The IRS plans to crack down on 1,600 millionaires to collect millions of dollars in back taxes
The IRS plans to crack down on 1,600 millionaires to collect millions of dollars in back taxes
The IRS is launching an effort to crack down on 1,600 millionaires and 75 large business partnerships that owe hundreds of millions of dollars in past due taxes.
IRS Commissioner Daniel Werfel said that with a boost in federal funding and the help of artificial intelligence tools, the agency has new means of targeting wealthy people who have “cut corners” on their taxes.
“If you pay your taxes on time it should be particularly frustrating when you see that wealthy filers are not,” Werfel told reporters in a call previewing the announcement. He said 1,600 millionaires who owe at least $250,000 each in back taxes and 75 large business partnerships that have assets of roughly $10 billion on average are targeted for the new “compliance efforts.”
Conservative SCOTUS ruling making taxation of the wealthy unconstitutional in 3... 2...
I wonder, given the whole equal protection thing….
Could we sue the IRS for damages? I mean, this is the fed government’s revenue. Them running out of money…. And running up the debt affects us negatively….
They actually are about to review an interesting case which could have huge tax ramifications:
It's hard to summarize but basically they're trying to decide if part of the 2017 Tax Cuts and Jobs Act is constitutional or not. It's the part requiring taxpayers to pick up income for their share of income earned internationally that hasn't been repatriated yet, essentially unrealized gains. This has broad implications on whether a wealth tax on unrealized capital gains (looking at you, Musk and Bezos et al) would be constitutional under the 16th Amendment which only authorizes an income tax.
I haven't done a deep dive on that case though so I could be wrong, comments welcome.
Can't wait for people in red states making <$50k to be really mad about this for some reason
For some reason? They're just looking out for their future self. Any day now they too will be millionaires. Any day...
It's just millionaires they are going after. If you get upset about this, clearly you don't think you have what it takes to become a billionaire.
Good but can we also do the billionaires?
No. They're just going to do it to people who have exactly 1 million dollars.
They won't go after those from fear or being defunded further..
Conservative's are agreeing to go after millionaires just to anger their base, the poor who think they'd be millionaires if it wasn't for all this "socialism".
Token victims chosen to placate the masses.
Millionaires are still fucking peasants to the ruling class.
There's surely a name for when people react with disdain to even the slightest move in the right direction.
"Should have done it earlier" "Not enough" "It'll probably get shot down in court" "Why bother"
and 75 large business partnerships that have assets of roughly $10 billion on average are targeted for the new "compliance efforts."
From the article.
Anyway, I think billionaires are millionaires. Have to be to have billions. Which is to say, I doubt they're not targeting billionaires too and that I'm thankful that AI will help the IRS keep the rich accountable.
Grover Norquist, who heads the conservative Americans for Tax Reform, said the IRS’ plan to pursue high wealth individuals does not preclude the IRS from eventually pursuing middle-income Americans for audits down the road.
Lol love the complete lack of evidence with just a big ol dose of non sequiter fear-mongering, they MIGHT come for you next!!
how is it any different from now, when they come after us and NOT the rich? Like we never stopped getting policed that was rich privilege only, and only because of the complicated tax structures that open up to you once you start a business that has some cash throughput
total fear-mongering like you say
Yeah the tax structure already favors the wealthy in many ways, so the idea that more enforcement of existing laws on the higher end is somehow hurting the middle class is just laughable.
I love that Republicans seem to have fully embraced a fear campaign based in the idea that if the rich can be forced to obey the law that yOu mIghT bE nExT as though they aren't also the people who gave police broad, sweeping powers to kick in our doors for any or no reason, to seize our money and then make us prove that we didn't commit crimes to get it, to engage in warrantless mass surveillance, to establish huge swaths of America where the 4th amendment just doesn't count if you "look like an illegal immigrant", to establish fetus checkpoints at state borders, to make a dog's opinion legally admissible in court if and only if that dog thinks you've committed a crime, and they're trying to let the police into your bedroom to make sure you're fucking correctly (in a cishet christian way).
