Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

accountingtoday.com

Post reply on HN
Print view View original

291–300 of 319 posts

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

#291

Post by arcticbull »

toast0 wrote: post #186
arcticbull wrote: post #97

Earlier quoted context omitted.

The IRS sees maximum revenue at the point where everyone is paying their taxes as specified in the IRC. Anything short of that, people are evading taxes, intentionally or unintentionally. You are in fact arguing that the state shouldn't necessarily collect all it's owed. I doubt that attitude would get you far in the Accounts Receivable department at any business. It's different with police officers because the numbe…

> You are in fact arguing that the state shouldn't necessarily collect all it's owed. I doubt that attitude would get you far in the Accounts Receivable department at any business. Most AR departments will, in fact, be willing to write off some of what they're owed. There's a cost to pursuing the debts, both in employee time and in goodwill.

Sure, that's totally true, however that's clearly not what's happening here. The budget is 11B, down 19%/2.5B from peak. This yielded a reduction in collections of $34.4B. That's a 10X ROI. We're not talking about negative or marginal returns here, which is what an AR department would write off.

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

#292

Post by sgift »

fooey wrote: post #259
SkyBelow wrote: post #244

Earlier quoted context omitted.

It feels like voters are voting for pouring lighter fuel on the wood and throwing lit matches at the wood but vote strongly against having a bonfire. They want politicians to fix problems that they wanted the politicians to create and then don't want the actual fixes to the problems they want fixed.

Everyone is selfish Everyone wants to lower their own taxes by raising everyone else's taxes. 100 people in a room will have 100 different way to change the tax system, and every proposal will have 99 votes against it.

There's a reason business owners fear unions: They understand fully well that the wide majority of people have a different interest than them and if that majority are allowed to come together and realize that they will ask for things benefiting the majority to the detriment of the minority. Same with elections. Hence the age old strategy of divide and conquer.

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

#294

Post by MarkMc »

devoply wrote: post #6

> IRS is auditing fewer tax returns from corporations because it has fewer people and resources available to identify potential errors and follow up on questionable tax returns On one hand I do want businesses to pay their fair share. On the other hand I don't want to encourage massive tax agencies which must justify their numbers by auditing and harassing as many people as possible. Often small businesses that don't…

Can't we structure incentives to avoid that problem? Eg. If you audit a large corporation and expose major fraud you get a large bonus. If you audit a small business and find only only a minor infraction, then your bonus pool is reduced.

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

#295

Post by DanBC »

jacquesm wrote: post #203
DanBC wrote: post #159

Earlier quoted context omitted.

No, VAT is a tax paid by consumers.

The tax is levied on the businesses who collect it on behalf of the government, it is a direct function of the amount of the invoice. So if you charge your customer less for your goods or services the tax paid goes down. VAT is short for 'Value Added Tax', in other words that which a business produces. But if your business provides no value then magically you still have to charge VAT, so clearly there is a relationsh…

Businesses collect it, but it's not levied on businesses.

How do you explain the fact that businesses can reclaim VAT they've paid, but consumers can't?

The only explanation is that VAT is a tax paid by consumers, not by businesses.

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

#296

Post by moksly »

isoskeles wrote: post #290
moksly wrote: post #289

Earlier quoted context omitted.

> 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 meani…

I’m danish, those billions pay for our education, healthcare and daycare/nursery institution.

Most of the money went out of the country to heavy investment companies and hedge funds who exploited the fact that our vat-repayment system went from hundreds of auditors to just two people. Something we’re now battling international banks, investment funds and pension indexes to get partly back (at another great expense).

I’m not sure what society you live in, but this was such a negative impact on ours that even our most liberal political parties, who exist primarily because they want to cut taxes heavily, support re-staffing our tax-agency.

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

#297

Post by DanBC »

leetcrew wrote: post #197
DanBC wrote: post #159

Earlier quoted context omitted.

No, VAT is a tax paid by consumers.

are you making a claim about tax incidence or who literally pays the tax?

I'm saying who literally pays the tax.

A business buying from another business can reclaim the VAT.

The end usually consumer cannot.

VAT is a consumption tax.

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

#298

Post by londons_explore »

Rapzid wrote: post #247
jfengel wrote: post #206

Earlier quoted context omitted.

Is that the kind of thing that would show up in an audit? That is, if you're hiding millions of dollars, you're not just fudging the numbers. You've got a web of places to stash money that aren't directly connected to you. It would take a deep investigation of your finances, not just an audit.

I would be astonished if the IRS didn't use some sort of statistical analysis(AI) to trigger audits.

I hope they have third party data sources (banks, employers, stockbrokers, house/boat purchasers, etc.). By cross referencing the third party data with the contents of your return (automatically), they should be able to make a shortlist of people likely to be failing to declare something.

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

#299

Post by londons_explore »

chris11 wrote: post #200
gok wrote: post #174

Reading the actual study [1], the headline is a bit deceptive. The study looked at audits between 2000 and 2010, a period during which funding to the IRS increased, and found that generally more funding for audits led to more money recovered from audits (duh). But that $34.3B figure is over 10 years, so it's a tiny fraction of a percent of overall federal revenue, and it's not offset by the amount of more money the I…

> Also unmentioned is the very real negative externalities that IRS audits cause. Audits disproportionately affect poor people [2], who are also the least able to spend time dealing with them. The United States already has extremely low tax evasion rates [3]. Rather than spending money to catch more of the very few cheaters by audits, other country's tax authorities have found "nudge" letters were found to be similar…

The mandate of the IRS should not be to maximize tax collection, but to maximize economic gain to the United States.

I hope their internal models take into account the cost of an audit which finds nothing, both to the IRS themselves, but also to the audited and their family.

In fact, to make incentives align, maybe they should even pay those who are audited and end up owing nothing.

Post reply on HN