The two obvious problems with astoundingly broad omnibus laws is that they’re so big that it’s essentially impossible to know everything shoved in there, and only later do people realize that the law with the cool and lofty name includes some really awful stuff that nobody knew about. The other problem is that you can love some pieces and hate others, but since they’re all part of the same huge omnibus law rather than presented as separate matters to be considered on their individual merits, it’s all or nothing.
But did you know about the $600?
When the Biden administration looked for ways to pay for the president’s expansive social policy bill, it proposed raising revenue by cracking down on $7 trillion in unpaid taxes, mostly from wealthy Americans and businesses.
Is there really $7 trillion at issue in tax evasion? It’s an estimate, even if the New York Times lacks sufficient space to include the word, but it’s possible. Do wealthy Americans and businesses evade $7 trillion in taxes? That’s a different issue. Sure, they pay as little as the law allows, but that’s not evasion and if gaming the law doesn’t mean taxes are unpaid.
The government can raise taxes, but that’s entirely different than claiming that there is $7 trillion in unpaid taxes by wealthy Americans being hidden somewhere. And where are these wealthy American and businesses hiding their loot?
To help find those funds, the administration wants banks to give the Internal Revenue Service new details on their customers and provide data for accounts with total annual deposits or withdrawals worth more than $600.
A threshold of $600 pretty much means every back account. Does Biden suspect that those billionaires and trillionaires are squirreling away their tax-unpaid lucre in thousands of bank accounts where they deposit or withdraw $600? Why $600 is a bit of a mystery, but that aside, this seems to clearly not be limited to the wealth and business in any event. Some wags might even surmise that this is intended to cover everybody, from the paper boy to Bezos.
That has sparked an uproar among banks and Republican lawmakers, who say giving the I.R.S. such power would be an enormous breach of privacy and government overreach.
Privacy is a curious concern, given that people willingly give Zuck, et al., their every life detail without the slightest concern. And the government has long been at war with the cash economy, which makes it far harder to gather evidence against you as opposed to credit and debit cards, where your every transaction falls under the Third Party Doctrine so that they can get it at will, even if it’s not mandatory that it be affirmatively reported.
But while privacy might be the most obvious concern, is it the most serious concern? The IRS has powers that shock those people who end up on its radar. It makes assessments for reasons that only it knows and then sends you a letter in an official envelope that informs the recipient that there is a fine if it’s not used for government purposes. Within the envelope is a dictate from government to pay or else.
What does the nice family with more than $600 in deposits or withdrawals do if they get this love note from the IRS? It’s not as if they can call up the local office, have a nice chat with a rep and straighten this mess out. How the IRS will reach its conclusion is a mystery at the moment. Will an auditor review accounts that raise a red flag? What constitutes a red flag?
Will it be an algo searching millions of bank accounts daily for anomalies based on whoever wrote it? Did you get a birthday present from grandma or sell heroin on the street corner without the required tax stamps? It will be left to the recipient of the letter to dispute, and prove, perhaps in court and likely with a CPA and lawyer at their own expense, to challenge the IRS.
And let’s not even talk about jeopardy assessments.
Did you know this was in that sweet, sweet, build back better bill that promises, on the one hand, to give free stuff to everybody who has suffered the indignity of victimhood by not having as much money as somebody else? Will the IRS only direct it’s attention at the wealthy and businesses, or will the letter come to a mailbox near you? Is this the way you reimagined America?
*Tuesday Talk rules apply.
No comments:
Post a Comment