We who have been overpoliced our entire lives know what they mean when they say "they might come for you next". They mean that the police might overstep their bounds as thieftakers and thugs to keep the minorities in line and start coming for Real Americans (cishet white men) just because of a few little felonies.
Wow, that was wonderfully said.
100% agree, these are the same people who said about the patriot act that if you don't have anything hide you've nothing to be afraid of. Or, he should have just complied or he wouldn't have been murdered by the cops. Etc
Love the fear mongering for something that A) already happens, B) shouldn't be an issue for people that are in the up and up and C) should be music to the ears of members of the "law and order" party.
But but but doesn't the IRS just make stuff up and take your money?
I didn't catch that part at first. Give me a friggin break. What a load of FUD.
These are probably the same people who say if you don't have anything to hide you've nothing to be afraid of.
I'm a cpa, and from what I can tell I'm the only one on Lemmy, god help me, so I'll chime in.
Partnerships with $10 billion assets are no joke so I would imagine they are businesses like real estate holding companies, hedge funds, private equity, venture capital, things like that. Probably clients of a Big 4 like PWC Deloitte EY or KPMG.
The thing about entities like that is that they tend to be insanely complicated with TONS of moving parts. They'll be dealing with complex financial instruments, partners coming in and out, financing structures that aren't at all straightforward (if you've seen Shark Tank Mr Wonderful is infamous for offering complex financing deals rather than straight equity deals) plus international tax complications, book/tax timing differences, and all kinds of other stuff I can't begin to get into.
Oh, and that's just the tax side of it all. That's not even starting to talk about the actual accounting, recording the transactions, balance sheets, income statements, and so on, which is an enormous layer of complexity before we even think about tax. Zillions of moving parts with plenty of room for errors and omissions.
Partnerships don't pay tax at the business level so the individuals who own them need to report the income and activity on their personal returns and pay tax at that level. It's not at all easy reporting their share of activity from entities like hedge funds and PE so plenty of mistakes are made, some quite substantial. Im guessing they are going to look at the partnerships first and compare to the biggest owners returns to make sure everything jives.
I find this news great. Our industry often faces challenges due to time constraints, budget limitations, client-provided data quality, logistics, and so on. Unethical behavior is rare among practitioners, but there are some shady ones. Typically, we defer issues, leaving them for others to handle, which seldom result in consequences.
Throughout my career, the IRS has never questioned our filed returns for individuals or businesses. We've received notices, mostly related to administrative matters rather than full audits.
A strengthened IRS enhances compliance, but the accounting industry is strained with few professionals and a lack of future talent. We already cut corners for efficiency, so aiming for flawless accuracy could pose a significant problem. It's just another challenge to add to our list...
My spouse works for compliance and usually you are given a chance to right everything before it goes as far as being audited. Like you said, mostly administrative issues is taken care at the first level and it’s no biggie.
So if someone is being audited something is already very wrong and the first level folks have sent the case to audits or even criminal investigations.
Sort of. The IRS has an office of criminal investigations which is more equivalent to like an FBI raid with armed agents going to your home or a business and seizing your shit, maybe making arrests. I've personally never seen this or even heard of it second hand, but I've read about it. It's extremely rare and as you said you usually have ample opportunity to deescalate before it gets to that point. Overall though the term audit is just a third party reviewing your work for accuracy, which could be a simple smell check review, or a long laborious process going dumpster diving with a microscope looking at everything. It's unclear from the article what this is going to be.
My issue with the taxman is that they have created and continue to allow those complications which only the rich can use, and therefore are elitist rules.
I wish the feds would/could go back to a basic tax structure based on wealth/income alone ... where there's nowhere for the rich to hide.
The thing is, much of the complexity is directly in response to the stunts jackasses have pulled over the decades, to prevent that from happening again.
