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IRS audits poorest families at five times the rate for everyone else

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Re: IRS audits poorest families at five times the rate for everyone else

#131

Post by ghaff »

jimbob45 wrote: post #24

There was talk during the Trump administration of bringing the tax code in line such that it could “fit on a large postcard” or something like that. That went out the window for the final bill. I have to imagine that tax simplification would provide as much benefit to revenue as boosting audit counts. I’m told in European countries that y’all have your taxes pre-calculated and sent to your homes? I’m flabbergasted th…

It probably should be for simpler taxes. Although if all you have is a W-2 and a standard deduction (and maybe a 1099), your taxes are pretty straightforward to file.

But things get complicated in a hurry in the US. My taxes aren't unreasonably complicated with only maybe a couple things that aren't pretty routine. And I still end up with a 1" thick sheaf of paper between federal and state taxes from my accountant.

Re: IRS audits poorest families at five times the rate for everyone else

#132

Post by washbrain »

tomohawk wrote: post #112
washbrain wrote: post #96

Earlier quoted context omitted.

Whew boy, no. Revenue Agents and Revenue Officers do not carry firearms. Revenue Agents perform audits and are not police. Take the tin foil hat off and quit spreading this FUD.

No tin in my hat. https://news.yahoo.com/irs-requires-special-agents-carry-130...

There exist armed officers in the IRS. They are called "special agents" in the "criminal investigation division". They are federal law enforcement, like the FBI, who seize assets in criminal tax fraud cases.

They are not the majority of hires, and they are not the ones doing audits, and I'm guessing they will be a tiny, tiny fraction of any IRS expansion.

My office building when I worked for Boeing had an armed security guard, that does not mean that if Boeing expands by 10k jobs that suddenly there will be 10k more guns in the factory.

So yes, your original post is clearly out of phase with reality.

Re: IRS audits poorest families at five times the rate for everyone else

#133

Post by albatross13 »

shkkmo wrote: post #60
albatross13 wrote: post #19

Earlier quoted context omitted.

>without requiring more funding I might be missing something here, but are you disregarding the 80bn the IRS just got for another 87,000 auditors? Or are we talking funding for something else?

That is funding that has just been allocated, the results of that funding obviously won't be seen in data that predates that funding..

>article about IRS auditing

>person I'm replying to is talking about funding for auditing

>IRS says they're going to hire 87,000 more auditors

Gee I wonder what the results will be.

Re: IRS audits poorest families at five times the rate for everyone else

#134

Post by llbeansandrice »

josephcsible wrote: post #2

There's one statistic that I didn't see but I'm now really curious about: what percentage of audits discover irregularities, per income level? If lower-income people are more likely than average to cheat on their taxes, then it makes sense to audit them more, but if they don't, then this is indeed totally unfair.

They're not cheating. It's because the EITC is complex so it's easy to make mistakes. Also because the IRS doesn't have the proper staffing to actually go after people that are richer and file yet more complex tax returns.

"Cheating" is a very loaded word to use here.

Increasing funding so the IRS can hire the proper staff to enforce tax-law across the board is the solution and it results in net revenue for the government. But the GOP consistently opposes these measures and is intent on hamstringing the IRS in its ability to audit higher-income households and businesses.

Re: IRS audits poorest families at five times the rate for everyone else

#135

Post by axus »

washbrain wrote: post #66
jeffwask wrote: post #39

The budget for the IRS has been continually slashed since Reagan despite all research on the subject showing increasing funding to the IRS funding increased revenue well beyond it's cost. The IRS has publicly stated on a number of occasions they do not go after the wealthy because they do not have the resources to win in the ensuing legal battles. This leaves the poor and middle class as the only groups they can targ…

This is 100% the story. The IRS can help make sure everyone is playing fair if we sufficiently fund them. And they can stop policing all the little issues and go after the big ones if we sufficiently fund them. AND sufficiently funding them is expected to increase tax revenue above the cost of funding them . It's the most obvious and should be the most bipartisan approach. It's introducing no new taxes, it's equitabl…

If dodging/bungling taxes were a Civil matter instead of a Criminal matter, it might be easier to get support for better enforcement.

