Current IRS Administrator Charles P. Rettig decided to write an opinion piece meant to soothe and convince those making under $400k that they will not be targets of the IRS expansion, but, can’t quite say that they won’t be targets. Don’t forget that in tax cases, you are guilty until proven innocent
IRS sets the record straight: We’re going after tax evaders, not honest Americans: Op-Ed
As the nation’s tax administrator, the IRS plays a unique role in our nation. It can be a difficult job. After all, does anyone really like paying taxes? Of course not. But they’re essential to fund the roads we drive on, the schools our children attend, support our military and so much more. Unfortunately, given the nature of this work and historical stereotypes, the IRS is often perceived as an easy target for mischaracterizations of what IRS employees do — and that’s exactly what’s happened in recent weeks.
The recent debate over providing badly needed funding to the IRS is filled with outright false suggestions about what the agency and our hard-working employees do — as well as how the additional resources will be handled.
The bottom line is this: These resources are absolutely not about increasing audit scrutiny on small business or middle-income Americans. The investment of these important resources is designed to support honest, compliant taxpayers. Our investment is designed around a Treasury directive that audit rates do not rise relative to recent years for households making under $400,000.
We all want a fair and impartial system where everyone contributes their fair share, no more and certainly no less. A robust, visible tax enforcement effort focused on high-end tax evaders and those supporting them is a priority. Underpayments by tax evaders shift the burden of operating our great country onto honest, hard-working Americans who follow the law.
Focused on high earners, but, not exclusively on. There’s going to be a whole lot more people making underpayments who make less than $400k, be it small businesses or individuals.
With this new law, honest taxpayers will see badly needed, meaningful service improvements at the IRS. The IRS should be able to answer the phones and process information — including tax returns — in a timely manner. Enhanced IT systems and taxpayer services will mean that honest taxpayers will be better able to comply with the tax laws, ultimately resulting in a lower — yes, lower — likelihood of being audited and a reduced burden on them.
It works the other way, with all those extra employees being able to go through everyone’s tax filings with a fine tooth comb. You’re making $50k a year and blew off filing on the 1099 income of a $700? They’ll find out. Rettig goes through some “falsehoods”, which, really, are mostly just political talking points, including
False Statement: The additional funding will be used to hire more auditors to “shake down” average taxpayers.
Reality: False. Wage-earning taxpayers like firefighters, construction workers, teachers and police officers are among the most compliant taxpayers, given that their incomes come from Forms W-2 and 1099. These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans. Instead, the additional resources will also be focused on large corporate and high net-worth taxpayers to enforce laws already on the books that the IRS does not have enough resources to pursue.
What, exactly, does “audit scrutiny” mean? The IRS doesn’t need to go full bore with an audit, they can simply pull out that fine tooth comb for the small business owner. Don’t forget, a lot of small businesses have gross profits of over $400k a year, but, their net is much lower than $400k. Those large corporations and high net taxpayers have very good accountants and lawyers to make sure they’re in compliance, along with paying as little as they can per the tax code.
False Statement: This new funding will allow overreach by the IRS, putting agents on every street corner and prying into people’s personal financial lives.
Reality: False. This funding will allow the IRS to better serve the nation’s taxpayers — and ultimately meet the critical needs of our country. Our employees care and, like others in government, take an oath to support our country. We take pride in hiring veterans, people with disabilities and people from all walks of life and from every corner of our country. Many of our employees, including myself, are members of a military family. And all of our employees reflect the taxpayers we serve.
An oath like those at the FBI with their differing structure of investigation and justice? How about when the IRS targeted conservative groups? Which they admitted to? Does anyone seriously trust the IRS? Or the government? You can find all sorts of examples when the power of the federal government went after one of the little people, because it’s a whole lot easier than going after the rich and powerful, be they individuals or companies.
A couple of the comments at the article
- In their eyes, everyone is guilty though because with the myriad or rules and regulations there must be a mistake in there somewhere even if it’s only $1. And they know it.
- To a hammer, everything looks like a nail. To an IRS agent, everyone looks like a “tax evader”. How about meaningful tax reform instead?
- With the ridiculous complexity of the tax code, anyone can be a “tax evader”. There are way too many gray areas, especially if you have a small business. They will be going after everyone.
- This is utter nonsense. Once the IRS system identifies a potential discrepancy they go after everyone, regardless of income. The rich have lawyers and accountants protecting them. The little guy is at the mercy of a typical government bureaucrat.
- After talking off record to several IRS agents, they laugh at the notion that people make mistakes. Everyone is guilty. They will let you know about an error two years later after penalties have been multiplying without your knowledge. Giving them more power will only make it worse.
That last one is rather important, because those penalties from simple mistakes can turn into serious money. All those extra employees will allow the IRS to find all those minor errors the middle and working class folks made by accident. The IRS doesn’t need you to come in to be audited: a simple letter will do.
Read: IRS Administrator Fails To Specifically Say Those Making Under $400k Will Avoid The IRS »
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