How you can resist funding the government →
about the IRS and U.S. tax law/policy →
how is tax law/policy/administration changing? →
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CoViD-19 pandemic-related legislation, 2020–21
The fan and the shit are failing to practice social distancing as March comes to a close.
If you want the latest on epidemiology, hygiene tips, or obnoxious things people have tweeted recently, you won’t find it here.
But I will try to sift through the news a bit and find things that might be of some interest to those of us in the tax resistance fringe.
If among your fondest dreams is something to do with delivering the federal government’s budget a crippling body blow, you may have reason to smile right now.
Tax revenue has got to be dropping fast: personal income is surely way down as unemployment claims are at unprecedented levels; probably also many self-employed people who don’t normally qualify for unemployment are out-of-work as well.
Businesses are closing their doors and foregoing revenue.
Industries like travel, professional sports, casino gambling, are taking across-the-board hits.
So business income is in the shitter too.
Capital gains? Remember those?
Tariffs, Trump’s favorite go-to tax, also down as international borders close, shipping runs into quarantines, and customers dry up.
Boy would this be a good time for the government to dip into its rainy-day fund that it’s built up by running budget surpluses during the fat years.
Heh nope.
The budget deficit has ballooned during the Trump administration.
But that hasn’t stopped the politicians.
In desperation they enacted a bipartisan $2 trillion economy-goosing bill — a mix of loans and cash giveaways (and suspiciously-targeted tax breaks and the usual pork).
For comparison, the entire federal government budget is a bit over $4 trillion; the national debt is was about $23 trillion.
This new stimulus bill was on top of another bill enacted a little over a week ago that cut the payroll tax for and provided new tax credits for many companies, and also made more people eligible for federal unemployment insurance payments.
This paragraph is based on preliminary news reports about the just-enacted law, and so may be wrong in some or many particulars:
The new stimulus law includes a provision for sending $1,200 checks to just about everyone in America (plus $500 for dependent children).
Early reports say that the checks will only go to citizens and legal residents with incomes under a certain threshold, which is based on the income on their 2019 tax returns, and that they’ll phase out as they approach that threshold.
The checks will be treated as advance payments on a tax credit that will apply on the 2020 tax year’s filing, and so if your income is lower this year than in 2019, you’ll make any adjustment then if you actually qualify for more money than you ended up getting this year.
I hear tell that they’ll be issuing checks even to people with an existing tax debt, so even a scofflaw like me might get a payout.
That’d be hilarious.
However, what about people who don’t file tax returns — either tax resisters who choose that method of resistance, or people with very low incomes who aren’t legally required to file?
I haven’t heard how they plan to handle this.
Meanwhile, the IRS is sending almost all of its employees home, at a time of year when the agency would normally be having all-hands-on-deck to deal with tax filing season.
The tax filing (and paying) deadline was pushed out a few months, to , which takes some of the pressure off, but still this is a pretty big deal.
I’m going to go out on a limb and guess that an agency whose databases are still running fifty-year-old CoBOL probably doesn’t have state-of-the-art remote working capabilities, either.
In any case, according to the union contract, in order for an IRS employee to work remotely they must have high-speed internet and “an alternative space that’s conducive to working.”
Without those things, the IRS can’t force them to work, and has to put them on “weather and safety leave” instead.
The agency has already suspended deadlines for tax payments, installment payments, and offers in compromise payments.
They’ve also put a halt to any new liens and levies initiated either by field collection officers or by their automated systems.
They’ll also stop referring tax delinquents to private tax collection agencies, or reporting them to the State Department to have their passports denied.
In short, their collections & enforcement division is taking a breather until mid-July at the earliest (and a lot of us can breathe easier too).
April 15th — the usual federal income tax return filing deadline in the U.S. — was in the more whimper than bang category this year.
The powers that be decided to extend the filing deadline to , and for that and other reasons, taxes are less on people’s minds than usual this time of year.
But here are some items that have recently come to my attention:
The U.S. government is sending out “stimulus” payments willy-nilly.
Thousands of dollars in forgivable “loans” are being made available to businesses (though it’s something of a crapshoot which businesses will and won’t get them), and most Americans are also getting some free money as well.
