How you can resist funding the government → about the IRS and U.S. tax law/policy → IRS incompetence → enforcement effort/results

IRS Commissioner Mark W. Everson yesterday gave us some idea of how audit targeting has changed in recent years (at washingtonpost.com, which requires free registration to view articles):

IRS figures show that 0.65 percent of all individual taxpayers — roughly one in 150 — were audited in fiscal 2003, up from 0.57 percent the year before. The audit rate among taxpayers with incomes of $100,000 or more rose to 1.06 percent from 0.86 percent. In fiscal 1996, by contrast, the overall audit rate for individuals was 1.67 percent, and that for high-income taxpayers was 3.21 percent.…

The agency also pointed to a more than 9 percent jump — to $35.5 billion — in money collected from taxpayers as a result of enforcement efforts. The amount had been nearly flat at about $32 billion for the two previous years.

At the same time, Everson said, IRS surveys indicate that the number of Americans who “believe it is okay to cheat on their taxes,” had risen to 17 percent last year, from 11 percent in 1999.…

Much of the recent rise in audits was among what the IRS calls correspondence audits, in which the agency writes a letter to a taxpayer asking him or her to justify something on the return, such as the amount of mortgage interest deducted. “Field” audits, in which the taxpayer meets face to face with an IRS employee, climbed slightly to 206,457 in 2003 from 205,134 the year before. In 1996, there were 761,850 field audits, according to agency figures.…

The IRS figures also noted a continuing upturn in the number of levies, liens and seizures — key collection tools whose use fell drastically in the wake of Senate Finance Committee hearings in 1997 and 1998 that were highly critical of the agency and resulted in enactment of the 1998 reform law.

As with audits, though, all three remained far below levels of the mid-1990s. Seizures of taxpayer property declined the most: 399 last year compared with 10,449 in 1996.

An Associated Press article adds:

Audits of the nation’s largest corporations, nevertheless, fell for the 8^th consecutive year. About 12 percent of corporations with assets exceeding $10 million were audited, compared with more than 14 percent the year before. Audits for small and midsize businesses also dropped slightly.

IRS Commissioner Mark W. Everson was interviewed by USA Today, and the interview is in today’s paper. Observe in this excerpt how Everson decries the degradation of ethics and fairness and the culture of greed and materialism that contributed to more people being unwilling to help the IRS take their money from them:

Q: You’ve noted that a 1999 survey showed that 11% of the public thought it was OK to cheat on taxes, and now that is up to 17%. What is the driving force behind this attitude?

A: It’s probably two things. One is a degradation of ethics with some practitioners. It was tied to this same spirit of what many called “the culture of greed and materialism” that developed during the 1990s. But the IRS backed away from enforcing the law as this was happening. It’s a basic sense of fairness. Somebody out there is complying with the law, and they see others doing things, and over time, they feel like chumps. But we will change those attitudes.

The October issue of NWTRCC’s newsletter, More Than a Paycheck, is out. It includes:

• The reports from the 12^th International Conference on War Tax Resistance and Peace Tax Campaigns from Ruth Benn and Ed Hedemann that I linked to last month.
• Clare Hanrahan’s review of We Won’t Pay: A Tax Resistance Reader:

  “both daunting and encouraging and well worth the considerable reading time… captures in one indexed volume many individual acts and campaigns of conscientious objection to war and of revenue refusal to tyrannical governments… sincere voices and challenging arguments.”

• Elizabeth Boardman’s review of American Quaker War Tax Resistance:

  “167 intelligent and intense writings on the challenging question of whether people of conscience should pay for war… People struggling with this moral issue today will be guided by the writings in this book and may find some wonderful language to use in their own statements of conscience… a straightforward and compelling book.”

• Some notes on frivolous filing warnings, new tax laws, and IRS enforcement techniques.
• Notes about tax resisters Bob Williams, Mike Palecek, and David Schenck, about the trial of two Los Alamos National Laboratory protesters, and about the upcoming New England Regional Gathering of War Tax Resisters and Supporters.
• A story about long-time resister Thomas Wilson. The state of Massachusetts suspended his dental license 21 years ago when he stopped cooperating with state tax laws because the state, in turn, was acting as a collection agency for the IRS. Wilson kept practicing dentistry without a license, and was able to keep doing so until this year when he was forced to shut down after a competing dentist ratted him out to the state board of registration.

