The IRS plans to crack down on 1,600 millionaires to collect millions of dollars in back 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.”

Grant_M,
@Grant_M@lemmy.ca avatar

Tax the snot out of these greedy hogs.

Cfords,

Healthcare won’t be a bad idea !

xT1TANx,

why exactly isn’t it normal to get taxes from the rich?

nucleative,

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.

legios,
@legios@aussie.zone avatar

It also takes longer to audit people who are trying to screw with the system so it’s sometimes just “Eh too hard” which is a bad reason to not do it…

nucleative,

Especially if it’s going to be a small ROI for the IRS.

I know in tax planning for high net worth individuals and businesses there is often a question about how the penalty (downside of being found to owe more tax) relates to the upside of just not paying the tax. For matters that aren’t so clear or where the tax code can be interpreted many ways - it often comes down to the decision maker’s risk tolerance.

So it’s smart for the IRS to avoid cases where a hundred hour audit gets them another $2k vs litigating a $20m underpayment over a grey area.

IHaveTwoCows,

Because for fifty years the rich have taken control of government and excluded themselves from taxation.

But don’t worry, if you just vote the problem will disappear…

Empricorn,

What are you actually taking about? Your first statement identifying the problem has nothing to do with the second one.

Let me guess: you’re under 34 years old…? You imply voting is ineffective when you haven’t even tried it yet! Talk to me when at least half of your demographic votes…

IHaveTwoCows,

You are really, REALLY bad at guessing

kofe,

Well I was gonna up vote your comment but you’ve made a persuasive argument

MrSqueezles,

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.

profdc9,

In other news, 1600 millionaires have made significant donations to their Congressmen and paid lobbyists. Expect a new “The IRS is evil” campaign soon.

IHaveTwoCows,

They’d rather give money to one person than support their country that lets them have success.

Donors should be taxed at double the percentage.

Smacks,
@Smacks@lemmy.world avatar

So, they weren’t doing it before? What the hell have they been doing this whole time?

comador,
@comador@lemmy.world avatar

Because the IRS has continuously had its budget cut, most extensively under Trump

www.propublica.org/…/how-the-irs-was-gutted

WuTang,

OK Daniel, and what are you going to do with these millions? Free healthcare? improve education?

Natanael,

It goes into the gov budget, out of scope for him

Naura,

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.

hglman,

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.

Saneless,

Can’t wait for people in red states making <$50k to be really mad about this for some reason

Plopp,

For some reason? They’re just looking out for their future self. Any day now they too will be millionaires. Any day…

Buddahriffic,

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.

solstice,

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…

derocker,

This guy accounts

girlfreddy,
@girlfreddy@lemmy.ca avatar

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.

solstice, (edited )

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.

VentraSqwal,

I’m glad you’re here! We need more people than just tech people lol.

ToucheGoodSir,

Deeply appreciate you taking time out of your day to write an opinion on this (career related) news!:) you’re doing your part.jpeg

solstice,

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

Naura,

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.

solstice,

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.

Grant_M,
@Grant_M@lemmy.ca avatar

Thank you!

mycall,

Does the gaps inside the flaws of accuracy often incur fill ins black market entities?

solstice,

I’m sorry, I don’t understand the question. Can you rephrase please?

Illuminostro,

Tee hee.

wrath-sedan,
wrath-sedan avatar

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!!

WheeGeetheCat,
@WheeGeetheCat@sh.itjust.works avatar

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

wrath-sedan,
wrath-sedan avatar

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.

utopianfiat,

They were coming for middle class people because we can’t afford audit defense, or massive bullshit campaigns like “omg they’re targeting conservatives!!”

HoustonHenry,

They targeted the poorest of us, because they are severely underfunded, the IRS cant afford extended litigation. They poor can’t afford to fight back, you’re 100% right

CafecitoHippo,

Okay. Audit me. I have W-2 wages and take a standard deduction. Like why are every day people afraid of being audited.

SheeEttin,

Because it’s a huge hassle and you could end up being fined if they find something they don’t like.

HoustonHenry,

I’ll happily put up with it if it means the 1% finally get to pay their fair share

CafecitoHippo,

The vast majority of people do not have tax returns complicated enough to be worried about an audit. If you’re going through the process of itemizing your deductions, keep your receipts and have stuff saved and backed up. It’s not hard.

If you’re lying on your taxes hoping you don’t get audited, that’s your problem. The same way if you’re driving 20 over the speed limit and get a ticket. You knew the risk and did it anyways.

solstice,

The speeding analogy is my go-to example. Many people go a little bit over and it’s not a huge deal. Some people go 20mph under and they’re just weird. Sometimes jerks get away with going 100mph and then you get a ticket for rolling a stop sign. Is what it is, most reasonable people are fine, or you can roll the dice and see what happens.

lazyvar,
@lazyvar@programming.dev avatar

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.

dragonflyteaparty,

But but but doesn’t the IRS just make stuff up and take your money?

solstice,

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.

reverendsteveii,

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.

dragonflyteaparty,

Wow, that was wonderfully said.

solstice,

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

Leviathan,

In totally unrelated news: the GOP has announced war on the IRS; “too long have they preyed upon this nation’s most vulnerable!”.

surewhynotlem,

Announced? It’s been in full swing for ages.

www.cnn.com/2023/01/23/politics/…/index.html

DeadNinja,
@DeadNinja@lemmy.world avatar

“Plans to” ? okay…

Redx,

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.

tryptaminev,

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.

Redx,

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.

SatansMaggotyCumFart,

I love centrists.

Always complaining without a solution.

Naura,

That’s exactly what a centrist would say 🤷🏻‍♀️

forrgott,

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

gregorum,

How about we stop spending billions on subsidies for oil companies?

utopianfiat,

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.

Hazdaz,

So basically doing their job.

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