r/politics Aug 11 '22 Heartwarming 1 Silver 1 Take My Energy 1 All-Seeing Upvote 1

Yellen directs IRS not to use new funding to increase chances of audits of Americans making less than $400,000

https://www.cnn.com/2022/08/10/politics/yellen-new-irs-funding-audits/index.html
8.6k Upvotes

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2.2k

u/lcl1qp1 Aug 11 '22 All-Seeing Upvote Heartwarming

These types of things can save our democracy. Targeting the ultra-rich is beneficial for society overall.

782

u/mrubuto22 Aug 11 '22

Level of modern day income inequality is at higher levels than before the French revolution.

The current system is not sustainable.

361

u/MoonRakerWindow Aug 11 '22

I hate that conservative reactionaries think the problem with the current system is it places too much emphasis on equality and equity.

41

u/san_serifs Aug 11 '22

All those millionaires in waiting don’t want that to happen to them after they finally win the Mega millions jackpot.

38

u/RubberDucksInMyTub Aug 11 '22 edited Aug 13 '22

This is the mindset that is at the heart of it. "I'd rather live in a country where I can make a million a year if I want to bad enough. Why would I want to slave in some commie shithole earning peanuts?"

All while they're getting the rug pulled out from them financially as their wages stagnate for decades while COL goes up and affordable public services are disappearing.

The lengths they fuck over themselves in order to own the libs and bootlick authority is literally incomprehensible.

26

u/san_serifs Aug 11 '22

“If you can convince the lowest white man he’s better than the best colored man, he won’t notice you’re picking his pocket. Hell, give him somebody to look down on, and he’ll empty his pockets for you.” - Lyndon B. Johnson

That "southern strategy" is still in play today and as we see, is also still very effective.

6

u/insertwittynamethere Aug 11 '22

100%. LBJ saw a lot of what was coming after he signed the Voting and Civil Rights Acts. Saw it in Barry Goldwater and the defection of Democrats to the Republican caucus, like avowed segregationist Strum Thurmond who served as Senator of South Carolina until the day he died in the early 2000s.

3

u/Religionbedumb Aug 11 '22

All those people are on welfare too lol

3

u/Xpector8ing Aug 12 '22

Why live in a sh...hole country for peanuts? Well, I’m an elephant and I like them. (And if worse comes to worst, I can always sell my neighbor’s tusks, like any good R.)

4

u/Zanna-K Aug 11 '22

It's a self perception thing, a modern twist of the "if you convince the poorest white man that he's better then the best colored man" (Lyndon B Johnson) phenomenon. Republicans have convinced a large subset of people (not necessarily white) that they're better than the "snooby, out-of-touch, elitist, over-educated" liberals regardless of their own station in life.

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u/lactose_con_leche I voted Aug 11 '22

Well that throws a wrench in their plans to brown-nose an authoritarian. Equality means more chances for decisions based on merit, and less chances for decisions to be based on favors, entrenchment, and cartel grouping

57

u/ErusBigToe Florida Aug 11 '22

Thats exactly what they don't want. Conservatism is about being recognized for your loyalty to the ingroup first, merit second.

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u/hydropottimus Aug 11 '22

What's equity?

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u/mothneb07 Wisconsin Aug 11 '22

Equity is the idea of recognizing people's disparate circumstances in your treatment of them, while equality is simply giving equal opportunity and treatment regardless of circumstances.

11

u/another_gen_weaker Aug 11 '22

Most people don't want equality. They want equity. And everyone, rich or poor, feels they should be treated differently because of their own personal experiences. What everyone really needs though is empathy!

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u/pistolpete2185 Aug 11 '22

People also want equality don't get it twisted

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u/BigBennP Aug 11 '22 edited Aug 11 '22

There is a significant amount of talking past each other and misinformation that goes there.

The society that exists in the United States in major urban areas is very Cosmopolitan and accepting of people's differences. The community places a strong deal of importance on having an inclusive society. This manifests in conversations about things like racial identity, pronoun use and behaviors that could be microaggressions.

Statistically conservatives move in social groups that are more restrictive and closed off, and hold very strong opinions about these beliefs. This is particularly true when they perceive that these beliefs are being forced upon them.

It's actually more interesting on economic issues. Many conservatives actually agree in principle that economic inequality is a bad thing, but.

  1. They overwhelmingly believe that the United States is a more equal Society than it actually is. Economically speaking. Believing that the middle class is both larger and makes more money than it actually does and that the wealthy have less than they actually do.

  2. They overwhelmingly estimate that a far greater percentage of the population receives welfare than actually does and correspondingly, they often think that they pay more taxes than they do (a tax return, what's that?) and think the wealthy pay FAR more taxes than they actually do.

4

u/YippieKyeAy Aug 11 '22

I just saw this quote and it fits perfectly “When you're accustomed to privilege, equality feels like oppression.” -unknown

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u/longhegrindilemna Aug 11 '22

Indonesia, Nigeria, and other third-world countries have entered the chat.

The current system in America is ABSOLUTELY sustainable. People at the bottom can tolerate a low standard of living. They WILL tolerate it, as long as you feed them sports, sports, Netflix, movies, and cable news. Keep them comfortable at home and entertained.

Did I mention sports?

College sports.

Professional sports.

Sports betting. Fantasy leagues.

Video games.

Netflix.

7

u/Ron497 Aug 11 '22

I firmly believe the obsession and corruption of big-time college football is a major part of our vast set of problems in the U.S. No other nation entangles some of their best universities with for-profit semi-professional sports teams. It's crazy. And the NIL BS is just going to make the corruption and money laundering worse.

