Sunday, July 23, 2006

If Ya Can't Beat 'Em, Cheat 'Em.

When being really, really wealthy just isn't enough. NYTimes (07.23.06), via BeatThePress:
"The federal government is moving to eliminate the jobs of nearly half of the lawyers at the Internal Revenue Service who audit tax returns of some of the wealthiest Americans, specifically those who are subject to gift and estate taxes when they transfer parts of their fortunes to their children and others.

The administration plans to cut the jobs of 157 of the agency’s 345 estate tax lawyers, plus 17 support personnel, in less than 70 days."

I.R.S. to Cut Tax Auditors

Not that the IRS announced this to the world, either. "Kevin Brown, an I.R.S. deputy commissioner, confirmed the cuts after The New York Times was given internal documents by people inside the I.R.S. who oppose them."

Kevin says that the staff cuts are "because far fewer people were obliged to pay estate taxes under President Bush’s legislation."

On the other hand, insiders say the real reason is that these auditors have really been annoying very rich guys: "six I.R.S. estate tax lawyers whose jobs are likely to be eliminated said in interviews that the cuts were just the latest moves behind the scenes at the I.R.S. to shield people with political connections and complex tax-avoidance devices from thorough audits."

Ahhh yes. Complex tax-avoidance devices such as the Isle of Man scam? People with political connections like George's buddies, the Wyly brothers? Naaah!! Couldn't be.

This is rather illuminating. Six years ago, the IRS "said that 85 percent of large taxable gifts it audited shortchanged the government. Back then, the plan was to "hire three more lawyers just to audit taxable gifts of $1 million or more."

Now, however, Kevin says that a "careful analysis showed that the I.R.S. was auditing enough returns to catch cheats". Which analysis seems contrary to what Congress has been hearing. "Over the last five years, officials at both the I.R.S. and the Treasury have told Congress that cheating among the highest-income Americans is a major and growing problem."

Our six insiders told the NYTimes "that clear evidence of fraud was pursued vigorously by the agency, but that when audits showed the use of complicated schemes to understate the value of assets, the I.R.S. had become increasingly reluctant to pursue cases."

Nope. Nothing there to look at. Move along please.


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