Manchin kills tax agreement (and now unkills it - Inflation reduction act)

So when you said you were against "any" tax enforcement, you were misrepresenting your own position?

 

https://itep.sfo2.digitaloceanspaces.com/040221-55-Profitable-Corporations-Zero-Corporate-Taxes.pdf

If you can refute any of this, have at it.

To be fair, I think the issues with big corp tax avoidance (essentially shell games w/ foreign entities) has more to do with issues in the law and clever lawyers exploiting “opportunities” they know they have a good chance of winning, or at least making the case a complex one which is always harder to prove (that goes for white collar criminal fraud cases too, not just civil tax enforcement, the complexity is an obstacle to law enforcement who needs to make the case to a judge/jury in plain language).

I think changes to the actual code would probably be more efficient to get the big corps tax compliant (and that foreign minimum tax rate concept would possibly help with jurisdiction shopping and shell games). Simply hiring more agents is probably less to do with mega corporations, and more efficient at enforcing the law with mid-sized companies (including smaller public co’s) who may be loose with their books, also probably useful to go after those who try and do things on a cash basis to basically (criminally) keep things off book … drug dealers and such.

 

If the diet doesn’t start with less spending, fewer collections will only make a bad problem worse.

And if the IRS needs more employees, they should ask for them through the ordinary budgeting process.

While having small business tax cheats get away with fraud is unfair, while others don’t, hiring $80b of new agents will be a nightmare for small businesses either way. How many agents does $80b hire, anyway? Seems like it’d have to be 40-50,000 at an all in cost per year if $150-160k

Can you imagine how many honest businesses 40,000 additional agents will simply bother in a year, and how much additional costs these businesses will have to bear to prove their homework was correct the first time.

My 2021 tax return was almost 200 pages long because of the various partnerships I’ve interests in (as a sole proprietor, I’m in at least 15 different partnerships and my wife runs a small business). For the ones I manage, my accountant prepares the annual K-1’s for partners and entity tax returns. For the others I get a nice package in the mail each year that plugs neatly into my return. I know the ones I prepare are completely squeaky clean-nothing questionable is taken or assumed. For the others I assume the tax partner of those entities prepares them the same way. None of us want to get audited.

If an enterprising new agent saw my return, and all of its worksheets and supporting schedules, he could have a field day auditing me for months trying to find something that doesn’t exist (which would possibly ultimately lead to auditing the folks who send me the K-1’s that I don’t prepare) only to find we’ve done nothing wrong. Meanwhile it would take months of my time and a lot of $$ hiring either a tax lawyer or my accounting firm to walk through the audit. How many businesses like mine are out there?

Hopefully there will be some standard of materiality that comes with this.

Plus, the bulk of my compensation is now via carried interests in real estate deals. Not a full carry, but an interest that is promoted to a higher level than its proportion to my capital investment in a deal to compensate me for the time, effort and risk capital (personal) expended to find, qualify and get a deal put together, capitalized and out of the ground. And my interest is usually subject to certain clawbacks for busts, so it’s at risk until the end.

It’s very different model than the carried interest of a PE firm making investments solely with other people’s money and receiving a profits share with none of their own risk capital invested, and I’ve always advocated that the IRS not lump all carried interests in a single pile but to create separate piles and tax them each differently according to their nuance.

 

wrong year

 

to some, everything is a write-off. I know guys with $300k + boats and $150k trucks that they claim as 100% business expenses. Use the truck for work and personal, use the boat to take friends out occasionally and call it a marketing trip. Concrete guy takes framing guy to keys fishing for 3 - 4 days, marketing. Framing guy pays next time, marketing. Got a small office in your house, write off 80% of the SF of the house. All blatantly illegal. They know that there is little to no chance of audit and everyone they know does it too so there you go...

 

grossly understaffed and not taking advantage of computing and algorithms that can help them focus on the cheats

 

80% of the budget is mandatory spending. where to start? means test SS and medicare?

 

or they are routing profits thru tax haven countries and offshoring the funds waiting on a repatriation discount

 

I'm 100% for that but then what would politicians have to sell if not special tax treatment for their biggest and best donors?

 

Indeed, if rich people wanted a simpler tax code without a broad array of loopholes and exceptions we would have one.

 

We are talking about Federal Income Tax so you can't look at what they pay states or other countries. Go to the actual source. Click on Notes to Financial Statements and go down to Income Tax. In 2018 Amazon made 10+ billion yet received a tax refund. The same in 2017. Duke Energy is even worse for paying taxes

https://d18rn0p25nwr6d.cloudfront.net/CIK-0001018724/aa51b777-d45b-4f52-8573-737c255372ab.html#

 

Have you studied Amazon’s report?

 

See post #93

 

Party of law and order and patriotism wants to make it easy for tax cheats to get away without paying their fair share to live and operate in this country.

Maybe we should make taxes voluntary for everyone not just the rich and criminal? I’m sure that would end well.

 

Are you really asking why additional man-hours to go after fraud and abuse costs money? Because people don't work for free and aren't just sitting around doing nothing now.

 

if they find more fraud than their employment cost then they save money, but as far as I know, no one has done that calculation. Of course the deterrent of knowing there’s a better chance of getting caught means saving money too because less people will cheat (it’s the cop on the side of the road every once in awhile model).

 

The gains come from being able to conduct more investigations. The IRS is resource constrained. They can't just run an infinite amount of investigations with their staff. And the gains from more investigations are documented with data.