Complexity aside, focusing on sheer logistics, to do a true full scale 'drop your shorts and cough' audit, the auditor would need to cross-reference receipts and bank statements to financial statements, then to the business returns, and follow it all to the individual owners.
That's a colossal task, and it's just too much work, not enough time to do it, and not enough qualified people to do it. Hopefully AI can assist in streamlining this process significantly in the future but who knows.
I'm glad you're here! We need more people than just tech people lol.
Deeply appreciate you taking time out of your day to write an opinion on this (career related) news!:) you're doing your part.jpeg
My pleasure, I'm a huge nerd for this stuff and tax is super complicated obviously. Happy to help people understand. The more people understand in the general the easier my life is, lol
This guy accounts
Thank you!
Does the gaps inside the flaws of accuracy often incur fill ins black market entities?
I'm sorry, I don't understand the question. Can you rephrase please?
In totally unrelated news: the GOP has announced war on the IRS; "too long have they preyed upon this nation's most vulnerable!".
Announced? It's been in full swing for ages.
https://www.cnn.com/2023/01/23/politics/irs-fair-tax-republicans-abolish/index.html
why exactly isn't it normal to get taxes from the rich?
I heard an interview about this new effort. IRS agents used to be rewarded by case count. It's much easier to audit people who earn salaries because you know exactly what they earned from employers' reports. Rich people often have many sources of income that take time to investigate. Agents audit normal folks because it's easy while the rich lie and get away with it.
The goal with this effort has been to change the incentive structure for agents to get the most money.
The more money a person makes, the more incentive and capability they have to design and structure their income, especially if they are a business owner or have customers overseas, and thus they have more opportunities to avoid doing the things that cause one to be taxed.
Also some are cheaters and just don't pay what they owe.
Compliance means that if you made a mistake, the IRS will give you a chance to correct it. And if you decide not to fix it? then they come for your shit.
If you don’t want them to come to take your shit, FOLLOW THE FUCKING LAW. So simple!!!!! Isn’t that how it’s supposed to be?
These right wing nut jobs are something else. Haha.
Control the laws, and make yourself immune. They have no concept of things needing to be fair, only self-enrichment. They are sick people with a deep pathological drive to enrich themselves at any cost. Wealth is an addiction on top of that. The combination has shaped human society for millennia.
"Plans to" ? okay...
So basically doing their job.
So, they weren't doing it before? What the hell have they been doing this whole time?
Because the IRS has continuously had its budget cut, most extensively under Trump
Good. Please do pay one's taxes and pursue those that do not.
If Wesley Snipes can do time for not paying taxes, so can some of these other millionaires.
Tax the snot out of these greedy hogs.
Tee hee.
Healthcare won't be a bad idea !
OK Daniel, and what are you going to do with these millions? Free healthcare? improve education?
It goes into the gov budget, out of scope for him
Another pointless article to distract from the bigger issue. Spending is out of control and collecting this won't help to pay that down. It'll only contribute to more spending. Neither side are helping to do anything about it other than lining their own pockets.
The term "spending" is bullshit for most governmental expenses. Maintaining infrastructure, education, healthcare and social assistance are investments. Educated healthy people, that can recover, if they are affected by a job loss or other major struggle are a much better workforce than sick, indebted and uneducated people.
Call it whatever you want. The unlimited piggy bank just needs to stop. They all need to be held accountable for every dollar spent as a start. End the corporate lobbying bullshit and have the government public servants actually serve the public. Not your comment but the one above about centrist shit, I don't care about the petty squabble of which side does what. They are both bad. I'm not into picking the lesser of two evils.
The only problem with spending is that too much of it is to prop up dying and damaging industries like oil, and not enough of it is being spent to actually invest in the future of America. We should spend more, on things like free healthcare, free education, free public transportation, and universal basic income.
How about we stop spending billions on subsidies for oil companies?
Oh shut up. One side spends like crazy, then uses that as an excuse to try to gut the other sides programs. F off with you centrist bull