Why is Bush's IRS chasing working poor Earned income credits - EITC

[papau]

Seems we have $100 billion of tax being lost each year - a trillion over 10 years - because of income illegally hidden by accounting tricks proposed and run by the accounting firms for the 13000 richest families.

But Bush has the IRS chasing the poor -and their EITC credit on their FIT income tax.

Folks - the MAX credit - which occurs under married filing jointly, and with 2 or more children - is $4,300 - and is phased out to zero at $35,458 of income, with the phase out beginning at $15,040.

The no children credit max's at $390, phasing out to zero at $11,490, with the phase out beginning at $6,390.

The one child credit max's at $2,604, and is phased out to zero at $30,338, with the phase out beginning at $14,040.

And this is how Bush wants to pay for government - indeed this is how Bush wants to use the monies budgeted for the IRS. Chasing the working poor.

Compassionate conservatism is defined by the above - I wonder if our media will notice.

[indepat]

1. Because they know where their bread is buttered?

[DieboldMustDie]

2. Because the poor don't donate enough to his campaign.

If he went after the rich they might stop writing him those $2000 checks. :mad:

[forgethell]

3. Because they've been doingit for years

before Bush got in office. They're easy targets. The IRS is EVIL, but Bush is not to blame. The IRS is to blame, Dem or Repuke administration makes no difference. They are a CANCER on society.

[ramapo]

7. It is not the IRS

It is the policies and tax laws that are selected for enforcement. The IRS agents get their direction from above. The agents are not allowed to go after the real tax cheats. They do not have the tools or the support.

They pick on the little guy because of the political forces driving tax policy and enforcement.

[redqueen]

8. You're right

I remember reading about this last year or two years ago when this new direction for enforcement efforts was decided.

[PaDUer]

17. check these posts...VERY telling who's who..

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=585142

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=114&topic_id=7297

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=114&topic_id=8786#

[forgethell]

13. Congress passes the laws

but IRS decides how they will enforce them. The policies are not made in the WH, but in the upper reaches of the IRS. The IRS is EVIL!!

Why do they pick on the little guy?? Because the little guy can't fight back. He just pays and tries to get on with his life. You have no rights with the IRS, you are presumed guilty until proven innocent. And they are not trying to prove you innocent. The IRS is EVIL!!!

[papau]

4. All good answers - I think compassionate conservatives don't like poor!

:-)

[DBoon]

5. Because the USA does not have class warfare?

A one-sided conflict is called a "slaughter" instead.

[ramapo]

6. Easy targets

The lower classes do not have the resources to fight the IRS.

Just this week my company received a notice of levy for unpaid taxes against one of our employees' salary.

This woman was cited for failure to pay or underpayment of taxes of $24, $200, and $1700 in 1994, 1997 & 1998 respectively. Add in penalties and interest and she owed $3000.

She makes $16/hr and lives in Manhattan. The IRS levy would've required us to withhold all but $150/wk of her take home pay to satisfy the back taxes.

When we told her she was very upset, as you'd expect. She said she'd might as well give up because she barely got by on what she was bringing home. She'd likely wind up homeless if the IRS got their way.

We counseled her to get in touch with the IRS immediately. To their credit, they cancelled the levy and will hopefully work out a reasonable settlement.

The IRS will pick on the little guy because it makes their winning percentage look good. Hands off the donor class.

[amazona]

10. something is wrong

If she earns less than $25,000, they can only go back 3 years. If she earns more than that, they can go back 6 years.

No way they can go back to 1997 much less 1994 and start making up all sorts of penalties and interest.

This is what I was talking about in my last post -- they target poor people because they lack the confidence to do the research themselves yet can't afford to hire a tax attorney.

Sure, the IRS can be big and afford to negotiate. Quite likely, this woman doesn't owe a dime and will end up paying hundreds for lack of knowledge. I won't say thousands -- she would have to be the world's worst negotiator to end up paying $3,000 in a case like this.

Unless there is more to it than we have been told?

[amazona]

9. poor people are easy to rob

During the administration of the first George Bush, EVERYONE I knew who had someone die, got a letter from the IRS saying that their deceased love one had made an error on their taxes and the estate would have to cough up an additional $1,000 to the IRS. For some of these people, that was the entire estate! Now, when you have little money, you cannot hire an attorney to contest these bogus claims. I think only one person I knew wrote back and said that the IRS was wrong. That man then got back a letter saying something to the effect of, "Oops, you're right!" And he didn't have to pay the thousand dollars. But everyone else was afraid and just paid it.

I am low income and have been audited several times. I am very literate and good at math. I am patient at documenting my proof in writing. After 6 months or a year of exchanging information with the IRS, I then receive an "oops, letter." In one case where I did make an honest mistake, I asked the IRS to abate the fine, and they did after I made a few phone calls to find the right person to talk to.

Most poor people do not have the confidence or the literacy skills -- in some places, they don't have the computers to type on -- to contest bogus IRS claims. So they are a good target because they get scared and pay even if they're not sure that they should.

If you are low income, take this test. The next time you get a letter from the IRS stating you made a mistake and owe thus-and-thus amount, instead of paying it, REVIEW THEIR CLAIM. The chances are they are the one who made the mistake and if you speak up, with proof, you will not have to pay.

Don't assume the IRS computer or correspondence auditor is always right. It is to their benefit to make mistakes when dealing with low income folks who can't hire a professional to review their claim.

Correspondence audits are cheap -- if you could shake loose several hundred dollars or even a thousand dollars from someone with little education with a 37 cent stamp, you'd be tempted yourself.

Of course, this is stealing -- to take money from people who don't owe it just because you can. But whoever said the IRS was honest? They take their lead from the administration. The IRS Bill of Rights we had under Clinton didn't exist under Bush and is going to be swept under the rug now...your child's lunch money must go to Halliburton.