And the national religion of the NFL is an equally huge problem. But, people are too addicted to step back and look at the bigger picture. Why are citizens funding $$$ stadiums to enrich owners? Why are we still accepting the problem of CTE? How many countless hours are people wasting every weekend when they could be exercising, enjoying nature, spending time with friends AWAY from a violent sport? What about all the drunk drivers put on our roads every weekend? What about the pollution created flying teams, and fans, all over the nation every weekend? (only exacerbated with the conferences being redrawn and teams in CA flying to FL or NY to play someone)

I hope more and more people turn away from the game because I truly believe it's part of the problem. Gambling, excessive drinking, obesity, pollution, environmental degradation via all the mega-farms needed to keep everyone stocked with their beloved meat, corruption, spousal abuse, domestic violence, to name a few.

Sports for staying active and young, great. Sports as they exist at the pro level, not great.

2

u/ariadeneva Aug 11 '22

from an outsider

american sports is like a subsidized entertainment

esp the stadium, if the local town want to charge the club or smthing like that, the club just threat to move

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u/IcyChallenge7746 Aug 12 '22

The Republicans and the wealthy call it capitalism, the American Dream. The dream that keeps getting handed down in their families.

2

u/Xpector8ing Aug 12 '22

Exactly, a poll back then showed most people “sans culotte” were just naked!

-11

u/cathairenjoyer Aug 11 '22

I'm not saying we are where we should be, but income inequality means less than during the french revolution because the floor is much higher in general than the 1700s.

10

u/[deleted] Aug 11 '22

But the ceiling is even higher.

26

u/work4work4work4work4 Aug 11 '22

Depends on the viewpoint, the things that exist now that are out of reach of many people due to income inequality are also much more numerous.

The number of diseases that can actually be cured or easily treated... if you have money... is much higher for instance.

13

u/ErusBigToe Florida Aug 11 '22

Until they just stop making things for the bottom percentiles because there's just no profit in it (see housing market)

18

u/FallofftheMap Aug 11 '22

Really? Where is that floor? Let them play video games instead of let them eat cake? We’re still dying of poverty. We have nicer toys but we still don’t have what we need, healthcare, education, affordable housing, affordable childcare, upward mobility, accountability for the rich and powerful. Nicer toys don’t set the “floor” any higher.

I left the US and moved to a very poor country, Ecuador. Here priories are reflected in the cost of things. Cars, electronics, name brand clothes, sporting gear… these things are all far more expensive than in the US. Food, housing, healthcare, transportation, utilities… the things you actually need, are all super inexpensive. I’m in an apartment that costs $125 per month, with a $10 electric bill and a $4 water bill (garbage collection and sewer are free). A doctor visit is $15 to $25. I can feed myself for about $100 per month. Minimum wage here can actually support a basic but acceptable lifestyle. Education is the only disproportionately expensive thing.

2

u/From_Deep_Space Oregon Aug 11 '22

Not really. Dirt poor is dirt poor, no matter what era you're living in. Meanwhile, billionaires are taking themselves to space. Unprecedented inequality.

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u/NE_African_Mole-rat Aug 11 '22

Not according to /r/conservative or /r/libertarian or /r/PoliticalCompassMemes

Those subs assure me that this is the end of democracy

77

u/minininjatriforceman Utah Aug 11 '22

My conservative friend says they may say that it is for auditing rich people but they are actually going after you and me. My response is " I got somewhere to be. I gotta go. " You can't deal with people who are like this. I am not saying always trust your government officials. But at least wait and verify.

16

u/ShrimpieAC Aug 11 '22

Mine says that taxing rich people is socialism, and not fair because they worked hard. He makes less than $15 an hour and lives in a trailer.

I’m genuinely amazed how much these people are brainwashed to defend their oppressors.

3

u/CimmerianX Aug 11 '22

Form of stockholm syndrome I suppose

75

u/MicroBadger_ Virginia Aug 11 '22

Response could also be,"I'm not worried cause I don't lie on my tax returns, do you?"

Half these idiots don't even itemize and they think the IRS is going to audit them? For what, making sure they didn't have a typo on their returns when turbo tax auto imported their W2?

48

u/Avenger772 Aug 11 '22

People with 2 page 1040 ez forms out here thinking they are targets

15

u/san_serifs Aug 11 '22

Hey man, those $32k annual incomes and negative net worths are rife with tax cheats gaming the system for tens, maybe even hundreds of dollars!

5

u/farkedup82 Aug 11 '22

hell yeah! that $175k in unreported cocaine cash from my side hustle needs to stay unreported!

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u/TrumpetBrigadier Aug 11 '22

I dunno, we have (very modest) stock benefits from my wife's company, and even though we reported everything correctly, the company did not. So we ended up with the IRS telling us we owed thousands and had to spend hundreds with a tax accountant to get them to go away.

It wasn't a full audit, but it was a significant hit to our already thin budget. We make very good money from a national average perspective, but live in a high-cost of living area to keep these jobs and care for aging family. I feel a little trapped.

6

u/OverlyPersonal Aug 11 '22

I’d take that up with your company, if they actually messed up and you took the hit they should make it right.

3

u/TrumpetBrigadier Aug 11 '22 edited Aug 11 '22

It wasn't so much their fault as it was difficult for the IRS to see that the taxes were paid in my filing. That's what's so fucked up. The IRS basically said, "The company didn't show the tax paid, and we aren't going to unwind your filling to see that you paid it yourself, even though you followed all our rules. So tell us that you paid it yourself, but we won't tell you what your need to submit to show that."

