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Sunday, October 23, 2016

The National Memo’s David Cay Johnston explained the real scandal at the Internal Revenue Service on Thursday’s Democracy Now. His answer shows how the Republican agenda is to deprive the agency of funding in order to keep those who report their own income immune from investigation:

The Internal Revenue Service has been given all of these duties that are beyond collecting taxes, and they have enormously added to their burdens. So, in the last 10 years, the budget of the IRS, adjusted for the size of the population and inflation, has come down 17 percent, while the duties it’s been given have gone like this. Now, if you’re a wage earner and—or pensioner, you have your taxes taken out of your money before you collect it. You’re not being affected by these budget cuts. But people trying to get a tax-exempt status, there aren’t enough people to process the complaint—to process the permit requests. People are not being audited at the level they should, who are very wealthy and who self-report. There is no independent verification of their income. And we know that self-reported income, roughly a third of it, tends not to be reported overall—some people are scrupulous; some people are the exact opposite—and that verified income, like wages, 99.9 percent of that gets reported to the government. So, the IRS is being asked to do things it doesn’t have the budget to do. Its workers have not had pay raises in three years. IRS employees are held to a higher standard than anybody else in the government in terms of their conduct. And they simply cannot do all the things that Congress is asking of them.

He went on to explain why no one at the IRS likely committed a crime, since the law is purposely vague.

Johnston also describes the Citizens United decision as our “Plessy v. Ferguson,” pointing out that there were only six corporations in the United States when the nation was founded.

If you really want to understand this whole “scandal,” watch this interview.

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  • Sand_Cat


    • FredAppell

      This may sound like a bit of a reach considering how I try to distance myself from conspiracy theories but think about what you wrote here. Now take that
      a step further, the right wing has been clamoring about the implementation of
      the IRS since it’s inception. They say it is Constitutionally illegal which is debatable but that isn’t where I’m going with this. To implement and keep
      such an agency intact with all this opposition would require some favors.
      See where I’m going with this? There has to be some give and take going on behind the scenes or (this is the real juicy part) the right wing doesn’t actually
      oppose it at all and only uses their phony rhetoric in the most disingenuous
      manner possible to whip up their base. The Supreme Court hasn’t called in to question the validity of the IRS even when it was stacked with right wingers. So
      this could be one possible answer to your question. It certainly is worth consideration.

      • InsideEye

        The IRS is not underfunded, If they were abolished it would be a money saver. Everyone should pay a National sales tax.. All citizens would have to pay, including Corporations , unless they are investing in future growth. This way everyone would have to pay , even the free-loaders. It seems the Middle is supportiing the Extreme ends of the financial spectrum. The high earners can weasel their way thru laws (loopholes) ….written by our Congress!!, IRS Code would be only 2 pages…….the lower earners do not pay anything either. a Fair Tax is a Flat tax for everyone…no more politics or , CPA’s. 10 percent seems like a good numeber….even God likes that.

        • The “low earners” pay plenty in sales taxes, state and local income taxes, excise taxes and fees. Payroll tax deductions are the primary tax on the poor, and, in a perfect turnabout, are applied to a vanishingly small or non-existent percentage of wealthy peoples’ incomes. Moreover, the super wealthy are just off shoring their wealth, income and holdings and avoiding taxation whose revenues would almost equal our current budget deficits. In other words, even with (unfairly generous to the wealthy) rates, JUST capturing revenues stashed off shore would balance our nation’s budget. That, sir, is how egregiously unfair the current system is to the middle class, and how unimaginably charitable it is to the already massively wealthy.

          • InsideEye

            We all pay Plenty of taxes, But not everyone pays…. Corporations, cash business, Drug runners, Gun Runners, politicians with money hidden in freezers…unkowingly. Money stashed off shore was promulgated and sign off by congress and various POTI. …we can not Blame Romney or any corporations for this if it is sanctioned by Congress. Only the middle class pays for the free-loaders and the free-loaded upper income types.

          • Is that supposed to be a rebuttal? You didn’t address any of my points. I didn’t blame Romney or corporations either. How bizarre.

          • InsideEye

            There is a large underground , cash economy, entitlement groups , and you say higher income earners that also spend as they buy and therefore would pay sales taxes ( national), payroll taxes are only paid by workers on the books. Off shore should be brought home …but who made these offshore loopholes…..our great leaders, congress and exec. Admin of government.

          • @Inside, it’s so hard to tell your intended meaning; your grammar is a disaster. The cash, underground economy is minuscule compared to the massive losses treasury suffered from the Bush tax cuts and these ridiculously low rates on capital gains and retained interest. If you have any evidence to indicate or prove that the underground/cash economy has expanded in recent years — to something beyond average historical levels as a percentage of the overall economy — I’d love to see it. Until then, I’m calling bullshit on that point: It’s too minor a factor to be concerned with.

