Economics of adding 87K IRS agents

Look in the want ads for: ‘No Math-Skills required. Ability to Intimidate, Bully and a Knack for Thuggishness Guarantees Advancement.’

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Perfect qualifications if you should believe you need a hit squad to take the wealth and redistribute it to those who will vote to keep you in power.

YR

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So how much do they have to find, that the IRS would otherwise not have found, to pay for this increase in agents?

It would be impossible for me to find at this point, but I do remember hearing a couple years back during the last big “Wealthy tax cheats! Audit the bastards!!!” torch’n’pitchfork crusade that for every dollar spent on IRS agents auditing the rich, three-plus dollars came back in recovered evasions. Which goes a long way towards explaining why the rich always want to cut the IRS’ budget…

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The crew of high salaried tax attorneys that audits Estate Tax Returns and prosecutes wealthy tax cheats brings in about $10 for every dollar in salaries and benefits paid.

https://www.nytimes.com/2006/07/23/business/23tax.html

The [Bush} 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. 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.

Sharyn Phillips, a veteran I.R.S. estate tax lawyer in Manhattan, called the cuts a “back-door way for the Bush administration to achieve what it cannot get from Congress, which is repeal of the estate tax.”

Estate tax lawyers are the most productive tax law enforcement personnel at the I.R.S., according to Mr. Brown. For each hour they work, they find an average of $2,200 of taxes that people owe the government.

intercst

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The article is regarding a proposal and those losing their jobs are invited to funnel information in retaliation or just “news worthy”.?

You can never know as a reader, but I would be interested in what the final outcome really was?? Was this part of a larger governmental scale down or ???

YR

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The crew of high salaried tax attorneys that audits Estate Tax Returns and prosecutes wealthy tax cheats brings in about $10 for every dollar in salaries and benefits paid.

That is in line with several articles I have seen over the years. IRS enforcement easily pays for itself, and probably motivates more people to not cheat in the first place, if there is a greater chance of them being frog-marched to prison and their stuff taken for taxes and fines.

IRS enforcers are not thugs. They are good accountants, something the US has in abundance.

Frank John Wilson (May 19, 1887 – June 22, 1970) was best known as the Chief of the United States Secret Service and a former agent of the Treasury Department’s Bureau of Internal Revenue, later known as the Internal Revenue Service. Wilson most notably contributed in the prosecution of Chicago mobster Al Capone in 1931, and as a federal representative in the Lindbergh kidnapping case.

“[Wilson] fears nothing that walks. He will sit quietly looking at books eighteen hours a day, seven days a week, forever, if he wants to find something in those books.”

https://en.wikipedia.org/wiki/Frank_J._Wilson

Steve

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IRS enforcers are not thugs. They are good accountants, something the US has in abundance…

That may well be so, but here a personal experience that points to something else:

Back in the90’s I was President of two business startups at the same time; both officed in relatively cheap space to save some money…but also just happened to be two doors down from an IRS district office. After a couple of years. I received notice of a full audit of both companies.

Luckily, I had a great CPA (still do!) and he said not to worry. When I asked why we would get such an audit, he cited two reasons:

  1. These are start-up businesses, and the IRS often finds something in this arena.
  2. You are two doors down; this is easy for them.

Fast forward through two weeks of hell for me…and a TON of hours from my CPA…for which I had to pay.

Net Result: A rare “No Change” from the IRS–they couldn’t find anything wrong.

Great, I thought! Now they will at least reimburse me for my CPA’s 5-figure cost, even if they don’t pay me for my time, etc. Wrongo! I got precisely zero from the IRS, even though I had done nothing wrong!

Fair? Nope! But that’s the way it works at the IRS. One is guilty until proven innocent…and I had to pay to prove it

The power to tax IS the power to destroy!

Sample of one? Maybe…but if one receives a “No Change” the IRS should have to reimburse the taxpayer.

Cheers!
Murph
BL Home Fool

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My view is that if Congress requires citizens to pay taxes in accordance with tax laws that Congress writes, then Congress should respect the fact that my time is valuable. I shouldn’t have to wait for hours to get an agent on the phone and it shouldn’t take months to get a written response. The sheer contempt Congress has for its own citizens is ridiculous. Congress writes the rules and then punishes me for following them? These agents should have been hired a decade and half ago.

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I for one, filed for my ERC 10 months ago. I was told by my CPA to expect around 18K for my small business in return.

Still no check and when they are called “they are working on it”.

Funny how different it is, depending on who has to write the check.

The IRS is NOT ever your friend.

YR

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The IRS is a bunch of thugs…

Maybe 7 years ago, I got a ‘you owe us thousands in extra taxes’. Seemed they had a computer problem.