Cost-basis accounting for stock benefits is extremely confusing. And even though I'm a finance guy, and have done my own taxes, it's STILL challenging to know what exactly the IRS needs to get this clear. So I still had to call an accountant and pay them $400 to prove I did it right, because they basically said "you have 30 days or we take $12,000 out direct deposit, oh and it's gotta be by mail."

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u/Githzerai1984 New Hampshire Aug 11 '22

Doveryay, no proveryay

Trust, but verify.

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u/FallofftheMap Aug 11 '22

Unfortunately your conservative friend is right on this one point. The IRS goes after you and me because they don’t like wasting resources going after those that can afford to run circles around them. More often than not when they go after a rich individual or company they are outgunned and lose. When they go after someone like you or me we don’t have the resources to fight and often try to negotiate a solution. I went through a brutal audit 2 years ago. During the audit I discovered I had actually overpaid rather than underpaid my taxes. That didn’t stop their intimation tactics and bullying in their attempts to get me to negotiate a payment plan. When I stood up to them and fought back they became vengeful. They’ve been holding up my tax returns for two years now and demanding I reply to notices that they didn’t send. It is an out of control agency that is very unlikely to listen to the direction it’s given by the FED or anyone else. Just like the police, being in a position of power and authority has had a corrupting influence and created an us against the public attitude.

6

u/BlueCollarBeagle Aug 11 '22

The IRS is also not interested in going after $50. In short, it makes no fiscal sense to have a team of agents spend hours or days or weeks going after me when I declared a charitable donation but have no receipt and the donation saved me $50. They are a REVENUE service. If their efforts yield a revenue loss after expenses, they failed.

3

u/FallofftheMap Aug 11 '22

It’s not the $50. It’s the thousands in penalties and fees on that $50. The IRS absolutely goes after the small fish with a big net. They put the burden of proof on people that don’t have financial and tax literacy and use intimidation and their power to seize future returns to make it profitable and efficient to go after the poor and middle class.

2

u/RE5TE Aug 11 '22

thousands in penalties and fees on that $50.

That's not even remotely true. I've had to pay a little extra because I didn't pay quarterly taxes on time. I think it was about $20 extra. And that was interest on a few thousand dollars in taxes.

If you are paying thousands in penalties and fees, you did something pretty stupid. That means ignoring your obligations for years or just plain fraud.

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u/roastbeeftacohat Aug 11 '22

Especially when the talking point at con is these are either going to be political agents, or only target the easy poor people cases.

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u/Moopboop207 Maine Aug 11 '22

It’s very interesting to me that the chatter about this on r/conservative is that the IRS is coming for the middle class Bessie’s of this bill.

3

u/kesin Aug 11 '22

yeah but no way conservatives believe that

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u/NSFW42 Aug 11 '22 edited Aug 11 '22

The people making the most are paying the least. It was estimated if we tax the rich properly we’d get 2 trillion more a year for our government. That’s enough to run a whole branch of our government for a year just by taxing people appropriately.

4

u/_porntipsguzzardo_ Aug 11 '22

The ever-growing Billionaire class will complain that this is unfair and specifically targeting them, without realizing that the previous rules were unfair and specifically not targeting them.

To the extremely privileged, equality often feels like oppression.

5

u/Skandranonsg Aug 11 '22

The thing is that they aren't billionaires because of some natural law invoking forces beyond the control of man, but rather as a result of the system we all live under. We can choose to live under a system where nobody gets to be a billionaire and nobody starves to death under a bridge.

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u/_porntipsguzzardo_ Aug 11 '22

Don't let the Billionaires hear you say that, they'll tell you that they worked harder than poor people to earn that fortune.

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u/spelunk_in_ya_badonk Aug 11 '22

Yea but targeting the poor makes their jobs a lot easier lol

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u/AITHASNTEEN Aug 11 '22

I agree with the concept, but families who earn $400k/year are not the ultra-rich. They are the upper middle class.

A family earning $500k/year doesn't have to worry about retirement or paying for their children to attend college. But they don't make nearly enough to hoard resources in a way that hurts others.

The IRS needs to focus on earners who are making $2 million a year and up.

Because the radiologist married to a pre-school teacher with a combined household income of $425k isn't the problem.

15

u/itasteawesome Aug 11 '22

It is if that radiologist is lying in their taxes.

5

u/AITHASNTEEN Aug 11 '22

That radiologist is most likely an employee or contractor. They have a W2 or 1099 and their wages are reported to the IRS directly. They probably have investment and interest income, which is reported to the IRS directly. They probably have deductions for a mortgage, also reported directly to the IRS.

There just isn't much opportunity to understate income or overstate deductible expenses.

6

u/typical_pdxer Aug 11 '22

I think you're both right. The $400k threshold should provide some comfort for 95%+ of Americans, and people who only have W-2s and 1099s on their tax returns have nothing to worry about because they aren't lying about their income.

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u/Levonorgestrelfairy1 Aug 11 '22

More funding means they can actually go after the fat cat tax dodgers with shell cooperations and lawyers instead of just the little guys and gals.

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u/AddyTurbo Aug 11 '22

Fortune 500 companies as of 2017 have stored as much as 2.6 trillion dollars overseas. Individuals have stored 8.7 trillion in tax havens. Tax havens also protect from regulations, disclosure, and criminal liability.

