tax day

Nate Beeler, The Columbus Dispatch

Judge Rebukes Harris’ Effort to Access Group’s Donor Lists

Written by Steven Greenhut and published in the San Diego Union-Tribune:

California Attorney General Kamala Harris has been in the news lately as the Democratic establishment’s anointed successor to Barbara Boxer, the U.S. senator who has announced her coming retirement. But a recent ruling by a federal court temporarily smacking down one of Harris’ decisions may give her political foes a little ammunition.

In December, this column reported on a federal First Amendment lawsuit filed by the Virginia-based conservative group Americans for Prosperity. The group — co-founded by the billionaire Koch brothers, who are a lightning rod for critics from the political left — argues the AG is trying to squelch free speech by demanding its list of donors.

The IRS requires such tax-exempt charitable groups (the foundation is a 501(c)3, which provides “education” and does some limited lobbying for bills and initiatives) to file an annual report called a Form 990 and a Schedule B, which lists donors who give more than $5,000 a year. The IRS is required to keep the information about donors private.

California also requires groups to register with the attorney general’s office. …

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Is It Time To Garnish The IRS’ Pay?

The IRS has abused its power and misused its resources, so it deserves the budget cuts it got in the 2015 spending bill, a leading anti-tax group argues.

“If the IRS wants to see an increase in its budget, it probably should stop harassing conservatives,” Americans for Tax reform spokesman told The Daily Caller News Foundation. ”They used their resources in a completely inappropriate and political way that has basically ruined the reputation of the agency on the Hill.”

Congress cut the IRS budget by $346 million in the 2015 spending bill, reported Politico, and the agency has absorbed about $1 billion in cuts since 2010. It’s one of the only agencies whose budget was cut this year.

“[The cuts] are a logical response to the stewardship they’ve had with the resources they’ve been given,” Kartch told TheDCNF. “They’ve been given certain resources to implement the mission of the agency, and they’ve used them to harass Tea Party organizations. They’ve used them to harass conservative taxpayers. They’ve basically politicized the entire Cincinnati office for several years.”

Commissioner John Koskinen has already announced a hiring freeze and suspension of overtime hours, and said Thursday the most recent cuts could shut the agency down temporarily.

“People call it furloughs,” Koskinen said, according to Politico. “I view it as: Are we going to have to shut the place down? And at this point, that will be the last thing we do … but there is no way we can say right now that that wont happen.”

The cuts come as the IRS prepares to take on new responsibilities implementing Obamacare, and in the face of a mandatory government-wide pay raise Koskinen said will cost $250 million.

Kartch accused Koskinen of trying to extort Congress by purposely absorbing the cuts in a politically painful manner. In addition to the shutdown, Koskinen has warned taxpayers refunds could be delayed this year.

“They have a mandate to implement [the cuts], but the resources that they allocate is up to them,” Kartch said.

But Alan Viard, a budget and tax policy analyst at the American Enterprise Institute, said across-the-board cuts won’t fix the problem and are likely to hurt taxpayers.

“I’m very concerned about what the IRS did on the 501c4 applications by the tea party groups, and so it’s quite proper to try to stop that type of abuse or make sure it doesn’t happen again,” Viard told TheDCNF. “But just cutting the agencies overall funding is really not a good way to do that.”

Viard suggests a more targeted approach, such as clarifying 501C4 laws or reassigning certain responsibilities to other agencies, rather than the easier option of spending cuts.

“It really backfires by harming ordinary taxpayers who still have to comply with the complicated tax code Congress has imposed upon us,” he added. “Having given us this complicated tax system, I think it behooves Congress to try to give the IRS the resources to administer that system.”

This piece was originally published by the Daily Caller News Foundation

Billions Of Taxpayer Dollars Are Spent … Collecting Taxes

If Americans understood how much it costs the IRS to collect taxes, and how much it costs for taxpayers to file them, they might demand change, an economics lawyer said Friday.

“We’re talking about a massive amount of money,” Dan Mastromarco said at a Heritage Foundation event on tax compliance. “If we put that into a cure for childhood diabetes, cancer — pick your poison — space exploration. What we could do with that money that we just literally throw away.”

The vastness and complexity of the tax code contributes to high compliance costs, a huge number of people intentionally or unintentionally failing to pay the right amount of taxes, and a costly burden on the economy. The IRS reports it spends 41 cents per $100 to collect taxes, but the true cost is closer to $45 per $100, or $978 billion, when those factors are accounted for, according to research compiled by Mastromarco.

