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IRS budget cuts cost $34.3B in lost revenue from big business

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281–290 of 319 posts

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#281

Earlier quoted context omitted.

I think you have it backwards. The biggest companies that are already avoiding taxes can justify the lawyer costs to do it again. Besides, they typically already have dozens of subsidiaries that are largely invisible to most employees and business partners. This is just adding more reasons to do so. (Source: have worked on subsidiary taxonomy of large companies before, not for tax purposes, and from the outside there…

You know how your bank is required to report any transaction to FinCEN in excess of $10,000 on what's called a CTR, or currency transaction report? Some enterprising criminals decided to break up their deposits into two $5000 transactions to avoid this. So naturally, they made that a crime called structuring [1]. I don't see why it wouldn't be illegal to break up your company into a thousand subsidiaries to evade tax…

> I don't see why it wouldn't be illegal to break up your company into a thousand subsidiaries to evade taxes

It could be illegal, but this isn't the same as comparing a few timestamps. You'd need to dive into WHY the subsidiaries exist to determine that they weren't "legal" structures.

> Even if you asked them, it wouldn't be hard to come up with legal reasons

And as I said, they might be! There are probably many reasons to split up an organization that aren't CURRENTLY worth the effort. But this suddenly makes it worth the effort and they already have the justification.

The details of what these justifications are can be interesting, but are largely specific to each entity. Here is one general example: if you have a business presence in every state, boom, 50 subsidiaries already there. Come up with a few other bogus reasons and you can easily rack up entirely legal subsidiaries that on the surface, seem like intelligent organizational choices.

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#282
post #225

Earlier quoted context omitted.

This seems absolutely insane. > For those making less than $25,000, the audit rate fell 0.02% (to .69%) from 2017 to 2018. Frankly, for it to be significantly above 0 seems grossly inefficient. I would assume that average rate of return for public money spent on auditing a millionaire is... a fair bit higher than that spent auditing someone earning 25k.

It’s not insane at all. Note that’s AGI - adjusted gross income. If we stopped auditing those with AGIs less than $25,000, then all I’d have to do is take enough deductions (retirement contributions, unreimbursed business expenses, medical expenses, loss from property sales, tuition, etc) to get my AGI below $25,000 and I’d never have to worry about being audited. Ever. One way to significantly reduce your taxes is t…

Or we could just NOT use AGI and just use total income or some other metric which doesnt allow this stupidity.

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#283
post #256
post #45

Earlier quoted context omitted.

Last week I saw a person on Facebook sharing an anecdote patterned after the "welfare queen" trope and arguing against food stamps. I noticed from her Facebook page that she owned a ranching operation, so I searched her name in the EWG Farm Subsidy Database and saw that she and her husband had received $18k in subsidies in 2018, and nearly $250k since 1995.

Is your logic that a dollar is a dollar and it doesn't matter why the government gave it to them? If so, I don't agree.

What are you trying to say? He is remarking on the ignorance / hypocrisy of the woman, who laments when other people receiving government subsidies as "welfare queens" disregarding the fact that she is also receiving government subsidies. Likely due to her own biases, that her subsidy is worthwhile while another person's isn't for whatever reason.

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#285
post #181

Earlier quoted context omitted.

The latest IRS changes prioritize low income over high income audit targets: https://www.google.com/amp/s/www.forbes.com/sites/rachelsand...

This seems absolutely insane. > For those making less than $25,000, the audit rate fell 0.02% (to .69%) from 2017 to 2018. Frankly, for it to be significantly above 0 seems grossly inefficient. I would assume that average rate of return for public money spent on auditing a millionaire is... a fair bit higher than that spent auditing someone earning 25k.

How do you know they’re actually making less than $25K without audits?

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#286
post #225

Earlier quoted context omitted.

It’s not insane at all. Note that’s AGI - adjusted gross income. If we stopped auditing those with AGIs less than $25,000, then all I’d have to do is take enough deductions (retirement contributions, unreimbursed business expenses, medical expenses, loss from property sales, tuition, etc) to get my AGI below $25,000 and I’d never have to worry about being audited. Ever. One way to significantly reduce your taxes is t…

That's an alarming equation. The harder you lie, the less likely you'll be called out on it. What else in life works that way?

Politics ;-)

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#287
post #262

Earlier quoted context omitted.

> That is money being stolen from the treasury. Actually, that is money being stolen by the treasury from the business owner.

No. Taxes are not theft. Taxes are payment for services. Failure to pay is theft.

Your use or non-use of public services has no bearing on the amount you must pay in income tax.

Failure to pay taxes is illegal, not theft.

Theft is stealing the property of another. If income is the product of your physical labor, and the state owns your productive output (making tax avoidance theft, as you propose) then you are a slave.

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#288

Earlier quoted context omitted.

There is a big difference between the things your comment calls services and, e.g., Netflix's streaming service: namely, it is relatively easy to cancel Netflix's streaming service, and after I cancel, I no longer have to pay.

You can cancel your USA membership too - just renounce your citizenship and move to a service you find more appealing. Then you no longer have to pay.

Not so fast. You not only have to pay a fee to renounce, but your leaving is contingent upon approval by the state.

So, no, you can't "just leave" if you don't like it.

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#289

Earlier quoted context omitted.

What a weird argument. The other person says "hey, look, we learned that cutting this service had a negative effect on our country, and we learned from our lesson" and your response is "Well then make everyone part of that service" What? How does that make sense? Why are you making that drastic of a leap? Why?

How doesn’t it? You didn’t address a single point here. Many government agencies make no money, as they’re not profitable organizations (I’d argue the entire government is de facto a non-profit organization but that’s a separate argument). The few that are able to make money would typically do so for their own ends (like taxing gasoline for maintaining roads). The IRS is one of the few organizations that generates in…

> If your tax-agents aren’t needed, then downsize them,

I mean, maybe I could have put it more clearly, but I think it is fairly obvious that I wasn’t advocating for what you seem to think.

I’m just not sure what strawman you’re trying to prove wrong here, or who you’re even arguing against. Unlimited funds to tax-agencies is silly, everyone agrees on that, but in both the original and my example, the result of downsizing staff to save a few million on the budget ended up costing society billions.

Re: IRS budget cuts cost $34.3B in lost revenue from big business

#290
post #289

Earlier quoted context omitted.

How doesn’t it? You didn’t address a single point here. Many government agencies make no money, as they’re not profitable organizations (I’d argue the entire government is de facto a non-profit organization but that’s a separate argument). The few that are able to make money would typically do so for their own ends (like taxing gasoline for maintaining roads). The IRS is one of the few organizations that generates in…

> If your tax-agents aren’t needed, then downsize them, I mean, maybe I could have put it more clearly, but I think it is fairly obvious that I wasn’t advocating for what you seem to think. I’m just not sure what strawman you’re trying to prove wrong here, or who you’re even arguing against. Unlimited funds to tax-agencies is silly, everyone agrees on that, but in both the original and my example, the result of downs…

Society didn’t lose out on billions, the government did. Whether or not that is bad is definitely a discussion worth having, but I won’t immediately conflate the two ideas. People and corporations got to keep money they may have otherwise lost due to auditing.

At a glance, I am okay with that, and the arguments put forth so far don’t really convince me otherwise, like the number of dollars per IRS employee is a meaningless metric to me because it doesn’t tell me what’s optimal for government.

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