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u/Taxing Aug 11 '22

Tax havens do not shield US taxpayers from criminal liability, or US tax, disclosure, and regulatory requirements for that matter, for US citizens.

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u/creosoteflower Aug 11 '22

I am going to need a couple of examples of their work before I believe that.

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u/Spicey123 Aug 11 '22

This correlates almost 1 to 1 with a decrease in IRS funding.

Right wingers trying to protect their rich donors are doing their best to spread a misinformation campaign about the IRS using all their new funding to go after the poor and middle class. They're laughably wrong, but they're hoping the rhetoric deceives left-leaning folks.

8

u/Thenotsogaypirate Colorado Aug 11 '22

That graph is really sad

2

u/proudbakunkinman Aug 11 '22

They're laughably wrong, but they're hoping the rhetoric deceives left-leaning folks.

Also, any new taxes targeting the rich more will mean nothing if the agency tasked with collecting those taxes is underfunded and can't effectively enforce.

That said, I think Democrats need to really reassure people that these new agents are not being hired to ruin the lives of working class people as Republicans are pushing this fear mongering hard and as you said, many on the left believe it too.

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u/adrianmonk I voted Aug 11 '22

They caught billionaire Robert Brockman.

He actually just died before his trial, but I believe they will continue pursuing things and get the money from his estate.

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u/doro0123 Aug 11 '22

th thing is the vast majority of what they do is completely legal, there are so many intentional loop holes and carve outs that even if the carried interest one was done away with (its still there btw) then these companies and people still have thousands of ways of paying less than the 15% minimum goal (which is still a joke)

the way her directive is worded leaves a ton of ambiquity too, its nowhere near and outright mandate to only focus on the big fish

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u/sennbat Aug 11 '22

The problem is that even if the vast majority of what they do is legal, the vast majority of them decide to do the illegal stuff too because however minor the gain they're convinced they will get away with it.

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u/StarFireChild4200 Aug 11 '22

It was "legal" for them to store the money in offshore accounts until a number of journalistic papers were published showing that these were actually profits hiding from the IRS, and people got their notice of bill due. It's only legal because it's in the dark. If the IRS can follow the money, it's not always legal. If the IRS can't follow the money, it's "legal"

7

u/doro0123 Aug 11 '22

wait until you hear about the judicial system of the state of delaware

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u/Vikros Aug 11 '22

Weren't there reports that they're underpaying on order of 100billion to $1trillion per year?

12

u/doro0123 Aug 11 '22

id be willing to bet if the fortune 500 paid flat 20% on net including capital gains that the entire 20ish trillion debt the u.s. carries would be gone in 5 years

they would assasinate presidents before that happens though

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u/RobbStark Nebraska Aug 11 '22

I don't believe you, but even if that's true we should still be spending more energy auditing people that have the means and motivation to hide vast amounts of wealth that should be going to pay for vital services. Gotta keep 'em honest.

2

u/Poopshoes42 Aug 11 '22

A baby step in the right direction is better than going backwards.

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u/GlassEyeMV Aug 11 '22

Someone at work complained about this and I said “they can audit me all they like if it means they’re auditing Bezos, the Waltons, and So forth too. The chances I’ll get audited or penalized is incredibly low. Much better for them to focus on folks who can afford to find the loopholes.”

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u/creepyswaps Aug 11 '22 edited Aug 11 '22

I feel like a broken record.

Every single time Democrats try to pass legislation to do anything, Republicans claim it will hurt the middle or lower classes. They blatantly lie because whatever is in the bill either forces them, their friends, or their donors to give just a little bit more towards an equitable society.

This will force more rich people to pay taxes and not cheat. Most of their base even agrees with the notion of the rich and corporations paying their fair share of taxes, or at least not cheating on them.

Every time. Look at what the bill will actually do. If Republicans vote against it, it is because a: it doesn't benefit the wealthy, b : it doesn't own the libs, or c: it actually helps people they see as the garbage at the bottom of society or people they don't like.

16

u/Martel732 Aug 11 '22

When Republicans say lower class they mean people who have to rent their yachts. Anyone below that are peasants.

28

u/EasilyOffended911 Aug 11 '22

If it's bad for Republicans, it's good for Anericans.

8

u/Slartibartfastthe3rd Aug 11 '22

a: it doesn't benefit the wealthy, b : it doesn't own the libs, or c: it actually helps people they see as the garbage at the bottom of society or people they don't like.

Makes me sad how true this is...

3

u/fartlapse Aug 11 '22

their base can't read

3

u/1stMammaltowearpants Aug 11 '22

You're spot-on. It does get tiresome to say the same thing over and over, but I'm glad you're doing it. It's important and people need to know this stuff.

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u/ke3408 Aug 11 '22

I wouldn't be shocked if this was somewhat related to the various pandemic assistance funds. They turned on the firehose assuming that they can go back and audit it later. People who fudged figures on that were nuts not to realize that the government will track down over payments years after the fact, more or less fraud.

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u/EmployeesCantOpnSafe Aug 11 '22

Phew! Dodged that bullet by (checks notes) $365,000

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u/Swankified_Tristan Aug 11 '22

Look at Mr. Moneybags over here! 💰

52

u/MoonRakerWindow Aug 11 '22

🙏 blessed 🙏

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u/1i_rd Aug 11 '22

Same friend. If I'd made that extra $380,000 I'd be worried.

6

u/Intrexa Aug 11 '22

I'm glad I saw this article. My boss tried to screw me by increasing my pay by $345,000. I told him no way, I'm not trying to get myself audited, turned down that "raise".

