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

The IRS Oversight Board’s Annual Report to Congress covering 2011 is out.

There’s not too much to report of interest here. The report talks ominously if vaguely about “a breaking point” at which the moribund agency budget combined with Congress’s enthusiasm for loading up the tax code with greater complexity, leads to “serious problems” with “adverse national repercussions.” But there’s little payoff in terms of details.

One table gives a vivid picture of the boom in identity theft based tax fraud:

200920102011
number of fraudulent returns identified457,369971,5112,176,657
amount of fraudulent refunds identified$2,988,945,590$7,300,996,194$16,186,395,218
number stopped369,257881,3031,756,242
refunds stopped$2,517,094,116$6,931,931,314$14,353,795,007
refunds not stopped$471,851,474$369,064,880$1,832,600,211

The IRS receives hundreds of thousands of identity theft complaints each year, and has set up a special office to deal with them, giving this office a staff of 440 people — “a large drain on the IRS service staff” that nonetheless leaves the agency “still struggling to effectively manage identity theft cases.”


While most of what I hear about the IRS these days makes them out to be struggling to keep on top of an increasing workload with fewer employees and a shrinking budget, there’s one curious outlying data point: criminal prosecutions of tax cases referred by the IRS to the Justice Department are up 23.4% during the Obama administration.

This may not be as anomalous as it seems. Perhaps by chucking these cases over the fence into the criminal court system, this takes some of the workload off of the IRS. In other words, maybe these cases are ones the agency would prefer to handle with civil charges and it’s pursuing criminal charges only because otherwise it couldn’t handle the case load at all. Just speculation; I’m not sure if the budget even works that way.

Another possibility is that the surge in identity theft cases in recent years has led to more criminal activity that falls under the tax umbrella. (The report shows that charges of theft of public money and of identity fraud were the third and ninth most common criminal tax charges in  — up from 15th and 19th respectively the year before.)


Some bits and pieces from here and there:

  • According to a Government Accountability Office report, people filing phony tax refund claims by using appropriated identities stole $5.2 billion from the IRS during the . (An additional $24.2 billion in such refund claims were detected before the IRS sent any money.) To put that into perspective, $5 billion is roughly the amount of money that was in the entire IRS enforcement budget (before recent cuts, anyway). Which is to say that nowadays the government pays more to organized tax cheats than it pays to combat tax cheats. The identity theft industry is a significant (and growing) part of the federal budget.
  • When the Syriza coalition looked like it was on track for a shocking victory in the Greek elections, people across Greece stopped paying their taxes. After all, Syriza had campaigned in part on the abolition of some new taxes, and had hitched its wagon to the “won’t pay” tax resistance movement. Well, now that they’re in power, they’re more apt to be caught talking about tax-paying as a “patriotic duty,” but the Greeks don’t seem to agree: tax collection is down by 23% from expectations.
  • An Italian priest, Don Marino Ruggero, has been making waves by promoting tax resistance to his flock. In his parish bulletin he wrote: “Catholic doctrine notes that there are fair taxes that are to be paid under pain of mortal sin and of the penal law, unfair taxes that you may evade without sin and without offense, and even perverse taxes that are contrary to the divine law and that should not be paid even if you have to risk your life.” He says he feels that the tax burden has become so grotesque in Italy that the taxes are no longer fair enough to be obligatory to Christians: “I wonder if it is better to pay utility bills and taxes and then have to go begging for charity. When a family sinks into despair because they have nothing to eat, one has to decide. I call for a tax strike. Yes, a peaceful revolution, in which it would be enough that everyone fearlessly stop paying any tax, with a single purpose: to undermine an out-of-control ‘meat grinder’ tax system. Gandhi said: ‘Withholding payment of taxes is one of the quickest methods of overthrowing a government.’ He and his people, they got it.”
  • Thirty thousand people marched in Dublin to protest an impending Irish water tax. Some 660,000 Irish households had refused to register for the new tax by the registration deadline.
  • Colectivo Utopía Contagiosa has issued its impressive annual report on the amount and the impact of Spanish military spending which is used, in part, as a basis for the practice of many war tax resisters in Spain.