Re: IRS audits poorest families at five times the rate for everyone else

#136

Post by usaar333 »

alistairSH wrote: post #81
PsySecGroup wrote: post #26

Earlier quoted context omitted.

A 2022 $400K/year threshold hits population A. With inflation, The 2023 population A is much larger. The idea of $400K/year being slated as a "minority of easy-to-dismissed wealthy" will be an important frame to keep alive as population A keeps growing due to inflation.

$400k is a 98% percentile income in San Francisco metro, DC metro, and NYC metro. Sure, inflation may increase the number of households earning $400k, but it's still a tiny minority of the population and will be for a long time.

> $400k is a 98% percentile income in San Francisco metro, DC metro, and NYC metro.

You care about household income, not individual.

https://dqydj.com/income-by-city/ gives 95th, not 98th in SF Metro area for household income. 92nd in Silicon valley.

Re: IRS audits poorest families at five times the rate for everyone else

#137

Post by jmyeet »

josephcsible wrote: post #111
jmyeet wrote: post #75

Earlier quoted context omitted.

> Is the IRS just supposed to ignore that? Yes. Or, better yet, just give it to everyone and pay for it by: 1. Eliminating the carried interest tax credit, which has somehow survived 15+ years. It is quite literally a giveaway to hedge fund managers who get to pay lower taxes on managements because reasons. It most recently survived by being removed from the Inflation Reduction Act at the behest of Senator Kirsten Se…

> In fact, auditing anyone who makes less than $50,000 a year should be illegal. Maybe even $100,000. Why would anyone who made under $50,000 or $100,000 ever bother to pay one cent of taxes if you did that?

For one, the vast majority of those people are W2 employees. Their taxes are withheld at source. Let that be whatever taxes someone pays.

Take it further: the IRS just gives you a form at the end of the year saying your income was $X and your taxes withheld were $Y. Sign here to get a refund or pay the shortfall (which, if withheld correctly, there should never be a shortfall).

That's actually how it works in most developed countries.

As for small businesses (the vast majroity of non-W2 employees), sure, audit them if they have been running a restaurant for years and weirdly have never drawn an income.

Re: IRS audits poorest families at five times the rate for everyone else

#139

Post by junar »

NovemberWhiskey wrote: post #11

The reason for this is almost entirely the Earned Income Tax Credit. The IRS estimates 21-26% of all EITC claims are improper. The rules are quite complex, which results in more errors and it is relatively straightforward for the IRS to detect certain classes of mistake or fraud through automation (i.e. to detect if the same child was claimed as a dependent by two different people on their return). Congress made the…

It's on Congress to fix the EITC, too. There are already detailed proposals to reform it [1], but nothing will change unless Congress has the will to do it.

[1] https://www.taxpayeradvocate.irs.gov/wp-content/uploads/2020...

Re: IRS audits poorest families at five times the rate for everyone else

#140

Post by jeffbee »

OrvalWintermute wrote: post #125
jeffbee wrote: post #70

Earlier quoted context omitted.

"Defund the Police" but for rich republicans.

In recent years after Reagan, both the Executive branch and Legislative branch have been dominated by the same party, at various times Congress | House | Senate | Presidency | Status 101st (1989–1991) Democrats Democrats Republican (G.H.W. Bush) Divided 102nd (1991–1993) Democrats Democrats Republican (G.H.W. Bush) Divided 103rd (1993–1995) Democrats Democrats Democrat (Clinton) Unified 104th (1995–1997) Republicans…

And yet, oddly, only one party has the platform of "drowning the government in a bathtub" which, if you think about it, is isomorphic with "defund the police".
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