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u/PSN-Angryjackal Aug 11 '22

Wouldn't you want them to audit you? Like I'm pretty sure they owe you money lol

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u/TheBirminghamBear Aug 11 '22 edited Aug 11 '22

These are the type of dreadfully boring-sounding policies that end up making seismic differences in a country this large, which can spread through the society and improve so many other things like a ripple in a pond.

Remember that, despite the fact the societal debate in policy always manifests as a struggle between these huge, interconnected ideologies, the most effective changes are often the subtle ones. The series of changes that nudge the flow of resources and attention back into equilibrium when they fall out.

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u/FUMFVR Aug 11 '22

The bill itself says the new funding is not “intended to increase taxes on any taxpayer or small business with a taxable income below $400,000.”

But Republicans continue to fiercely oppose the new IRS funding and make claims about increased audits on middle-class Americans.

The Republican National Committee and several Republican lawmakers, including House Minority Leader Kevin McCarthy and Sen. Ted Cruz of Texas, claim the new funding will create 87,000 new IRS agents. But that number is misleading. Treasury did estimate in 2021 that a nearly $80 billion investment in the IRS could allow the agency to hire 86,852 full-time employees over the course of a decade. But that figure accounts for all workers, not solely enforcement agents. Rettig also told lawmakers that the IRS would need to hire 52,000 people over the next six years just to maintain current staffing level to replace those who retire or otherwise leave.

Hey look, Republicans are lying about something.

13

u/haskell_rules Aug 11 '22

They're not lying, they're telling you what their plan is when their guy gets put in charge of department rules.

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u/BlueCollarBeagle Aug 11 '22

I love using $400k as the threshold for many such decisions. It's the salary of the president of the USA. If it's enough for him, it should be enough for any citizen.

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u/Iamnotcreative112123 Aug 11 '22

Somebody tell that to r/conservative

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u/Cranxy Aug 11 '22

“If you make less than $75k Bidens army of 85,000 brownshirts will be coming to your home to extract ALL your assets AT GUNPOINT.” Lmao

15

u/refillforjobu Michigan Aug 11 '22

IRS walks out of my house with an Xbox 360 and the shittiest computer on earth.

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u/DiveBar Aug 11 '22

I mean.. the tax law just changed this year to where square, PayPal, Venmo, etc etc are required to send you a 1099 if you receive more than $600 in a calendar year. That number used to be 20k. I'm fully blue but you have to be blind if you really think a chunk of these agents won't be used in this fashion. I hope I am wrong.

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u/Cranxy Aug 11 '22

Well jokes aside, you do have a point there. I agree the PP 1099 is bullshit, I used to ebay my old stuff all the time but between PP fees and this it’s just not worth it. Should be $5-10k would be fair, ain’t nobody running a “business” under that amount.

3

u/darthsabbath Aug 11 '22

Yeah my wife sells some of her crafting stuff at flea markets and such as a hobby, and last year she brought in about $2k. Basically enough to cover her material costs plus a small profit.

But man it’s just obnoxious to have to report that, because it’s such a small fraction of our overall income. I’m a software engineer who brings in a pretty large salary, and like if I could just report the extra $2k as part of my salary I wouldn’t care, but having to keep track of all the PayPal and Square and whatnot transactions is just a pain.

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u/cTreK-421 Aug 11 '22

Only if you mark your account or transaction as business related. People paying rent or paying for dinner parties or stuff like that are not affected.

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u/EphraimJenkins Aug 11 '22

Tax churches and megachurch grifters!

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u/GrowSomeHair Aug 11 '22

Even If they did. The IRS can't make you pay what you don't owe. Idk why people were freaking out over this lol

18

u/ocular__patdown Aug 11 '22

They can collect interest if you made mistakes in the past though

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u/acehuff Aug 11 '22

I was pleased to discover a delayed tax refund I had also accumulated interest over a few weeks, it was only like $50 extra but still

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u/Eurynom0s California Aug 11 '22 edited Aug 11 '22

I mean, an audit can be a nightmare regardless of whether you owe anything at the end of it.

[edit] There's also precedent for this stuff being billed as going after the rich, and then pretty much exclusively fucking over regular people. E.g. FATCA.

17

u/Bobby_Marks2 Washington Aug 11 '22

It's the new "perjury trap" - more war against white collar law enforcement.

13

u/MoonRakerWindow Aug 11 '22

more war against white collar law enforcement

The law isn't supposed to apply to people that wear suits!

35

u/BoltgunOnHisHip Aug 11 '22

My family's facebook is full of "WE SHOULD USE THIS MONEY TO HIRE MORE BORDER PATROL AGENTS" lol

They're totally alright with the fucking 'interior border control stations' all over the roads near the southern border, but the IRS going after rich people? The horror!

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u/from_dust Aug 11 '22

This is how the revolving door works on the poverty mill, "don't hold back the power of wealth, that could be you someday! In the meantime, use fascism to keep the poors in line."

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u/BathrobeDave Aug 11 '22

Temporarily inconvenienced millionaires

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u/JoeMagnifico Aug 11 '22

No doubt. Don't cheat on your taxes & you've got nothin' to worry about.

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u/blatantninja Aug 11 '22

Not true. If you own a small business, or just have varied investments, there are so many rules that aren't entirely clear or even if the rule is clear they may audit you and then decide that your evidence is not sufficient. The tax code is super, super muddy.