The code, which consists of 4 million words, is so complex, even the IRS can’t understand it, he said, pointing to a list of questions the IRS’s own taxpayer advocate service was unable to get the answers to. And the IRS could only answer 30 percent of more than 90 million requests for assistance in 2010.

“We really haven’t made this very clear to the American people,” he said. “They don’t see it. They don’t feel it. They don’t understand what this equates to — this is a huge amount of money. This is a good year of economic growth. This is beyond the GDP of many of the world’s countries.”

Mastromarco called for the IRS to disclose a more accurate accounting of the cost of its code to taxpayers, which might wake them up to the costly reality of the tax code.

“The reason nothing’s been done about this, is because we’ve gotten really good at making the pain gradual — making it so that we can’t see it,” he said. “We’re effectively numb to it.”

“Our goal should be to make compliance costs understood and transparent, and painful to the American people,” he added.

Mastromarco is a lawyer who has represented Fortune 500 companies, and has worked as assistant chief council for tax policy at the Small Business Administration and special U.S. trial attorney at the Department of Justice’s tax division.

Tax reform is an issue that may be taken up the new Republican-controlled Congress next year.

This article was originally published on The Daily Caller News Foundation.

IRS admits the “lost” Lerner emails

In the era of digital permanence, where terabytes of texts, emails and communications are automatically saved onto cloud servers and backed up via multiple redundant outlets, the IRS is claiming that thousands of critical emails in the investigation into potential criminal wrongdoing at the agency have been “lost.”  The assertion is comically absurd – after all, the government, which by many accounts is or has actively monitored millions of communications a year via the NSA, is simultaneously claiming that critical emails between principal subjects of the inquiry are now missing.  This week, the IRS commissioner admitted in Congressional testimony that the agency did not save the emails on Ms. Lerner’s blackberry, and it has no way of obtaining the information contained therein.  It would seem that federal officials are able to monitor all communications in America except their own. 130521_lois_lerner_2_328_js_605

Recall that this episode initially began with the surprise announcement last year that the IRS had inappropriately targeted conservative groups with increased scrutiny, as well as delayed their non-profit approval status, in an effort to limit the influence of their voice in the arena of public opinion.  After admitting its mistake, which by many accounts borders on the criminal, the IRS is now losing the public’s trust to an even greater degree.

One would naturally assume that the IRS must have some backup mechanism in place in order to protect critical information.  Mysteriously, however, the backup mechanism has also failed to yield the aforementioned communications.  If the backup truly failed, the next logical step would be to assume that the recipients of the email communications of the target individual could be collected to piece together at least a large portion of the relevant communications.  After all, there should be two copies of every email communication; one from the sender, and one for the recipient.  Surely, many subordinates and direct reports would have substantial communications with the relevant individuals which would help investigators piece together whether any criminal wrongdoing occurred.  It appears, however, that even this method is running into brick walls.

The IRS recently revealed that the emails of five key IRS officials, including an aide to Ms. Lerner, have also been “lost.”  The announcement comes after a key correspondence between Ms. Lerner and an IRS IT employee has been produced, in which Ms. Lerner asked if text messages are automatically backed up on IRS servers.  When the employee responded in the negative, she replied, “Perfect.”  One can logically deduce that Ms. Lerner did not want the contents of her communications to be revealed to the public.

Ms. Lerner, an agent held with the public trust in the collection of hard working taxpayer dollars, is hiding something.   The IRS needs to find this critical information.  The public needs to keep up sufficient pressure to ensure that the communications are located.

One need only imagine the scenario in reverse to ascertain how absurd the government’s position is in this matter.   Assume the IRS conducts a routine audit of an individual or private business (just recently, the Breitbart News, a well known conservative media outlet, announced that it is being audited by the IRS).  Certain records regarding business expenditures and other tax efficient write-offs are accidentally “misplaced” by the entity being audited.  Then the business or individual argues to the IRS that the relevant documents cannot be located.  The IRS would have little empathy in such a scenario, and the taxpayer would almost certainly lose the tax exemptions he or she was originally claiming.

It has long been said in America that no man or woman, including the President of the United States, is above the law.  Let us see whether the same can be said for the IRS.  So far, their silence and “missing” emails speaks volumes.

Ben Everard is a contributor to