I had about 8 items of itemized income

Like Fidelity Fund XYZ $326.92
Like Fidelity Fund ABC $216.83
etc

They sent me letter saying I hadn’t paid taxes
on income as follows

Fidelity Fund XYZ $362.92
Fidelity Fund ABC $216.93

Exactly as filed…

I sent 3 or four letters explaining it and showing the tax return as filed.

Did not do anything.

Finally I had to wait hours on phone to speak to someone who was about to grab the money from my bank account…and it took her half an hour to fix the IRS return.

No thanks.

turns out Fidelity had sent the IRS a form slightly different from the income form they sent me…but their stupid computer couldn’t match it.

I think their computers are mainframes from 1980 running COBOL programmed in 1965 on old mainframes.

Didn’t have that problem again. But it was a nightmare at the time.

t.

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"The power to tax IS the power to destroy!

What do 87000 new tax auditors and 30000 existing auditors do to justify their existence after they have finished auditing 100000 billionaires and millionaires? Who do they come after next?

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Sample of one? Maybe…but if one receives a “No Change” the IRS should have to reimburse the taxpayer.

Sounds reasonable enough to me. In fact, if it were up to me, the IRS would have paid for audit and if there was no change you wouldn’t have to wait to get reimbursed.

But Congress could have changed that rule anytime since the 1990s, right? Fact is, there is a political philosophy that says making taxes hard to pay will lead to lower taxes. And they are very upfront about this. It isn’t a secret. I could provide names and quotes but we don’t do that here on METAR. But in reality, making taxes hard to pay is just Congress abusing its citizens to make a narrow political point.

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One ideology has been killing the IRS or misallocating funds to audit the poor. The other ideology has been tackling the wealthy. It all depends on who controls the WH.

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When asked why he robbed banks, Willy Hutton replied “Because that’s where they keep the money”.

In a country rift with larcenous souls filing their tax returns, the biggest bang for the buck comes from spending auditor’s time perusing the returns of the wealthy.

It’s not that the wealthy are less honest than the poor, but the consequences of that dishonesty - if it can be reversed/fined - is much more useful to the nation’s budget if the wealthy attract the majority of the audits.

To be honest, the best system of collecting income taxes that I’ve seen is that used by Sweden. They collect our equivalents of W2 and 1099 income forms and generate an annual tax bill. You can either pay it or object and be subjected to an audit to see how your taxes differ from those the government calculated.

Jeff

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To be honest, I am just worried the IRS will be nurtured to become what the FBI is as of today’s news.

It is coming, maybe already here…

YR

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To be honest, I am just worried the IRS will be nurtured to become what the FBI is as of today’s news.

You mean a group that follows facts, works in conjunction with another independent branch of government, and ensures that no person is held above the rule of law?

AW

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YR,

Why are you posting an article dated 8/4/22 that is already out of date today 8/9/22? It sounds like a hit piece from Republicans to stop the Senate from approving the Act.

One statement in the article says: “Inflation Reduction Act of 2022 would spend an extra $79.6 billion on the agency over the next 10 years. The added cash is expected to go toward hiring 87,000 new IRS agents, roughly doubling the agency’s size.”

That statement should be revised to state that only $7.96 billion per year and only 8700 new IRS agents per year. Everyone also realize that people retire every year and wages increase every year. So this does not seem at all unreasonable to make up for years of underfunding the IRS.

Jaak

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What do 87000 new tax auditors and 30000 existing auditors do to justify their existence after they have finished auditing 100000 billionaires and millionaires? Who do they come after next?

boater123

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BS from another Conservative Board diehard. It is only 8700 IRS agents per year. They will do 10,000 billionaires and millionaires per year. This is a 10 year program.

Jaak

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To be honest, I am just worried the IRS will be nurtured to become what the FBI is as of today’s news.

It is coming, maybe already here…

YR

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You post is purely political. Please delete it because politics is not allowed on this board.

Jaak

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I guess rooster’s political post is not political if he keeps it ambiguous. I was a prosecutor at the start of my career in the early 1980’s. FBI can’t get a search warrant without sufficient evidence to persuade a federal judge.

They are prohibited by law from divulging the contents of that search warrant.

The recipient of said search warrant can reveal the contents of said warrant if they wanted to demonstrate they were victims of a witch hunt.

If instead they complain about a witch hunt with no evidence to support their claim it is because there was ample probable cause for the search warrant.

I wii wait for the evidence to prove me right again.

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FBI can’t get a search warrant without sufficient evidence to persuade a federal judge.

I can’t imagine the FBI ever getting a search warrant to go into someone’s house and search through it, maybe in the extreme case of an international mobster.