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

241–250 of 319 posts

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

#241

Post by cr0sh »

MuffinFlavored wrote: post #83
metamet wrote: post #78

Earlier quoted context omitted.

Elizabeth Warren has set this up as the core paradigm in her campaign. She posits that greed and corruption have overtaken the American government's purpose, especially in the last 25 years. Money, through lobbying and other forms of influence, now dictates who the government works for. It works for large corporations, pharmaceuticals and the oil industry (for example) rather than America's citizens and workers--spec…

I read her plan to tax businesses with $100m in profit is easily sidestepped by spinning off child-subsidiaries of your businesses right around that $100m mark and report back "womp womp, no over $100m profits here".

One would think there'd be a way to combat that ala structuring, like they do with reporting cash transfers of $10k and over.

In other words, if you try to do multiple $9999.00 transfers in an attempt to "fly under the radar" - you will be caught out.

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

#242

Post by [deleted] »

ptero wrote: post #81

IRS budget cuts seem to be thrown around a lot, but to me this is just a symptom of the real problem -- a tax code that is way too complex. Years of congress pandering to special interests, fixing minor issues with pages of new tax rules and no implementation accountability (implementation and enforcement is dumped on IRS) brought US tax code to a state that can overwhelm any staffing levels. Simplifying tax code wil…

[deleted]

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

#243

Post by chris11 »

gok wrote: post #222
chris11 wrote: post #200

Earlier quoted context omitted.

> 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…

Audit based on size of underreporting? That's like saying only buy winning lottery tickets. You don't know how accurate a tax filing is up front; that's why there are audits.

That was worded a little badly. The size of the company, and the size of the tax return should impact the chance of an audit. Intentionally lying on your tax return and saving 5% is a lot different with 100 million than with 10,000. The IRS should also prioritize audits that look fraudulent.

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

#244

Post by SkyBelow »

asciident wrote: post #124
ptero wrote: post #81

IRS budget cuts seem to be thrown around a lot, but to me this is just a symptom of the real problem -- a tax code that is way too complex. Years of congress pandering to special interests, fixing minor issues with pages of new tax rules and no implementation accountability (implementation and enforcement is dumped on IRS) brought US tax code to a state that can overwhelm any staffing levels. Simplifying tax code wil…

Simplifying would be great, but it's not really possible to do because you won't get the exactly same tax distribution with a simplified set of rules. So politicians will frame it as "why do you want to raise taxes on single moms?" and "why are you taking away the deduction for teachers?" and "this bill hurts vulnerable people who have been hit by natural disasters." So any suggestion to simplify the tax code is a no…

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.

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

#245

Post by twostorytower »

silexia wrote: post #239
f5thesystem wrote: post #236

Earlier quoted context omitted.

The trick is to die before that day comes.

Check the New York times reporting on Fred Trump and Donald Trump. It is clear to elites that just outright breaking tax law has no repercussions. More and more wealthy people are understanding this, and will not pay or will underpay taxes. It's critical that taxes be enforced uniformly and in every case.

You can even break tax law and become President!

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

#246

Post by microcolonel »

asciident wrote: post #124
ptero wrote: post #81

IRS budget cuts seem to be thrown around a lot, but to me this is just a symptom of the real problem -- a tax code that is way too complex. Years of congress pandering to special interests, fixing minor issues with pages of new tax rules and no implementation accountability (implementation and enforcement is dumped on IRS) brought US tax code to a state that can overwhelm any staffing levels. Simplifying tax code wil…

Simplifying would be great, but it's not really possible to do because you won't get the exactly same tax distribution with a simplified set of rules. So politicians will frame it as "why do you want to raise taxes on single moms?" and "why are you taking away the deduction for teachers?" and "this bill hurts vulnerable people who have been hit by natural disasters." So any suggestion to simplify the tax code is a no…

It would probably work in a time where the marginal rates are too high to begin with. If we get a Democrat in the white house in 2020, then 2024 or 2028 may be the year of tax code simplification. ;- )

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

#247

Post by Rapzid »

jfengel wrote: post #206
pwinnski wrote: post #187

Earlier quoted context omitted.

Except that auditing involves tax return in which the IRS has suspicion that there is more income than claimed, right? So of all the people who reported income of less than $25,000, the IRS apparently believed that 0.69% of them actually had income of much, much more. Maybe millions.

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.

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

#248

Post by microcolonel »

corybrown wrote: post #205
RyanAF7 wrote: post #42

Earlier quoted context omitted.

Oh! The one that found success with the Laffer Curve. Right. Freedom isn't an idea. It's an actual place. In terms of kingdoms a free peoples kingdom is a Freedom; and you don't have to pay someone for the right to exist. Oddly enough we agree, there is a faction in the US pursuing its own agenda.

> The one that found success with the Laffer Curve Care to explain? The most recent tax cuts that were supposed to pay for themselves haven't. So where are we on the Laffer Curve right now?

Hard to measure both over long and short timescales, since so many factors affect the willingness of people to invest personal effort and risk toward earning.

You might have more success looking at the amounts while attempting to control for more factors; but of course, you could make it worse, because statistics is hard!

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

#249

Post by microcolonel »

conanbatt wrote: post #53
corybrown wrote: post #5

Earlier quoted context omitted.

There's a faction of US politicians that are philosophically against (most) government and taxes. It's not about ROI, it's about their goals.

This faction of the US is unique, which is why the US has some of the lowest tax rates in the world and in consequences has one of the most positive balances in net immigration, specially considering it has one of the harshest immigration policies in the world.

The U.S. is by any good measure somewhere between #1 and #3 in median individual income net of taxes and other mandatory transfers; and always #1 in the mean.

I think a lot of people look at the gap between the mean and median, and think that something must be going wrong; but to me, the inequality of outcome this measures is more a sign that America is a welcome home of extremely productive people and the smarter of their direct offspring, who inevitably earn ridiculous sums of money when and where doing so is not itself reviled.

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

#250

Post by ljm »

joelx wrote: post #207
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…

As a high net worth business owner, I know a lot of wealthy people. They will simply follow prevailing trends on tax... If most of their peers are avoiding or just not paying tax, they will do the same. It is incredibly important that tax laws be strictly enforced or wealthy people will simply not pay. Pretty much only form letters should be used for low income people.

At some point you can become wealthy enough that a good accountant is cheaper than paying a good proportion of the tax, in which case it’s not a case of ‘not paying tax’ any more, it’s a case of maximising profit.

The poor can’t afford to do anything but not pay tax, the rich can pay for all kinds of tricks to hide their money from the government while paying some paltry, but still seemingly legit, portion of tax.

Post reply on HN