Some recent links of note:
The IRS has announced that not only will it issue stimulus payments and Paycheck Protection Program loans to people and businesses even if those people or businesses are behind on their taxes, but also that the agency will not levy bank accounts into which those payments are deposited — for 24 weeks in the case of PPP loans, or 8 weeks in the case of stimulus payments.
Current IRS policy says that agents should contact taxpayers before issuing a levy to ask whether the account in question recently received such a payment. If so, they are supposed to refrain from levying until the proper number of weeks have passed.
If the IRS tries to levy a bank account in which you have recently deposited such a check, you can protest this and the IRS is supposed to release the levy.
In either case, this should give you plenty of time to empty out the account so that a future levy attempt will fail.
- Tax blogger Peter J. Reilly concludes that IRS Collections Appears To Be Broken. Excerpt:
I fear that waiting out the ten year statute of limitations on collections is becoming a reasonable strategy and that many “taxpayers” have caught on and that the IRS, when it comes to collection, is to a significant degree bluffing.
My overall takeaway from the [recent Treasury Inspector General for Tax Administration] report is that the IRS has a lot of outstanding receivables that it does nothing about. That made me want to look more closely at the numbers.
Working with the spreadsheets is a little frustrating. They don’t answer all the questions I would like answered, but it does give a pretty clear idea that the IRS is something of a shadow of its former self.
At , the balance of assessed tax, penalties and interest (ATPI) was $114.2 billion spread among 10.4 million accounts. In that year IRS filed 1,096,376 notices of federal tax lien and requested 3,606,818 levies on third party. IRS wrote off $14.6 billion that had expired due to the ten year statute.
At ATPI was $125.8 billion spread among 11.2 million accounts. There were 543,604 liens and 782,735 levies. $34.2 billion expired due to the ten year statute.
It is important to remember that when we are talking about collections, we are talking about tax that has already been assessed. This has nothing to do with people who have not filed or who underreported income and have not gotten caught. That is an entirely different kettle of fish.
Through my decades of tax practice, the notion of flat out not paying assessed tax was not something that was in my bag of tricks. It has slowly dawned on me that this is a thing.
- There’s a new NWTRCC newsletter out, with content including:
- A look ahead to the 2021 tax season including the launch of a new focus on tax resistance as a way to protest against police militarization.
- And a look at U.S. military policy as a new administration takes over in Washington
- Some notes on how IRS policy is changing.
- A letter to the IRS from former State Department employee Fred Burks about how he’s decided to stop paying a portion of his federal income taxes to protest immorality, illegality, and corruption in U.S. military policy.
- Poland’s government has put a new tax on media advertising in non-governmental media. It claims the tax is simply a revenue measure designed to shore up the public health system. The news media claim that this is an attempt to use the taxation power to bankrupt and destroy the free press. In protest, media outlets including television, radio, and newspapers across the country suspended news coverage for 24 hours, displaying protest messages on a stark black background instead.
- A tax strike by restaurants and bars in Italy has begun. The strike is being organized by Movimento Imprese Ospitalità, which is a project of the tourist industry branch of the General Confederation of Italian Industry. It is protesting continued tax collection at a time of collapsing business during the Covid pandemic.
- I’ve seen a few more articles that give some additional details about the latest tax strike in South Kivu:
- Guillermo Incer Medina, in Confidencial, evaluates the tactics used by the protesters in Nicaragua who have been struggling with the Ortega regime.
He concludes that the best high-impact, low-risk action would be tax resistance from a small number of large-scale taxpayers.
In Nicaragua, 94% of the total tax collection comes from large taxpayers (a large taxpayer is a company that has large volumes of transactions and, therefore, that collects taxes such as VAT, IR — and others– in large amounts. Examples of these could be supermarket chains, large importers, large commercial establishments, or large agro-industrial consortia).
In our country, the sectors with the largest taxpayers are industry, commerce, finance, transportation, and services. In these sectors, large taxpayers collect more than 90% of the total taxes of their respective sector (which is to say that of every 100 córdobas that is collected from taxes in each sector, 90 córdobas are contributed by large taxpayers and only 10 córdobas by mid-sized and small ones). Furthermore, in areas such as liquors, beers, soft drinks, and fuel, the large taxpayers collect 100% of the total taxes.
Why is this important? Because the dictatorship needs taxes to maintain its repressive apparatus and its patronage politics. If you take the oxygen out of their horror machine and purchase of consciences, you take away their room for maneuver.
“Let’s do a consumer strike!” said COSEP and AMCHAM representatives every time we demanded a national strike. This is a mistake for two reasons: 1) for a consumer strike to have a real and not symbolic effect, requires that millions of unorganized Nicaraguans, including pro-government people, decide to deprive themselves of consuming goods that are difficult for them to obtain due to the precarious living conditions in which we live, 2) it is useless for us to stop consuming (not paying VAT) if companies still pay the State taxes such as IR and others (one must keep in mind that those who directly “deliver” taxes to the State are not we the consumers, but they are the collectors — the companies).
What can one do then? The action that could have the greatest impact at the lowest cost and in the shortest term is tax resistance from the large taxpayers, which is nothing more than the large companies stopping payment of taxes to the dictatorship for a period long enough to oblige them to make concessions for his departure.
“They are going to close us down!”, the big businesses say immediately. But it is not likely that the government will close large companies due to how this would look to foreign investment, and due to the political cost of sending thousands of people into the streets. Furthermore, if they close large companies, this would in practice have the same effect as tax resistance, since they would stop receiving their taxes. “We are exposing thousands to unemployment!”, they also say… more jobs are being jeopardized by letting this political and humanitarian crisis drag on and by the coming interruption of CAFTA and ADA, if the dictatorship continues to do what it wants and stays five more years. “It’s too risky!” It is more risky to put your body on the line in a march or a roadblock, or to go on a hunger strike in a church and get shot, cut off your services, and imprison those who want to help you. There is no large, medium, or small company that is worth more than a human life.
Tax resistance is more feasible than other actions of high-risk and low-impact (such as a chain of express pickets or coordinated sit-ins) because it does not require the coordination of thousands of unorganized people. To promote tax resistance, it is enough that a few of the largest companies, which are already organized in chambers, agree, stand firm, and coordinate among themselves.
- Gig workers in Serbia used to be more or less income-tax free, apparently. Not any more. A new law not only makes them liable for income tax, but requires them to cough up taxes for the last five years. Marchers in Belgrade protested the new tax law.
- Here’s another example of a a false-alarm “suspicious package” gumming up the works at an IRS processing center.