Some bits and pieces from here and there:


IRS follies are piling up fast:


Today, a pile of tax resistance links from hither and yon:

International Tax Resistance News

  • There seems to be something of a tax insurrection in Denmark including the torching of a tax office and ten tax administration vehicles.
  • Dave Ridley, on The Ridley Report podcast, ponders whether or not it is ethical to try to drain resources from the government in order to weaken it (for example, by filing lawsuits against it, or forcing its bureaucracy to waste time) or whether this is just adding insult to the original injury the government performed by taking the wasted funds from the taxpayer.
  • Protesters in Detroit, Michigan, blocked the street in front of the county treasury building to protest the fact that despite plunging property values in Detroit, many homes have not been reassessed in years (in spite of a law mandating annual reassessments), and so the owners are on the hook for artificially inflated property taxes, which is pushing some of them into tax foreclosures.
  • A brothel in Salzburg, Austria, has launched a free drinks and free sex promotion to protest high taxes on its receipts. You will probably not be surprised to learn that the protest has been wildly popular with the brothel’s clientele as well as with clickbait “news” sites.
  • Residents of Beni, in the Democratic Republic of Congo, have launched a tax strike to protest against the government’s failure to provide them with adequate security against atrocities committed by the Allied Democratic Forces rebels. The tax resistance comes on the heels of a week-long general strike, and is being organized by “civil society” groups. The taxes being resisted are largely business taxes, both those on larger businesses and stall-fees paid by market vendors. Some of the organizers have reported being subjected to death threats.
  • Palmerstown (Ireland) Residents against Water Charges held a mass burning of their water bills a little while back. Meanwhile, petitions signed by 15,000 anti-water charge protesters were given the cold shoulder in Cork.
  • Market vendors in Githurai, Kenya have started withholding taxes from the county government to protest the government’s unwillingness or inability to provide basic services to the market.
  • As Greece prepares to bid a national “δεν πληρώνω” (“won’t pay”) to their international creditors, the domestic δεν πληρώνω movement continues to innovate — lately with a new smartphone app that tells public transit users where they can expect ticket auditors and which stations are free-and-clear. Fines are down by ¼ to ⅓ from their numbers last year. In addition, overall tax revenue is in a tailspin in Greece. The government hoped to bring in €3.728 billion in May, for example, and only managed to scrape up €2.722 billion.

War Tax Resistance News

  • Pioneering American war tax resister Juanita Nelson, who helped found the first modern American group devoted to war tax resistance (Peacemakers) in , and who died , was honored with a festive parade in her hometown of Greenfield, Massachusetts.
  • War tax resister Don Schrader explains his stand in the New Mexico Daily Lobo: “How much good is it to pray, hope, and march for peace if we pay for war?”
  • The group Conscience, which had been an important voice for war tax resisters in the U.K., has been undertaking an image makeover lately, in which it has deemphasized tax resistance in favor of lobbying and, alas, lately is lobbying for a particularly pathetic “taxes for peace” bill that is a somewhat new formulation of the “peace tax”-style legislation but that has at least as many flaws as such bills usually have.

IRS Woes


Some links that have flashed by my browser in recent days:

IRS Follies

International Tax Resistance News

  • Anjali Damania and Alyque Padamsee have started a taxpayers union and have launched a tax strike to protest government corruption in India.

    Padamsee claimed that he always does everything legal and correct. He said, “I checked with lawyers. We are a group of like-minded people, and the tax paying population of this country, and they said, anyone who works together could form a union. And by law, a union is allowed to strike. We will strike by not paying tax. We plan to assemble a million people with a fee of Re 1 each, but all this is at the planning stage. We are talking with senior lawyers and will have them on board. Our main aim will be to make the government accountable. If there are any recommendations, people can contact me.”

    However, it is not yet specified which tax the Tax Payers’ Union will not pay, as there are various taxes in India, and most of them are indirect tax, which one pays in form of service, or while buying products. The other important taxes which concern an individual directly, include income tax and professional tax.