            Yes, we already know that all off shoring was usually legal and that the law that allows it was passed by our government.

          • idamag

            Inside’s way of thinking is that it isn’t the thief’s fault he stole. It is the victim’s fault for allowing the thief to steal.

          • idamag

            Andy, insideeye’s thinking looks like he is saying it is not the thief’s fault the money was stolen, it is the victim’s fault for leaving a way for the house to be broken into.

        • FredAppell

          What free-loaders are you referring to? Why don’t you enlighten me and explain just who these free-loaders are. And you can forget about your fantasy of seeing the IRS abolished.

          • InsideEye

            The 50 percent that do not pay income taxes, for whatever reason, entitlement groups, and high income loophole dwellers, cash dealers, drug runners. The IRS can be abolished, with a simplified flat tax….that can even pay for healthcare and SSN.

          • FredAppell

            Are you even looking at the big picture here? You need to break it down better than that, you can’t use such broad terms in your
            description of the so called 50%. Many of the entitlement groups don’t even make enough to qualify to pay income tax so they shouldn’t be part of the discussion and I don’t hold that against them. However, I am not so blind or naive to believe that there isn’t some fraud going on there, just not to the degree that some
            people would have us believe. I’m not sure I understand what you mean by cash dealers so i’ll leave that one alone. By drug runners, I assume you mean drug dealers, for that matter,we could include all kinds of criminals. This brings me to my favorite
            group, these are the people who like to tell the rest of us how bad socialism is while they are enjoying all kinds of social welfare. You can’t blame the IRS for these fools though. Congress makes the tax laws and loopholes so the onus is on them to straighten this mess out.

          • Why does this always have to circle around to flat tax? Why not a simplified tax code that is still progressive? Either way, there would still have to be an IRS or whatever agency would oversee this tax structure whether it’s a sales tax, income tax, whatever. Dream on, Inside; unless the Fed government stops taxing altogether, there’s going to have to be something like the IRS.

        • rustacus21

          … sigh… don’t U ever wonder what ever happened to the over $10 trillion that didn’t make it “to” the treasury during the 2001-2012 period when the ‘rich/corp only’ tax cuts were in force? They were used on media by the rich & corp’s to convince low-info Americans such as U that govt is ‘evil’, & a ‘racket’, all while they made sure U were informationally-deprived, U didn’t ask this ONE very important ???: “…if they (the rich/corp’s) aren’t paying their (fair share) in taxes, WHO IS…?!” Want to take a try @that one genius?! If the answer surprises U, U’r on the road to recovery from from being anemically under-informed…

      • I humbly add that, while they have no problem with the tax burden of the common man, the right-wing hierarchy feels they should be exempted.

        • FredAppell

          So too do most of their constituents. Every now and then I visit right wing blogs. I don’t post, I just read what they’re saying. Pretty scary stuff from my point of view. I don’t know know if some of the right wing trolls that frequent here go to those same sites but I assure you that when I make accusations or generalizations about them, it is usually accurate. If you’re ever
          curious or have the time, go visit some of those blogs. Some of them are pretty descriptive about what they’d like to do to people
          like you and I. It’s a real eye opener for sure.

          • idamag

            I found most of it to be hateful and anti-American, although those nuts claim they are the real Americans.

          • FredAppell

            You pegged it. That’s precisely what I meant and they advocate violence against the rest of us.

    • idamag

      It looks like the IRS is not going to be allowed to monitor groups to make sure they are what they say they are.

    • idamag

      When the IRS does try to do the job of policing political organizations, posing as good will organizations, it results in a supposed scandal. At least there are some factions who try to make hay from manure.

  • montanabill

    This is most bogus story I’ve seen. Attack anything but the real issue if it looks bad for your side.

    If the administration has nothing to fear, then they should support appointing an unbiased special counsel. If they do have something to fear, they will do their own ‘investigating’.

    • You are the most bogus poster I have ever seen. The story is sound. Your comments are predictable, as always In this case, you are partly right, except that it fits your own “party” to a tee. Almost all of these non-profit applicants are right-wing shills that do nothing but political attacks against our legitimate government. They foment hatred by using falsehood . . . paid for by rich, evil scum that arrogantly think they deserve to own this country. These organizations SHOULD have their non-profit status delayed until they prove they do non-profit work. We both know they do not! Therefore, these maggots should not have 501c status.