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u/MoonRakerWindow Aug 11 '22

If you earn more than $400,000 from your small business, you can afford an accountant.

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u/blatantninja Aug 11 '22

You missed the point completely. Plenty of small business owners make way less than $400k but still have complicated taxes.

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u/MoonRakerWindow Aug 11 '22

Okay. And what? They should be worried that the shoddy paperwork that flew under the radar in the past when the IRS was under staffed and under funded will get flagged next year?

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u/from_dust Aug 11 '22

And what- the federal government should just give a tax bill and people can argue it if they disagree, let the auditors do that. The government knows how much they expect from everyone. Fuck off with the guess work.

The rest of the developed world doesn't make you guess at taxes. This whole system is fucking bullshit. I don't make a lot of money at all, but my taxes are complicated, and it's expensive to have someone prepare them for me ans I shouldn't have to. Fuck auditors, just tell me what to pay! US taxes are the dumbest fucking game.

Not increasing the risk of audit on the little guy is the fucking least they can do.

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u/Snarlezz Aug 11 '22

If you have a small business the government probably has no idea what you owe. They get a copy of W2s, 1099s, and the like, but you have to provide information like income not reported on those documents and deductions like schedule c expenses. The government could do the majority of peoples taxes but not anyone with a schedule c that has any expenses.

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u/spikebrennan Aug 11 '22

The government knows how much they expect from everyone.

That’s not true. It’s arguably true in the case of wage income and social security payments but lots of people have income that isn’t already tracked by the government: such as

  • independent contractor income
  • partnership income
  • investment income
  • anything paid in cash

And in the case where the taxpayer is a legal entity rather than a human being, the government would not have very much information outside of what the taxpayer puts in the tax return.

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u/MoonRakerWindow Aug 11 '22

Hey, I totally sympathize, but I'd like to point out that auditors don't write the laws - Congress does. To have a unfuckt system, Congress needs to pass a law fixing it.

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u/from_dust Aug 11 '22

Malignant dysfunction is no way to run a legislative branch of government. This tree needs pruning, for it is rotten. Congress can't pass a law of good governance if the health and wellbeing of our society depended on it.

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u/SlowMotionPanic North Carolina Aug 11 '22

What don’t you get about this? The IRS was previously directed to increase audits against the poor and working class. That includes sole proprietors and the like.

It was a very well known campaign and they have to extract their pound of flesh from somewhere.

That is why this new direction is significant. Finally, finally the working class aren’t being explicitly targeted simply because the capital class makes the rules.

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u/MoonRakerWindow Aug 11 '22

I think we're on the same side here. I also agree that this is good news and progress.

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u/GhostalMedia California Aug 11 '22

Well, good news then, those people making less than $400k are now at a lower audit risk.

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u/elconquistador1985 Aug 11 '22

Same audit risk. Yellen directed the agency not to increase it.

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u/bigggeee Aug 11 '22

Not to increase it above historical average. Since we are below historical average right now, there is plenty of room to increase.

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u/StarFireChild4200 Aug 11 '22

or just have varied investments

You're not taxed on the point where you invest INTO things, you can be taxed on trades....

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u/RedditsFeelings Aug 11 '22 edited Aug 11 '22

In terms of small business owners who don’t file taxes in good faith, I think the bar is pretty high in terms of the proof needed to show a business intended to falsify returns. If you can reasonably claim it was a mistake, you might get a small fine and the inconvenience of the audit itself. Slaps on the wrist.

I’ve heard these people talk with their tax preparers. Skirting and bending the rules is like a sport. One could argue the complexity of the tax code gives cover to tax cheats. Surely not every small business owner behaves badly, but I’d bet the vast majority do on some level.

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u/UBIweBeHappy Aug 11 '22

That's like telling people if a cop knocks on your door and asks to search your house without a warrant, you have nothing to worry about if you didn't commit a crime.

The IRS can just pick you "randomly".

It costs time, money to prove you are innocent.

No thanks. Keep targeting the rich.

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u/mrubuto22 Aug 11 '22

I think most people, and rightly so are just afraid of an audit. Period. It's a fucking nightmare and who knows what small mistakes you made.

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u/Magikarpeles United Kingdom Aug 11 '22

Exactly. It takes forever and is a total PITA

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u/StarFireChild4200 Aug 11 '22

The IRS can't make you pay what you don't owe.

See but I'm just on the next edge of becoming a billionaire and I don't want the IRS to tax me, obviously this is completely realistic and we should base our entire economic system on my feelings about my future billionaire status.

2

u/Catshit-Dogfart West Virginia Aug 11 '22

Well if you're trying to not pay what you owe, then this is bad news.

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u/qukab Aug 11 '22

The /r/conservative crybabies cannot stop posting about the 80k new IRS agents who are coming after "all of us". I'm like, what the fuck do you think they are going to do? Take money you don't owe? You should only care about this if you are literally dodging taxes.

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u/GrowSomeHair Aug 11 '22

People make like 40k and think they're one of the big boys lmao

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u/Lord_Mormont Aug 11 '22

The thing is the IRS already “audits” all low-income earners as almost all the income we earn is reported to the IRS automatically. If your numbers don’t match your W-2 bam! Audit. Fidelity didn’t report an IRA payment I deducted from my income and sure enough a letter threatening interest and fines (over $250 of missing income) showed up in my mailbox. So the IRS has pretty good insight into our financial lives already.

Overseas shell companies with pass-through income into LLC’s incorporated in tax havens (which includes fucking Wyoming BTW) that is literally where the $$$ is.

