
IRS: Sorry, but It’s Just Easier and Cheaper to Audit the Poor - SQL2219
https://www.propublica.org/article/irs-sorry-but-its-just-easier-and-cheaper-to-audit-the-poor
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kgermino
I hate this article. It’s an important issue - the IRS not having the
resources to review complex tax returns - but it’s hard to read past the
authors efforts to build outrage around unfairness and actually understand it.

He claims throughout the article that the IRS focuses disproportionately on
poor families over the wealthy, but the first f$&@ing sentence says that the
IRS audits the working poor at the same rate as the wealthy. You can argue
that that’s not good policy, but it’s literally the definition of
proportionate. The sub-head and the first sentence literally say opposite
things.

I’m so frustrated with the article because I feel like the focus on
“disproportionate enforcement” (which the article itself says isn’t happening)
distracts from the very real and outrageous problem.

Sorry for the rant

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jjeaff
If the purpose of audits are to recover tax revenues, then auditing the poor
at the same rate as the wealthy is very disproportionate.

If the purpose of audits is merely to find and punish tax cheats, then
auditing everyone at the same rate makes sense I suppose. Though I suspect
certain higher income levels are more prone to cheating.

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notacoward
If the purpose of audits is to find and punish cheating, then auditing in
proportion to number of exemptions/deductions would make the most sense. Sure,
audit people claiming EITC more, but also audit people claiming lots of
exemptions for money transferred to/from trusts or Caymans corporations,
deductions for depreciation and business expenses, and every other special
provision in the bookshelf-long tax code. Sure, a lot of these provisions have
legitimate reasons for existing and are genuinely necessary for some people
(like EITC), but each one also has some potential for abuse and when the tax
code has thousands of them it becomes like a recipe book for those looking to
evade.

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RhysU
Simplifying the tax code would allow more audits for a fixed amount of IRS
funding.

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chimi
> For now, the IRS says, while it agrees auditing more wealthy taxpayers would
> be a good idea, without adequate funding there’s nothing it can do.

Why not pay out a portion of the tax recovered from audits as a bonus. The IRS
auditor gets 1-10% of the tax they recover for the people of the USA.

It'd work like the commissions the big accounting firms receive of the amount
of tax they save for their clients.

I bet there'd be a benefit in retaining those really smart auditors who could
pass all the tests as well. I can't help but imagine some of those auditors
_leave_ the IRS and go _straight_ to those aforementioned accounting firms.
Farm team style like the Senators and Representatives do to lobbyists.

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mimikatz
Incentives matter and that is a really dangerous incentive.

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chimi
The perverse incentive is rewarding an organization for enabling the
defrauding of the American people. My bonus scheme will only _balance_ that.

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sokoloff
I literally had to read your comment twice, because you're creating an
incentive for the agents of the IRS to strongarm the public because it
directly lines their pocket. You're also creating an incentive to bribe IRS
agents, because why take 1-10% if a fraudulent taxpayer would readily offer
you at least twice that amount...

The reason I had to read it twice is I thought you were suggesting the
"organization" in question was the IRS itself.

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smkellat
The Improper Payments Act report shows just under $19 billion was lost in
improper EITC payments in FY2018. NASA’s FY2018 budget was $20.7 billion just
to compare the scale of the loss. Every little bit of fraud, waste, and abuse
does add up to something quite large in the aggregate.

ProPublica is asking the wrong questions. They should be asking what we should
do with refundable tax credit programs that have such high error rates in
payments. What we’re doing currently isn’t working best.

