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Fwd: Today in New York Times

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  • Morpheus El
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    Message 1 of 1 , Feb 5, 2003
      --- Cindy Neun <cindyoflasvegas@...>
      > To: egroups <c.smith@...>
      > From: Cindy Neun
      > <cindyoflasvegas@...>
      > Date: Wed, 05 Feb 2003 07:20:45 -0800
      > Subject: [legality-of-income-tax] Today in New York
      > Times
      > TODAY in New York Times
      > February 5, 2003
      > Bush Budget Increases Push to Find Tax Cheats
      > resident Bush's budget would increase by a third or
      > more the number of
      > audits of taxpayers suspected of hiding income
      > received from their
      > businesses, partnerships, investments and offshore
      > accounts.
      > The administration identified five areas to which
      > more resources would be
      > devoted to stem tax cheating: abusive corporate tax
      > shelters, unreported
      > income among higher-income taxpayers, failure by
      > employers to turn over
      > taxes withheld from paychecks or even to withhold
      > them, misuse of trusts and
      > offshore accounts to hide income, and "tax denial"
      > schemes that are based on
      > claims that the tax code does not apply to most
      > Americans.
      > The proposal is a first step toward reversing a long
      > decline in enforcement
      > of the tax laws. It could bring in billions of
      > dollars owed to the
      > government and would also help the states, which
      > rely on Internal Revenue
      > Service enforcement much more than on their own
      > audits.
      > But the proposal for I.R.S. financing falls far
      > short of what Charles O.
      > Rossotti, the last I.R.S. commissioner, said in
      > November that the service
      > needed to enforce the tax laws adequately.
      > Under the Bush plan the I.R.S. would get an
      > additional $133 million for
      > these audits and other law enforcement work in these
      > five areas. Over all
      > the I.R.S. would receive $10.4 billion, a 5.25
      > percent increase, but still
      > less per tax return, after adjusting for inflation
      > than it got five years
      > ago. Law enforcement, which includes audits, takes
      > up almost 40 percent of
      > the I.R.S. budget.
      > The additional money would "target the real problem
      > areas in a fair and
      > evenhanded manner, restoring confidence in the tax
      > system for hard-working
      > taxpayers," said Pamela Olson, assistant treasury
      > secretary for tax policy.
      > "At the same time the I.R.S. goes after those who
      > cheat," Ms. Olson added,
      > "the I.R.S. must provide better service to
      > law-abiding taxpayers and respect
      > every taxpayer's rights. It can and it must do
      > both."
      > But according to the formula Mr. Rossotti
      > recommended in his final report to
      > the I.R.S. Oversight Board, the agency would need an
      > overall increase of
      > more than 7 percent, as opposed to the 5.25 percent
      > proposed by President
      > Bush, to start closing the law enforcement gap.
      > Over the last five years, demands on the I.R.S. have
      > grown in several ways.
      > Congress has made the tax code far more complex,
      > while at the same time
      > imposing complicated new procedures to protect the
      > rights of taxpayers. A
      > growing number of promoters now teach people to
      > exploit those procedures to
      > thwart audits and the collection of taxes, according
      > to Mr. Bush's budget.
      > Congress also ordered better service to cooperative
      > taxpayers. Without extra
      > money to handle these duties, the I.R.S. diverted
      > money from audits, which
      > in turn lowered the risks of cheaters being caught.
      > The Treasury Department did not detail how much of
      > the extra money would be
      > applied to each of the five areas of cheating. It
      > said only that with $133
      > million more it could increase audits of individuals
      > who make more than
      > $100,000 from 125,000 last year to 166,000 next
      > year, a one-third increase,
      > at a cost of about $3,200 per audit. For some tax
      > dodges the number of
      > audits would increase by more than a third; for
      > others, the figure would be
      > less.
      > The department also proposed tougher rules to make
      > both promoters of tax
      > shelters and the companies that buy them keep more
      > records and make more
      > disclosures.
      > The use of artificial losses in foreign currency
      > transactions to make
      > capital gains vanish is one of the most popular tax
      > dodges. So are corporate
      > transactions that inflate interest deductions.
      > Entrepreneurs who place their
      > business in a trust, because promoters persuaded
      > them that it will make
      > profits immune from taxes, are another area covered
      > by the budget proposal.
      > The extra money would also increase audits of those
      > who buy into the growing
      > number of fraudulent schemes asserting that it is
      > legal to stop paying taxes
      > if one uses a "pure trust," renounces his Social
      > Security number or declares
      > himself a sovereign citizen or a citizen of the
      > state in which he lives (but
      > not the United States). Another fraud, known as the
      > 861 position, asserts
      > that wages paid by American-owned companies are
      > exempt from tax. None of
      > these claims have been upheld by any judge anywhere,
      > but the Treasury
      > Department has acknowledged that the frauds have
      > flourished in recent years.
      > Promoters of these schemes often cite as evidence
      > that taxes need not be
      > paid the statements of those senators and
      > representatives who in the last
      > five years have described the I.R.S. in terms like
      > "rogue agency" run by
      > "jackbooted thugs" and other remarks that the
      > promoters twist into
      > assertions that the I.R.S. is not a legitimate
      > agency of the government.
      > This year the vast majority of tax cheats the I.R.S.
      > identifies will get
      > away without paying. Mr. Rossotti's report showed
      > that the I.R.S. has only
      > enough money to pursue about a fifth of individual
      > cheats.
      > Copyright 2003 The New York Times Company |
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