The individual stimulus checks are already starting to go out.
Americans who got tax refunds direct-deposited in their bank accounts last time they filed their taxes were the first to see money.
The rest of us have to wait a bit.
There was some worry that people who are so poor that they don’t have to file tax returns would be overlooked, but the IRS has created a method for non-filers to apply for the stimulus money too.
Businesses in Mexico are threatening a tax strike to pressure the government into granting tax relief or other financial aid during the pandemic crisis, and some state governors there are also making noise about withholding taxes from the federation.
I currently owe the IRS something in the neighborhood of $73,350.
That’s $2,165 less than it was a few weeks ago because my oldest remaining tax debt fell off the statute of limitations ledge this month and became forever uncollectible.
Of what remains, about $51,000 is the original tax I owed, and the rest is penalties & interest.
In spite of that, I fully expect the IRS to send me a $1,200 “stimulus” payment (and a signed letter from our Dear Leader congratulating himself for giving it to me) before too long.
And today, I got a $8,100 “Paycheck Protection Program” loan.
Although it is technically a loan, it is designed in such a way that I am not expected to pay back the principal (I think I am on the hook for the 1% interest).
Even better, unlike most forgiven loans, this one will apparently not count as taxable income.
It’s just free money from The Man.
I’m a little astonished.
One bureau of the government sends me pleading letters demanding that I pay up, while others eagerly shove bundles of cash at me.
If you are a Schedule C / 1099 / sole proprietor / passthrough business whose livelihood is threatened by the whole pandemic thing, you should really look into this.
It seems to be a first-come/first-served sort of program, and the word is getting out in a sort of haphazard way, so tell your friends as well.
In the United States, prisoners are supposed to file income tax returns like anyone else.
And unless the law says otherwise, the same tax rules apply to them.
When Congress passed the last stimulus bill, giving taxpayers a tax credit and then pre-paying that credit to them by mailing out checks, prisoners were among those who benefited.
Because that was the law.
Israeli musician Hemi Rudner has gone on tax strike to protest the lack of government support for the self-employed during the pandemic shutdown.
I’m a normal citizen.
And aside from a joint here and there, I abide by the law, love my country, and of course, pay taxes.
Around half of my income has gone to the state for decades already.
Only God knows how many meetings I’ve funded.
Myself, and millions of other citizens in the State of Israel, are stuck in a horrible situation, where in addition to fears about our health, we don’t have any way to make a living and support our families.
In other Western countries independent workers get an economic safety net as an integral part of their rights.
In Israel, the tyrannical government toys with us as if we’re invisible, like there are no faces behind the masks.
I want to say that as long as we don’t receive our rights as citizens, without the terrible and discouraging bureaucracy, I’m declaring that I’m not paying taxes to the State of Israel.
I call on all Israelis to do the same.
Maybe then, at the end of the day, something will change here.
Gwen Jaspers issues a call to Defund the Pentagon, and says this we don’t have to wait for the politicians to act: “We may even decide, eventually with trusted supporters, not to pay for the Pentagon’s war budget by omitting the amount from our tax payment that the Pentagon receives — a whopping 50 percent or more of what we pay in federal income taxes.”
As the (delayed) approaches, J.D. Tuccille asks taxpayers to consider what they get for their money: public health incompetence, abusive security forces, and economic instability.
Some recent links of note:
As I reported back in July the IRS was refusing to issue stimulus payments to people in prison, and was trying to claw back the payments it had already issued — even though the law did not authorize the agency to do these things.
Now a court has granted an injunction against the IRS, ordering it to release the funds to the unjustly robbed prisoners.
The human revolt against traffic ticket robots continues, with robots taking casualties from rebels armed with spray paint, an angle grinder, and hot tar in Canada and France in recent weeks.
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.
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.
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:
The campaigns have been organized and led by what are vaguely referred to as “la société civile” (civil society).
This refers to some sort of preexisting groups, but I don’t really understand what they are.
They seem to be non-governmental organizations that sometimes behave as parallel governments or service providers, other times as sorts of citizens’ unions or chambers of commerce.
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.
Excerpt:
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.