[happyslug]

11. When I was in College back in the late 1970s

At what we referred to a "Accounting U" (Good old Robert Morris College, Now Robert Morris University, where 90% of the Graduates were Accounting majors, at least in the late 1970s), the IRS had a good reputation. It rarely audited the poor and mostly went after the big tax cheats.

Now to do this the IRS had "auditing" teams that could review, examine, and understand the Tax reports, Income reports and other paper work of the large corporations AND higher income people. The IRS concentrated on these groups for given the money spent on the Audits such audtis brought back the most income (the rates was something like for every Dollar spent in these Audit Groups, the IRA found for the US Treasury Three dollars, a rate I beleive the IRS has maintained given the cuts to its budget since Reagan' Administration).

When Reagan became President in 1981 (The year I Graduated) one of the first things he did was to abolished the Audit teams. With the lost of these Audit teams the ability to check up on income from high income people and Corporation almost disappeared. Reagan also cut the funding for the IRS, so that the IRS had to reduce the number of audits from 3% to 2% (with most the disappeared audits in the high income audit teams).

Since that time the IRS has been able to go after only so many high income people and corporations do to lack of funds. At the same time (the 1980s) Congress told the IRS to go after tax cheats (But did not increase the IRS Budget to go after tax cheats). To fulfill these two demands, Reagan's cut of the Audit teams, and Congress demands for more audits with less funds, the IRS increased its audits of Medium income people. Such Medium Income people rarely have a income tax report that needs the review of more than one agent and thus you can have more audits with less agents (But find less overall taxes due the Government).

One of the problem of One agents audits is that mistakes by such agents could not be caught till after the Tax payer was informed of the additional tax liability (Which lead to all of the "Horror Stories " of the early 1990s of IRS misconduct when no taxes were do but Agents demanded payment.

Thus the IRS started to go after lower income people, but even here the IRS tended to concentrate on people making more than median income (For the simple reason it brought in more money than going after poor people, the old rationale, why spend a dollar to get a dime, when you can get Three dollars?).

The GOP did not like this at all, the IRS was STILL bringing in more money than it was spending but against mostly Republicans. After Clinton's Election the IRS started to set back up the old Audit Teams. This was short lived for once the GOP won the control of Congress in 1994, the GOP set the IRS budget and restricted how the IRS could spend its budget (How the GOP congress did this was to take the IRS budget money for the Formation of the Audit Teams and transferred these funds to a fund restricted to auditing the Work Income Credit program).

Thus the IRS had its budget for auditing high income people cut, but increased for people getting the Work Income Credit. The IRS hates doing Audits of the Work Income Credit. Such Audits rarely brings in more money than is spent on the audits (Through I believe that is the whole point of GOP Controlled Congress, it wants the IRS to "LOSE" money i.e. spend more money than the IRS collects on its Audits, so that the GOP can show how "inefficient" the IRS is).

Under Bush the GOP controls not only the FUNDING of the IRS, but how the IRS spends its discretionary funds, the GOP Congress has increase the money for Audits of the Work Incentive Program while making not overall increase in the Budget for the IRS (even less high income people are being audited).

What has frustrated the GOP, is that the IRS has over 70 years of Auditing experience. In most cases it can dismiss 90-95% of income tax forms as NOT FRAUDULENT within minutes of receiving the IRS tax forms (and this is programed into its computer that process the forms).

The IRS can concentrate its resources on the 5-10% of people and corporations who do try to defraud the IRS. Even here the IRS experience is a potent weapon, it can determine which of those 5-10% are most likely to produce additional income and taxes. The IRS concentrated on those and gets huge additional income for the Government (The IRS errs also, but way less than the GOP likes to claim).

These additional funds found during the IRS's audits more than make up for the lost the IRS has in Auditing the Work Incentive Program. This frustrates the GOP, it whats the IRS to lose money, but to many rich bastards try to cheat the IRS, so the IRS makes money each year. As long as the IRS can maintain some independence it can continue to do so, something the GOP would like to destroy, but which the Democrats have managed to avoid under Clinton and as a minority during Bush.

[Centre_Left]

12. EITC

While I support the EITC in principle, the system needs serious reworking as well as additional oversight. Where I work, I am frequently exposed to EITC fraud on a massive scale.

[happyslug]

14. That is good

My mother (who is NOT EITC eligible) has been in contact by the IRS for years to take the EITC credit. This is part of the Outreach program ordered by the Democratic Congress of the 1980s when it found something like 1/3 of the people eligible for EITC was not taking it for they did not know about it.

Given the income of the people we are talking about I would prefer "fraud" of people taking it when they are NOT eligible for it, than people NOT taking it when there eligible for EITC.

As to the actual "Fraud" I rarely if any see any and I work with people who are EITC eligible. Where do you work that you see so many? Or are you listening to people who hear of such fraud and repeat such claims of Fraud but never see it report such fraud for they have NO PERSONAL KNOWLEDGE of such fraud (for it never existed except in some one's mind).

[Centre_Left]

15. EITC Fraud

I am directly exposed to EITC fraud regularly. Buying and selling social security numbers is an extremely common (and lucrative) activity that I sadly see every day.

[Name removed]

16. Deleted message

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[happyslug]

18. That is NOT what I said

What I said I prefer people to get the EITC even if they are not eligible over people being denied EITC when they should be getting the EITC.

In any system you have errors, the key is biasing the errors to do the most good. I prefer a system where the inherent errors provide people the EITC credit over a system where the inherent errors favors eligible people NOT getting the EITC.

In a perfect world no errors would occur, but we are far from perfect and my point was given two possible error bias I prefer the one that gives the EITC to more people.