quinn Emanuel under an initial $2.2 million contract despite the firm having never even conducted an audit.
Not only is this wasteful, it is also unnecessary. The IRS already has access to around 40,000 employees responsible for enforcement. The IRS can also turn to the office of Chief Counsel or a Department of Justice attorney, both of which have the expertise to conduct this kind of work, without risking sensitive information.
This hiring decision was described as “troubling” by a federal judge and prompted a probe by Senate Finance Committee Chairman Orrin Hatch (R-Utah).
Ultimately, while this decision appears to be reckless and unnecessary, it appears not to break any laws.
But regardless, the IRS should not be allowed to spend taxpayer resources on an unqualified trial law firm given the agencies record failing to safeguard taxpayer data and using its power to target taxpayers for their political beliefs.
IRS tax code totals 2.4 million words and additional regulations total 7.7 million words
by Ali Meyer • Washington Free Beacon
“One often overlooked issue in tax reform is complexity,” the report states. “For decades, the tax code has become more and more detailed, with thousands of additional pages of statutes, regulations, and case law. This added complexity imposes a real cost on the U.S. economy.”
The Internal Revenue Service (IRS) tax code in 1995 totaled 409,000 words and since then it has increased to a total of 2.4 million words.
In addition to the tax code, there are 7.7 million words of tax regulations and there are 60,000 pages of tax-related case law, which accountants and tax lawyers use to decide how much their clients must pay. Continue reading
by Ethan Barton • Daily Caller
A government accountability group is suing the Internal Revenue Service (IRS) and Commissioner John Koskinen for allegedly violating federal law by regularly deleting official records as part of an agreement with its government employee union.
The IRS has an agreement with the National Treasury Employees Union that prohibits the agency from saving any instant message records of its employees, documents obtained by Cause of Action Institute – the group suing the IRS – show.
Federal laws, however, require the agency to preserve such records. The federal tax agency has been the focus of a continuing scandal.
“The IRS and Commissioner Koskinen have a legal obligation to preserve official work communications between employees,” Cause of Action Institute President and CEO Alfred J. Lechner Jr. said in a statement. “It appears that federal records are being deleted because the IRS, in a deal with its employee union, refuses to preserve certain types of electronic communications.” Continue reading
By Stephen Dinan • The Washington Times
Judge David B. Sentelle of the U.S. Court of Appeals for the D.C. Circuit said there is strong evidence that the IRS violated the constitutional rights of the groups when it delayed their nonprofit status applications and asked inappropriate questions about their political beliefs.
The agency’s insistence that it has retrained employees and instructed managers to behave better did not mollify the judges, who said past IRS behavior doesn’t lend itself to the benefit of the doubt.
“It’s hard to find the IRS to be an agency we can trust,” Judge Sentelle said. Continue reading
by Susan Jones • CNSNews.com
“We have recently learned…that IRS employees that have been fired for misconduct have been rehired” in the last several years, Rep. Kristi Noem (R-S.D.) told a news conference on Tuesday.
“Now some of this may involve falsifying documents — they failed to pay their own taxes. They may have been fired for accessing sensitive taxpayer information without permission. In fact, one employee had missed up to eight weeks of work without permission, had actually stamped on their personnel file, ‘Do not rehire’ — and the IRS chose to rehire them.”
Noem said Congress gave the IRS an opportunity to address the issue, and “they have stated that their policies are fine and are currently working for them.” Continue reading
Audit finds increasing problems with customer service and tax fraud
by Ali Meyer • Washington Free Beacon
The IRS has answered only 15.6 percent of customer service calls during the 2016 tax-filing season so far, according to testimony from the Treasury Inspector General for Tax Administration.
As of Feb. 27, 2016, there were 40.5 million attempted calls on toll-free assistance lines to contact the IRS. Agents answered only 6.3 million calls, or 15.6 percent of the total. After the call was routed to the call center, customers waited on the phone for 9.6 minutes before they were able to speak with an agent.
“For the IRS toll-free lines, there have been long customer wait times, resulting in abandoned calls, and customers redialing,” states the inspector general. “Despite other available options most taxpayers continue to use the telephone as the primary method to contact the IRS.” Continue reading
By Jay Sekulow • FoxNews.com
Americans spoke out. And the Internal Revenue Service (IRS) listened.
A new regulation proposed by the IRS would have some nonprofit charities report the Social Security numbers of donors giving at least $250 in one year. The regulation would permit, but not require, charitable organizations to file a new, separate information return (in addition to the Form 990) to substantiate covered contributions. The new informational return would require the charity to collect an individual donor’s name, address, and Social Security number, and provide a copy to the donor.
I first sounded the alarm about this problematic issue last month. At the American Center for Law and Justice, we strongly opposed this regulation, filing comments with the IRS explaining why such a move would be damaging by undermining consumer and taxpayer protections, and likely result in reduced charitable giving.
Many others opposed the proposed regulation, too. Nearly 38,000 people filed comments online – the vast majority opposing the move. Continue reading
by Alexander Hendrie • Americans for Tax Reform
Although there was a court preservation order on all documents related to the IRS hiring of the outside firm, the hard drive was erased anyway. The order was borne of a Freedom of Information Act (FOIA) request submitted by Microsoft.
Even though the white shoe law firm has zero experience handling sensitive tax data, taxpayers have been footing bills of over $1,000 per hour for its services. Continue reading
The IRS is abusing its authority once again by employing the help of a private law firm in its case against Microsoft.
By Peter Roff • USNews
If there is one federal agency that has clearly run amok during the Obama administration, it’s the United States Internal Revenue Service. From the harassment of tea party groups applying for nonprofit status to the defiance of congressional subpoenas, it’s an agency badly in need of a thorough housecleaning.
IRS Commissioner John Koskinen is already under threat of impeachment by the U.S. House of Representatives. That might be a good start, but removing him won’t fix the problems any more than the ouster of his predecessor did. The problems run too deep. Congress needs to act, not just by stepping up oversight of the tax collectors but by jerking their chain and narrowing their authority.
From top to bottom the agency is engaged in a wholesale abuse of its authority – and is defying attempts to investigate what it has been doing. Groups on the right are still reportedly having their applications for tax-exempt status slow-walked through the process. Confidential data is still leaking out and the auditing process is out of control. Continue reading