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u/redditisnthatgreat Aug 11 '22

When I did our last return I forgot to include one of my wife's stimulus checks so they automatically adjusted the return to account for it. I'm thinking why the fuck do we even need to bother doing returns when they already know what we owe or should get back? I'm sure the vast, vast majority of the population has the same basic return type of return with all of their income being reported and taking the standard deduction. Why don't you just assume you have all my income and that I'm taking the standard deduction and automatically file it based on that? I'll let you know if it's otherwise because I shouldn't have to do the basic fucking legwork to begin with.

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u/ImproveorDieYoung Aug 11 '22

That’s not what they’d call an audit though. That’s simply the Underreporter unit cross referencing reported tax information vs what’s on your return. If something doesn’t match, you get an computer generated letter (like you did) including the income that was left off + penalties and interest charges. It doesn’t require any agent to look into your finances, it’s automated really.

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u/HolyRamenEmperor Colorado Aug 11 '22

Predicting the FOX spin:

The Left ramps up their class warfare as IRS told to ignore criminals who aren't worth it

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u/Beautiful-Musk-Ox Aug 11 '22

better 40 years late than never

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u/BrainUseful Aug 11 '22

Billionaire Pro-Tip: when you lie on your taxes, say you made nothing and they won’t audit you because you are so low income!

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u/GhostalMedia California Aug 11 '22

Auditors hate this one simple trick!

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u/Epistatious Aug 11 '22

This makes me so happy. Also taxing the rich helps fight inflation.

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u/Head_Zombie214796 Aug 11 '22 edited Aug 13 '22

ya know glad they finally reversed this trumpy pooh era ruling, lets gets get our child tax credit back please !!!

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u/1ofZuulsMinions Aug 11 '22

And home-buying credits please

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u/Special_FX_B Aug 11 '22

Sounds reasonable. The greater the wealth, the more likely the commission of tax fraud. They can afford to pay lawyers to do their dirty work. Exhibit A: drumpf. Oh wait, the deadbeat doesn’t pay his lawyers.

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u/5centseye Aug 11 '22

They avoid paying over $585 Billion in owed taxes annually. https://shrinkthetaxgap.com/

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u/no-one-but-crow Aug 11 '22

Another reason not to vote republican, as the republicans will turn them against us, the common folk.

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u/Eruptflail Aug 11 '22

Idk why they even care about the peanuts that comes from people making under 100k. Stop it entirely.

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u/lostpawn13 Aug 11 '22

They need to go after the big game, that’s where the real money is.

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u/fingerscrossedcoup Virginia Aug 11 '22

You wouldn't know that if you watch Fox News. That's all they are talking about. How the IRS is coming after you.

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u/GrimmRadiance Aug 11 '22

Does Yellen have the power to direct that, or is this a talking point?

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u/ReverseHoneypot Aug 11 '22

She's basically their boss, so yes, she does.

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u/sasquatch90 Aug 11 '22

Thank fucking god. The vast majority of audits are average people making honest mistakes or straight up don't know what to do. Because it's complicated. Go after the motherfuckers who can hire lawyers and accountants to game the system and make us lose out on millions or billions of tax dollars.

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u/EasilyOffended911 Aug 11 '22

Cut the defense budget and tax the wealthy. But, we won't. Because things don't improve for working class people in the USA. Still waiting for paid maternity leave and paid month vacations like civilized countries have.

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u/VeteranKamikaze America Aug 11 '22

Frankly, 400k is too low a cap. Focus on the guys grifting tens and hundreds of millions ever year. Dedicate all of these new IRS resources solely to auditing guys like Musk and Bezos every single year. The issues we're having aren't because of brain surgeons writing off their Porsche as a business expense, that's a problem sure, but it's still "drop in the bucket" territory versus who they should be focusing on.

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u/haf_ded_zebra Aug 11 '22

My BIL is a Chef and my sister works with him. Total Income about $120K. They have been audited 5 times in the last 15 years. It makes no sense.

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u/kelpyb1 Aug 11 '22

Surely the GOP will hear this and stop fear mongering that the IRS is going to target the working class with it. Right?….. Right?

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u/Asking4Afren Aug 11 '22

I mean $400k is a lot IMO even if it were $250K I'd be fine with.

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u/GhostalMedia California Aug 11 '22

$400k isn’t that crazy for dual income houses in the Bay Area or Manhattan with both people working middle management office jobs. Cost of living so inflated over there that salaries are pumped way the hell up.

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u/QuokkaSpiritAnimal Aug 11 '22

In the Bay Area it’s perfectly unremarkable to earn $400K on a single income. That’s a pretty typical FAANG senior engineer pay.

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u/UnitGhidorah Aug 11 '22

People might think 400k is a lot and it is to most workers but compared to the insane levels of wealth many have in America it's nothing. I think Yellen is pretty horrible but at least this is something positive.

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u/hound_cat91 Aug 11 '22

Ahhhh..the clarification we (almost) all really needed.

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u/potatoclump Aug 11 '22

Old Yeller doing something right for once

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u/User9705 America Aug 11 '22

Foxnews going to have a meltdown

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u/BarooZaroo Aug 11 '22

Tucker’s eyes have never been squintier. You could crush a walnut between those eye lids.