  At 75 Tom is philosophical about closing the door on his professional life and has no regrets about his choices. “In this present economy we’re getting a payback for what the government has been doing and what I haven’t been paying for and resisting all this time. People ask if war tax resistance changes anything. I can’t say that, but it’s helped me put up with what we have to put up with in this country.”

Tax Day reports and media mentions of war tax resistance are coming in from across the country:

• Members of the War Resisters League carried a War Tax Boycott banner through midtown Manhattan.
• Peace activists in Portsmouth, New Hampshire, held a penny poll outside the Federal Building.
• Tax resister Jon Klein is profiled in Richmond, Virginia’s Style Weekly.
• Ruth Benn of NWTRCC was interviewed on Rob Lorei’s Radioactivity show. (Benn’s interview starts at 9:27)
  
• Paul Guggenheimer’s Dakota Midday radio show talked to a Tea Party promoter and to Lincoln Rice of NWTRCC about their Tax Day plans.
• Jesse Watson and Lew McGregor greeted last-minute filers in Rockland, Maine to let people know that there are alternatives to paying for war.
• Don Timmerman tells readers of the Superior [Wisconsin] Telegram why he and his wife resist their taxes.
• NWTRCC is publishing reports on local Tax Day actions as they come in.

And in other news:

• David Boaz of Cato @ Liberty calls for a campaign to unite the anti-tax and anti-war movements under a single “Stop the War, Stop the Spending” banner.
• Al Giordano looks at the “Tea Party” protests and compares them to Wally Nelson’s war tax resistance protests he used to cover as a reporter every April 15^th.
• Kathy Belge at Kathy’s Lesbian Life Blog writes about tax resistance for gay and lesbian couples.
• Brad Spangler of the Center for a Stateless Society gives the anarchist perspective on Tax Day with his audio op-ed “Taxation is Theft”.
• Christopher Beam, Slate’s “Explainer,” explains what happens if you don’t file your taxes:

  Probably nothing. If you’re self-employed without any major assets or loans, the odds of getting busted are extremely low. In fact, an estimated 7 million Americans fail to file their taxes every year, and in 2008 the IRS examined only 158,000 such cases. That comes out to a roughly 2 percent chance of getting caught. Even if the IRS does audit you, the agency probably won’t press charges. Instead, they’ll just file a tax return for you and charge you a fee for the trouble.

• When Treasury Secretary Timothy Geithner took the reins at the IRS despite having neglected to pay $34,000 in his own taxes, a lot of people were miffed at the hypocrisy. But none had more cause than IRS employees themselves, who are saddled with strict, zero-tolerance policies against tax evasion that can cost them their jobs. And:

  IRS employees have reported that taxpayers are occasionally citing the Geithner case when they are asked to pay their tax bills. “It’s making the compliance conversation harder,” [Colleen] Kelley [of the National Treasury Employees Union] said.

• “An ABC News investigation has uncovered case after case of checks being stolen, manipulated and cashed by [IRS] contract employees responsible for processing them, resulting in delayed payments and heavily disrupted lives.”
• A Charles Adams speech about “Tax Resistance, Then and Now” was featured on The Lew Rockwell Show.
• Thomas L. Knapp reads the tea leaves and finds some hopeful signs over at the Center for a Stateless Society.
• Christofer, from Chicago’s Kairos community, reflects on his tax resistance and what it means.
• Conservative columnist Ross Douthat shares his impressions of the Tea Party phenomenon and compares it to the anti-war protests in the Dubya years. He concludes: “here we are in the sixth year of the Iraq War, and all those anti-war protests, their excesses and stupidities notwithstanding, look a lot more prescient in hindsight than they did (to me, at least) when they were going on. So if you’re inclined to sneer and giggle at the Tea Parties, keep in mind that just because a group of protesters looks ragged, resentful, and naive, that doesn’t necessarily mean they’re wrong to be alarmed.”
• Finally, Joe the Plumber appears to be following the Paris Hilton model of celebrity descent. The latest station on his trainwreck has him urging people to call a 1‒900 number to “vote” to abolish the IRS and replace it with the “fair tax” (a national sales tax) thus endorsing two scams for the credulous at once.