    This idea seems to be catching on. Justice Arun Chaudhari, from the Nagpur bench of Bombay High Court, in a ruling during a recent corruption case, said:

    In my considered opinion, corruption can be beaten if all work together. To eradicate the cancer of corruption — the “hydra-headed monster,” it is now a high time for the citizens to come together to tell their governments that they have had enough. That is the miasma of of corruption. If the same continues, taxpayers may resort to refuse to pay taxes by “non-cooperation movement.”

  • Tommaso Cerno, a journalist and gay rights activist in Friuli, Italy, has made waves by announcing, in a letter published in Repubblica, a tax strike for gay rights.
  • George Theofanou, who participated in the “won’t pay” protests against road tolls in Greece, has been charged €21,787.20 by the Greek tax agency for his failure to pay €427.20 in tolls. Theofanou issued a defiant letter, denouncing the “mafia” government and vowing to continue resisting.
  • Farmers are the latest group to organize to protest taxes in Greece, driving their tractors to Athens, blocking highways, and attacking government buildings.
  • Textile businesses in Vaishali were shuttered as the textile union launched a strike against a new tax.

War Tax Resistance

  • My Waging Nonviolence article, on how the War Tax Resisters Penalty Fund is a model for civil disobedience campaigns by demonstrating how to blunt the force of government deterrents, has been picked up by Truthout and OWSNe.ws.
  • The POWERevolution blog has a new post about war tax resistance. Excerpt:

    If the government does not allow us the freedom to direct our taxes toward more enriching and sustainable funds, we will begin the process of taking that freedom for ourselves. We will discontinue paying taxes to the government, and instead redirect our money into a community fund that distributes our income in a way that serves all of us. As long as we continue paying for the current system in the form of taxes, we are complicit in the violence and corruption committed by it. By withdrawing our funding of it, we withdraw our consent of its actions.

  • Bernard J. Berg recalls how he came out of the U.S. military doubtful that what he was doing deserved to be called “service”:

    I too served in the Navy, just before Vietnam, helping to keep the sea lanes safe for United Fruit Co. and the Dulles brothers. I later joined the war tax resistance effort sponsored by Lehigh-Pocono Committee of Concern. Money which should have gone to the IRS to pay for our war crimes went into the fund to be used for worthy causes. But the IRS had the last laugh as it garnered my bank account and got more money for illegal wars with the fines it extracted from me.

Miscellany

  • I just learned about the following presentation which was made at the 2013 Bitcoin Conference, and features Angela Keaton from AntiWar.com, Carla Gericke of the Free State Project, and Teresa Warmke of Fr33Aid, discussing how nonprofits can benefit from using BitCoin:
  • The number of U.S. citizens who are renouncing their citizenship is climbing, continuing a dramatic trend since 2008.

Some recent links from here and there related to tax resistance:

International

U.S. Tax News


More tax resistance news:



Today I’ll share some links about tax policy and tax resistance in the United States that have caught my attention recently.

First, though: I’ve started a Wikipedia page on Tax resistance in the United States that covers how theories about tax resistance have shaped (and been shaped in) the U.S., and how tax resistance in practice has played out in the country. Wikipedia is an open, collaborative project that anyone can help to edit, so I encourage you to learn what it’s all about and how to help make it better.

Now on to the links:

Tax Evasion

  • The New York Times got its hands on a trove of financial documents concerning the real estate empire of Fred C. Trump, Donald Trump’s father, and published a well-done exposé on what they found. From the point of view of today’s political squabbles and tomorrow’s history lessons, the takeaway is that Donald Trump’s brand, in which he is represented as a self-made business prodigy, is a laughable con job. From our vantage, however, what’s interesting is the extent to which the Trump family used legal, effectively-legal, and illegal methods to evade taxes. They paid a fraction of what they owed, again and again. This may help bolster the widespread feeling that rich people commonly get away with tax evasion, sticking it to the little guy. This in turn erodes “tax morale” which causes voluntary tax compliance to fall.
  • Another bit of journalism hammering on this theme (though more free-wheeling and not as methodically precise) comes from GQ: “How Puerto Rico Became the Newest Tax Haven for the Super Rich”. Apparently if you can convince the IRS that you’ve become a permanent resident of the U.S. Territory of Puerto Rico, you’ll find yourself in “the only place on U.S. soil where personal income from capital gains, interest, and dividends are untaxed.”