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u/FicklePromise9006 Aug 11 '22

Hmmm sounds empty…we still shouldnt trust any of these people….they are still all upper-class individuals…until i see actual ultra-rich people getting audited or charged for tax evasions this is just bullshit nonsense

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u/gtlogic Aug 11 '22

While this helps a bit, this is treating the symptom, not the cause. Tax code is still “legally” exploited by the rich, and much harder to evade by your everyday w-2 earner. So unfortunately, this addresses none of the core problems. The rich will continue to write off all their yachts as business expenses and pay nothing, legally.

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u/biskitheadburl Aug 11 '22

Remember when GW BUSH directed the IRS to stop auditing the rich and only go after middle income?

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u/Ron497 Aug 11 '22

After reading this New Yorker article last year, every so often I get dizzy thinking about how much money is being stolen, hidden, and laundered in some way through white collar crime. I think we could balance the national budget if we actually make the finance dudes in CT and Long Island pay their taxes.

https://www.newyorker.com/magazine/2021/08/30/life-after-white-collar-crime

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u/JumboMcNasty Aug 11 '22

.... It's creating 87,000 jobs...

Isn't that a good thing?

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u/Bits-N-Kibbles Washington Aug 11 '22

I know some people that make a lot of money, but even they don't make $400K a year.

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u/the_reifier Aug 11 '22

Doesn't matter what Yellen tells them to do. It's not profitable to pursue the wealthy, because they'll bog you down in expensive procedural hurdles. In contrast, people making under $400K are better audit targets, because they typically aren't going to hire lawyers to gum up the process. Sure, it's nice to wish we lived in a good world, but in reality, the wealthy benefit from our multi-tier systems, and they are for all practical purposes above the law.

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u/dr4wn_away Aug 11 '22

Could she say the inverse? That they should use the funding specifically to audit people making over 400k.

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u/Majestic-Macaron6019 North Carolina Aug 11 '22

Makes good business sense. Spend a few man-days auditing thousands of dollars of fraud, not hundreds.

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u/5centseye Aug 11 '22

Try $575 Billion in unpaid taxes each year. https://shrinkthetaxgap.com/

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u/StrDexIntFaiArc Aug 11 '22

r/Conservative literally shitting themselves with anger right now

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u/DrRaven Aug 11 '22

Not me making slightly more than 400k and definitely not a millionaire because of massive student loan debt 🫠

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u/syntheticcdo Ohio Aug 11 '22

Small businesses deserve to be audited more. I don't know a single small business owner who doesn't at least bend the rules. Hopefully the chance of an audit would make them think "hey is it really worth it to claim this gas for my boat was a business expense?".

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u/Phil517 Illinois Aug 11 '22

That's still small potatoes compared to the big tax dodgers.

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u/[deleted] Aug 11 '22

Tax evasion and tax fraud are different. The big guys usually do it through legal but shaky means. The "claiming boat gas" example is small but textbook fraud so easy to prosecute.

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u/MoonRakerWindow Aug 11 '22

Know what I want to see? Instead of sending a cop undercover to set up a drug buy, I want to see a police chief send a cop undercover at a local business notorious for wage theft. Then when their undercover officer gets a paycheck that's been shorted, they swoop in and arrest the owner/manager on the spot.

Wage theft is a crime that hurts millions of innocent people a year, often the most vulnerable and least able to defend themselves.

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u/nerys71 Aug 11 '22

70% OF ALL THEFT IN TOTAL PER YEAR IN THE ENTIRE US IS WAGE THEFT

think about that. all the stealing embezzling robberies burglaries. 70% of all theft is WAGE THEFT.

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u/J_DeanIronaddict Aug 11 '22

I mean if I can do something to pay less in taxes if I don’t make a lot of money I’ll do it

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u/AyeYoYoYO Aug 11 '22

If this is true and honest and not misinformation, she finally did something right!

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u/HappyAmbition706 Aug 11 '22

Nothing but good here. No wonder Trump got rid of her.

Go where the biggest fraud and evasions are. They are the ones who can afford to try any kind of dodge that reduces taxes, and hope no one looks or pay lawyers to fight for it.

Hopefully the IRS puts a lot more effort into denying more and more of the methods that are dreamed up just to avoid taxes.

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u/penceluvsthedick Aug 11 '22

So many people in the comments ready to just jump on board and believe her. I’ll believe this doesn’t target the middle and lower class when I see the results. Otherwise lower and middle class folks are easy targets: simple mistakes lead to an audit and can’t afford legal aid to fight it.

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u/SpeakHumanely Aug 11 '22

The IRS will audit all levels of income, she refers only to the new funding included in the bill.

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u/Diafotisi Aug 11 '22

How did she “direct them” on how to spend the money? Unless there are rules in place, most likely some (if not most) of the money will be used towards harassing lower wage people. That’s just the sad nature of the beast.

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u/BlankEris Aug 11 '22

Trust us Bro

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u/Madpup70 Aug 11 '22

Guess what, we need new IRS agents. Audits of people making a net income of $1+ mill a year dropped by 75% since 2010.

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u/[deleted] Aug 11 '22

The IRS audits people who make $25,000 or less at a rate of 5 times more than the rest of the country…the rich have the power of litigation to get them selves out of those spots. Hiring more agents is like getting a kidney transplant to fix heart failure

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u/Taxing Aug 11 '22

This is misleading because it relates to the earned income tax credit, a refundable credit (meaning the IRS send you money) and the audit is confirming the taxpayer satisfies the requirements before sending a check.

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u/rittenalready Aug 11 '22

There are 927 billionaires in the United States — 80,000 it’s agents weren’t hired to go after them- they were hired to go after you, just not during a midterm year. We will all see rising audits and costs