In what has now become an expected routine, the IRS has responded to my failure to include a check with my last tax return by sending me one of their “Notice of intent to seize (‘levy’) your state tax refund [I should be so lucky] or other property.” With $59.32 in penalties and $16.60 in interest, the grand total for the 2013 tax year is a little north of $6,000.

This came along with some explanations of how they calculate penalties & interest, some pleas to pay up, and a couple of additional inserts: “Notice of Potential Third Party Contact” — which is as far as I can tell mostly designed to try to intimidate you into paying by suggesting that the IRS will send agents around to “your neighbor, bank, employer, or employees” to spread the word that you’re behind on your taxes — and “The IRS Collection Process (Publication 594).”

Luckily for me, “IRS audits and other key enforcement programs ‘will operate well below historical levels’ this fiscal year, the federal tax agency’s chief told Congress Wednesday.”

IRS estimates show “the government will lose almost $3 billion as a result.”

Some bits and pieces from here and there:

• In a couple of weeks, you can attend an on-line “google hangout” on the subject of “War Resistance: Beyond the Rally,” sponsored by the National War Tax Resistance Coordinating Committee, the Center on Conscience and War, and the National Campaign for a Peace Tax Fund.
• Boris Yakubchik, an activist in the “effective altruism” movement has published some of his recommendations on frugal living — things he puts into practice so that he’ll have more money to be able to give away to good causes.
• In the U.S., a person who pays alimony can take it as a tax deduction; a person who receives alimony must declare it as income; and to take the deduction, the payer must include the taxpayer identification number of the recipient on their tax return. You’d think this would make it easy for the IRS to make sure that the numbers match up, and that people aren’t taking phony deductions for fictitious alimony, or failing to report alimony received as income. But according to a new TIGTA report, fully 47% of the alimony deductions do not have corresponding alimony income shown on the recipients return — amounting to “more than $2.3 billion in deductions claimed without corresponding income reported”. Peter J. Reilly dug a little deeper and found that the IRS only bothered to audit 4% of the pairs of returns showing discrepancies — that is to say, “you and your ex collectively have a 96% chance of getting away with something that is in your face blatantly wrong even though you are, in effect, ratting yourselves out.” He calls this “a scandal of epic proportions” and suggests that it’s going to encourage divorcing couples and tax advisors to game the system.
• How can the current U.S. tax system cope with bitcoins and other aspects of the emerging virtual economy? That’s the subject of a new paper: A Whole New World: Income Tax Considerations of the Bitcoin Economy. Excerpt:

  Because these bitcoins can, in some circumstances, be used to purchase goods or services with a monetary value or where they can be converted to legal tender, the proper income tax treatment of bitcoin transactions presents both compliance and substantive questions for the IRS. …This article explores the current state of the law as it relates to bitcoins as well as proposed methods for applying existing federal income tax laws to the virtual economy.

• Hey, look: another IRS building temporarily evacuated when a worker opens a package containing a suspicious substance.

And now, a bit of domestic tax resistance news:

• Long-time war tax resister Karen Marysdaughter explores the links between war tax resistance and environmental activism.
• While the IRS has been complaining that budget cuts and corresponding cuts to collection personnel will cause revenue from collections to fall, the latest stats aren’t showing much of a correlation.
• There’s a new semiannual Treasury Inspector General for Tax Administration report out. It’s a real page-turner, but if you don’t have the time, here are a couple of highlights:
  • The report counts 3,300 people who have been fooled by phony IRS agents who call them up to threaten them about a tax debt and get them to send money to the scammers. The scam has netted something like $16.8 million. These figures may be understating the problem, as some people who got fooled probably haven’t spoken up about it.
  • The IRS rehired 141 former employees who had had “prior substantiated conduct or performance issues” “including [such issues as] willfully failed to file their tax returns… unauthorized access to taxpayer information, leave abuse, falsification of official forms, unacceptable performance, misuse of IRS property, and off-duty misconduct.” And nearly 20 percent of these also had such issues filed against them after having been rehired. Most curious to me is that when the IRS had this pointed out to them, their response was to say that they see no reason to change their hiring practices.
• Erica Weiland reflects on the NWTRCC presence at the recent Social Forum in San Jose, California.
• I still think the whole IRS scandal involving the screening of Tea Party groups that were trying to game the nonprofit system to engage in electioneering was largely bullshit. But whether from arrogance or incompetence or from more conniving motives, the agency is sure acting like it’s covering up something. Bullshit or not, the agency is doing as much as its enemies to keep the scandal alive.
• Oh yeah, and the IRS penned $19 million in contracts with contractors who haven’t paid their taxes. That’s against the law… not the not-paying-taxes part, which you already knew, but the doing business with tax-scofflaw companies part. Not that anyone at the agency will get in trouble for it.

While I’ve been studying my Aristotle, links have been piling up in my bookmarks. Here are some of them:

• A new documentary film called The Pacifist is doing the festival circuit. It concerns war tax resister Larry Bassett, his large act of income tax resistance and redirection, and his attempts to provoke the U.S. government to respond to his stand. It features interviews of Bassett, interspersed with historical footage from government propaganda films encouraging people to pay their taxes to keep the war machine going, and with a collage of contemporary news footage about American militarism. It does a good job of helping you get to know Bassett better and to learn about the history of his pacifism and his war tax resistance stand.
• Speaking of documentaries, I thought this article on five lessons I learned while making a documentary film about FIRE (the “financial independence, retire early” community) was very interesting.
• Finland evidently publishes the taxable income of every citizen as a public record that any busybody can browse through. Do you suppose more or fewer people would resist their taxes if such a practice were typical? Ruth Benn considers issues of taxation, privacy, and openness about our finances at NWTRCC’s blog.
• Senator Rand Paul has published his Annual Festivus Report of federal government waste. Just the thing to infuriate some people about how their hard-earned taxes are spent. If that doesn’t do the trick, check out this map showing the 40% of the world’s nations in which the U.S. military is engaged in “counterterrorism” operations.
• Conscientious objector Halil Karapasiaoglou of Turkish Cyprus was convicted of evading the military draft. He vowed to go to jail rather than pay the fine.
• Some encouraging numbers here:

  Because of the repeated [budget] cuts, the IRS has drastically stopped pursuing “nonfilers” who do not submit their tax returns. The number of investigations into nonfilers fell from 2.4 million in 2011 to 362,000 in 2017. The agency has also drastically reduced its investigations of filers who do not pay their tax debts. In 2010, the IRS let $482 million in old tax debt lapse, but by 2017, that number increased to $8.3 billion.

  It’s something of a golden age of tax evasion.
• Hey look: Another “suspicious package” evacuates an IRS building.
• The federal government “shutdown” is also taking its toll on the IRS. At a time of year when the agency is usually bulking up its temporary workforce and preparing for income tax filing season, instead it’s sending most of its workforce home, and making the rest work without pay. Protests by employees are planned, and there’s also a lawsuit in the works that claims forcing the agency workers to work without pay violates labor laws.

• “From the executive leadership of top weapons-makers, to the senior government officials designing and purchasing the nation’s military arsenal, the United States’ national defense hierarchy is, for the first time, largely run by women.”

  And: “CIA Director Gina Haspel has appointed another woman to the top level of the agency, naming Cynthia ‘Didi’ Rapp as deputy director for analysis, essentially the top analyst in the CIA. The appointment means that the top three directorates of the agency, for operations, analysis, and science and technology are now all headed by women.”

  Boy am I looking forward to all of the peace and justice I was promised would happen once that bad ol’ patriarchy got smashed.