      We THE PEOPLE make the money the rich steal. They then use that money to
      reduce us to the status of slaves by buying our government, our laws, and dividing our people. And the cycle continues, on and on.

      • montanabill

        While you are in your closet fuming, go read the actual admissions made by the IRS. Then look at your writing and your attitude and see if you can guess who will never have to worry about becoming part of those ‘evil rich’.

        • idamag

          Yes, they admitted to investigating the tea party’s claims to be a non-profit for the public good organization. Why shouldn’t they? It the tea party was really who it says it is, then an investigation should be nothing more than a nuisance. It they are claiming tax exempt status and are obviously a political organization, raising money for and supporting candidates, and they are not that. of course they are going to be looked at.

          • montanabill

            Apparently you didn’t pay any attention to the illegal information they were asking for. These organizations could have received the same treatment as liberal organizations, but they didn’t. And the IRS has admitted that. If they weren’t eligible, they could have been turned down. I can also tell you from first hand experience, that I and many of my friends just happened to get audited for last year. The common trait: donations to Republican candidates. Just a coincidence, I’m sure.

          • Absolutely! Another conspiracy! All Republicans are being audited! geez why didn’t I think of that! You are brain dead!!

          • Sand_Cat

            Neither they nor liberal organizations, nor any other political organization should be allowed to even apply for tax exemptions, at least not under this law. And this was in one office. So, of course it must have been Obama personally attacking Cinncinati. But, look at the bright side, Bill: while he was attacking those organizations personally, he had to stop his personal crusade to steal all the money you made without any other human being’s assistance in any manner because you’re just god and superman all rolled into one.

          • plc97477

            Those were not the names I would have called him but I get your point.

  • docb

    I agree with L. O’Donnell, interpret the letter of the law..’exclusively as social welfare’ as written in 1954 under Eisenhower..Not one 501c4 would be granted the exemption! Problem solved. As to Johnstons’ interview he is correct about the downword funding curve verses the responsibility… It was a great interview.

  • Lovefacts

    Isn’t it interesting that most Americans pay their taxes, yet the rich want to abolish the IRS by repealing the 16th Amendment, which authorizes the federal government to tax its citizens. They also are tax cheats and ensure that the tax code is difficult due to their bennies. IMO, if we had four tiers for taxes and only the standard deduction, we’d all be better off. Of course, a lot of CPAs would be out of work.

    • idamag

      And most Americans (the 99%) are happy to pay taxes because they are happy they made enough money to owe taxes.

      • FredAppell

        I wouldn’t say happy to pay taxes, but I see your point. More like, happy to be able to contribute to the over all wellness of our infrastructure and our less fortunate citizens.

  • The GOP has cut the funding of most government agencies, for the same reason it reduced the IRS budget. The goal is to render the Federal government ineffective, dismantle most government agencies, and…punt!
    The know what they don’t like, they just don’t know how to replace it with anything as effective and efficient as what we already have.

    • Dick Beninya

      What planet do you live on?

      • Sand_Cat

        Obviously not the one you imagine you do.

  • ococoob

    Blame the SCOTUS for “Citizens United”

  • clarenceswinney

    Those based in the U.S. Boosted their work forces in 2011 almost entirely by hiring workers overseas, underscoring the slow growth in the U.S. Job market.
    The U.S parents of multinationals account for about one -fifth of total private U.S. Employment.
    Since 1999, employment by U.S. Multinationals is down by 1.1 million inside the U.S, while it is up by 3.8 Million overseas.
    The hiring of American companies is not happening in the U.S. These companies hold $1.7 Trillion of profits away from shareholders and out economy to avoid taxes.

  • option31

    So let me get this straight, you’re saying the IRS being underfunded resulted in the IRS spending extra time, effort and money on delaying these groups status and requesting all sorts of personal information including prayers said at meetings? You must think we, your readers are idiots. If you don’t have money you certainly would not spend time on these groups and WOULD spend time going after the big fish – The payoff would be better.
    It was a political hatchet job run by somebody higher up that a couple of low level clerks. Your defending it because it was not your ox that was gored ( this time) is ludicrous.

    • Sand_Cat

      Well, we know of at least one reader they’re right about.

      • option31

        Well I’ll give you one Sand_Cat at least you’ll admit it.

  • JSquercia

    Actually the story I found Most interesting concerning taxes was the one involving UBS where a whistleblower gave up the names of numerous citizens who were ILLEGALLY hiding their money in Switzerland .

    Only ONE person went to jail in the scandal and it was the WHISTLEBLOWER who was charged with aiding someone avoid taxes .The SOB who was involved was only made to pay taxes , penalties and interest .