• A family in Alberta has refused to pay the carbon tax portion of their heating bill in protest against broken promises from the government.
• The epidemic of speed camera destruction continues worldwide:
  • One got torched in Glazebury, England
  • Another was converted into a trash bin in Senigallia, Italy and several others were toppled or sawed down elsewhere in that country, some as quickly as they were installed
  • Frederick Gramcko took a baseball bat to one in Encinitas, U.S.A.
  • In the Netherlands, the elves use gaily-wrapped gift boxes to obscure the cameras.
  • And in Germany radar outposts were transformed into huge candy canes.
  • While South Africa uses the good old-fashioned firebomb to stop those ticket machines.
  This is especially widespread now in France, thanks to the gilets jaunes protests:
  • Yellow vests are the latest fashion trend for French speed cameras
  • There are no longer any functioning radars on the roads of Vaucluse after the last of them were burned
  • All of the radars on the Toulouse ring road have been disabled
  • 60% of the radars in Grand Reims were taken out
  • 50 radars vandalized in le Cher
  • 23 of the 33 radars in the Tarn are out of service
  • 21 out of 22 in Puy-de-Dôme no longer ticket drivers
  • All five of the radars in Pays-Haut are now monuments to direct action
  • “Almost all” of the radars in the Loire are out of service. The article seems to indicate that the government has stopped trying to repair them since they get vandalized again so soon.
  • A radar on the RD 9 became the tenth burned in Haute-Loire in recent months
  • Two more Alsatian radars, five in Vaucluse, one in Yzeux, another in Ploudaniel, four in the Rethélois, three in Pluneret, Ploeren, and Theix-Noyalo, and three more in Lapalisse were put to the torch in December
  • Three radars were taken out in Cambrésis, one in Cayenne, and five in Martinique
  • Radar cameras were painted over in Sochaux, Belfort, Cateau-Cambresis, and Surmoulin
  • Three radars burned in Lot-et-Garonne, making 46 of 49 disabled there; one burned in Saint-Herblain to join the ⅔s rendered inoperable in Loire-Atlantique; and two more burned in Mesnil-le-Roi and Mureaux, another two in Couvrot, four in Puy-en-Velay, two in Haute-Garonne, one on Bordes, one in Hérault, another in Matelles, one in Loudes, and three in Gers
  • A radar at Truttemer-le-Grand, one on the Mazures coast and another in town, one at Pinas, one in Ouilly-le-Vicomte, one in Fourdrain, two in Tarn, one in Landivisiau, one in Monbalen, two in la Vienne, and another in Chavagne were torched
  • A radar was sawed from its post then taken away and burned in Villerbon
  • One was wrapped up securely in Goult
  • Five radars burned in Ariège, and three of those were completely destroyed
  • Six days after it was first installed, a radar in Saint-Laurent-des-Arbres was destroyed
  • A nicely-wrapped gift box covered a camera in Domalain
  • A mobile radar station posted on the D-928 was taken out of service for the tenth time, and another was victimized at Thillot
  • “Not a week goes by without a machine taken out of service” reports Le Bien Public of the Côte-d’Or
• There’s a strange feature of Obamacare. If your income is low, the government subsidizes your health insurance premium. But if your income is higher than you thought it would be, you’re supposed to pay some of that subsidy back when you file your taxes. But there’s a limit to how much you have to pay back. Because of this, the government is paying out about a billion dollars in subsidies that people don’t qualify for and yet will never have to repay.
• Ministers in Samoa are defying the government’s attempt to tax them on the offerings they accept in church.

There’s a new National War Tax Resistance Coordinating Committee newsletter out, with content including:

• Lincoln Rice considers war tax redirection as a form of slavery reparations
• Ruth Benn examines the implications of inheritances for war tax resisters
• Tax law and policy changes:
  • lock-in letters that interfere with resisters’ who want to block paycheck withholding
  • the new W-4 forms that have come out to conform to the new tax law
  • standard deduction amounts for the 2019 tax year
  • the toll of ongoing IRS impersonation scams
  • the recent drastic collapse of IRS enforcement effort against non-filers and non-payers
• Some international news of resisters from Spain and Turkish Cyprus
• A profile of NWTRCC’s new outreach consultant, Chrissy Kirchhoefer

In other news:

• IRS employees got back to work after the “shutdown” and found that over 5,000,000 letters had piled up on their desks while they were away.
• TaxProf Blog gives a fascinating overview of the bureaucratic morass the IRS slogs through even on a good day, when it’s not shut down. There are multiple oversight bodies and committees all demanding that the agency do this or that, and obsolete laws demanding that it collect irrelevant data. It’s a wonder they can get anything done.

In other news…

• The Pacifist, a documentary about war tax resister Larry Bassett, has now been released and is viewable on Amazon’s streaming service.
• Peter J. Reilly looks at the latest report from the Treasury Inspector General for Tax Administration and concludes that complying with the tax law has become a sucker’s game. He notes for example the hundreds of thousands of cases where gig economy workers received 1099-K forms indicating they had earned income, but filed no corresponding schedule C forms reporting that income — and how few examples of this obvious discrepancy the IRS bothered to follow up on. He sees the same pattern in cases where one ex-spouse declares an alimony deduction but the other does not declare the alimony as income. And even in the case of crazy “show me the law” tax refusers, the IRS seems to lack the resources or the willpower to pursue them.
• At National Review, Daniel J. Pilla tries to dig past the initial hype about anti-abortion tax resister Michael Bowman’s recent court victories to discern what that really adds up to from a legal point of view and what implications this has for other conscientious objectors to tax-funded activities.
• The worldwide epidemic of speed camera destruction continues. TheNewspaper.com has tracked down several recent examples from France, Luxemborg, England, and Italy.

In other news:

• One of the tools the IRS uses against tax scofflaws like myself is to file a federal tax lien in the local court system of the scofflaw. This puts creditors and the local legal system on notice that the IRS intends to step in and assert its rights to seize money. This can make it difficult to get credit, and also makes it easier for the feds to seize anything awarded by the courts in lawsuits, probate resolution, etc. However (and this is where it gets interesting and newsworthy), filing a lien costs money. And the IRS thinks several California counties are charging them too much, and so they have started to refuse to pay. In response, some counties are refusing to process the IRS liens. Alas, this filing fee, and the standoff between the bureaucracies, also applies to paperwork to release a previously-filed lien. So this doesn’t always work in the scofflaw’s favor. Here’s some news coverage:
  • Marin Independent Journal
  • The Press Democrat
  • SFGate
• War tax resister Larry Bassett was interviewed on the Parallax Views podcast. Bassett is the subject of the recent documentary film The Pacifist and is responsible for the largest known individual act of war tax resistance, in terms of the amount of dollars resisted at once.
• Another Treasury Inspector General for Tax Administration report points out that reduced IRS resources means collapsing tax enforcement capability. “As more taxpayers experience little to no consequences for non-filing, the long-term impacts may include potential erosion of the voluntary compliance rate.”
• Via a review by Ariel Jurow Kleiman of Marjorie E. Kornhauser’s American Voices in a Changing Democracy: Women, Lobbying, and Tax 1924–1936, I learned of a 1935 “Meat Strike” meant to protest New Deal-era taxes on meat processing by boycotting meat purchases. The offensive tax was eventually thrown out as unconstitutional.
• The IRS issued an update to its estimate of the “tax gap” (the difference between how much tax people are supposed to pay and how much they do pay). The upshot is that they think little has changed: people pay about 84% of what the agency believes they owe. However, the last time I looked at the details of one of these “tax gap” reports, I noticed a lot of hand-waving, guesswork, and extrapolation, and only a little empirical data collection, so I would recommend taking these numbers with a grain of salt.
• More attacks on traffic ticket issuing radar cameras — in France & Italy; Mexico, Germany, and France; and France again. Revenue from the cameras is only half of what the government had hoped for and budgeted for in France this year, and the government has had to divert some of that money to installing more heavily-fortified cameras.
• The simple home of war tax resistance legends Juanita & Wally Nelson in Deerfield, Massachusetts has been restored as a “living memorial” to the inspirational couple.
• The 15^th International Conference on War Tax Resistance and Peace Tax Campaigns will be held November 28 through December 1 in Edinburgh. The last such conference was held in 2013 in Bogotá, Colombia.