General Government Failure

IRS Follies

Miscellaneous

  • Republicans are prone to complain about the percentage of U.S. households who are so poor they don’t have to pay income tax (remember Mitt Romney’s revealing “47%” comments way back when? Or the Wall Street Journal’s “lucky duckies” editorials?). But that didn’t stop them from crafting their major tax legislation (the recent “Tax Cuts and Jobs Act”) in such a way that it will increase the percentage of American households who pay no federal income tax. The Tax Policy Center estimates that fully 44% of American households will pay no federal income taxes at all (2% more than ). About 25% will pay no payroll tax either, or their payroll tax will be offset by a refundable income tax credit.
  • “Millennials” (says the New York Times) are joining together to swap techniques for quitting the rat race and retiring early, in something called “the FIRE movement.” They begin to live more frugally, squirrel things away, take greater care of their investment decisions, and eye an early modest retirement or semi-retirement. Most of the examples in the article are of pretty well-off people who really just needed to stop living at or above the lifestyle they could afford. But it’s people like them who pay the taxes, and by stepping off the treadmill, they stop doing so or at least stop doing so much. So if you know anyone in that category, send them a link.
  • About ten years ago the number of Americans renouncing their U.S. citizenship began to shoot up, from what had been a normal range of two to eight hundred people a year to a high of 5,409 people in . But things seem to have leveled off since then. Why? Your guess is as good as mine, maybe better.

War Tax Resistance

  • Some war tax resisters are very public with their resistance, and consider protest and confrontation with the powers that be to be crucial parts of how they make their stand. Others are more private and understated, refusing to pay but not making a lot of hullabaloo about it. On the NWTRCC blog, Erica Leigh examines public vs. quiet resistance.
  • War tax resister Larry Bassett looks at “the power of war tax resistance in 2018” — trying to measure the effects of his own resistance and that of the war tax resistance movement. (As found on Facebook and at Citizen Truth.)
  • The Indypendent interviewed war tax resister Ruth Benn about the current U.S. anti-war movement.
  • A flash from the past in the Lewis Center, Ohio, ThisWeek Community News gives us a glimpse of a war tax resistance tactic used in the United States during World War Ⅰ. The government had put a war tax on rail travel, but apparently the tax only applied on tickets above a certain threshold value. So some travelers split tickets, buying tickets from point A to point B and then point B to point C to avoid paying the war tax that would have applied on a ticket from point A to point C.

Tax Resistance Internationally

  • Nicaragua’s Blue & White National Unity group has called for a consumer strike and energy strike. The consumer strike is meant to last three days and aims particularly at those consumer goods like fuel, alcoholic beverages, sodas, and tobacco that are most taxed. People are also encouraged to not use any utility power from 7 a.m. to 8 p.m., indefinitely. The group seeks the release of 400 political prisoners.
  • The Zimbabwe Congress for Trade Union went ahead with an anti-tax demonstration, which the government had banned under the pretense that public gatherings would contribute to a cholera outbreak. The government of Zimbabwe is trying to impose a 2% tax on all electronic funds transfers and is attempting to force citizens who hold their savings in foreign currency to convert that money into the notoriously hyperinflating Zimbabwean currency. Police raided the headquarters of the group and arrested 35 of its leaders in advance of the protests.
  • A report on migrants from Central America reminds us that fleeing ruinous and immoral taxation is among the motives causing people to flee. The case of Guillermo, who as a Central American teenager became the head of his family, is one example:

    Criminal organizations targeted and killed Guillermo’s cousin. The relative had failed to pay a gang’s “war tax” — money the gang extorts from people through threats of violence.

    They then turned their attention to Guillermo for payment.

    In , he was kidnapped and beaten by two uniformed police officers carrying out the gang’s orders. Their message was clear: Pay the war tax or face the murder and rape of his siblings. He realized that as long as they stayed in the region, they would never be free from gang violence — or the gangs’ attempts to pull them into a life of crime.

    Instead, he fled with his siblings on a 1,500-mile journey to the United States where he crossed the border, legally, as an asylum-seeker. But here he faces the threats of yet more criminal government gangs, this time in Trump’s ICE, the farcical court system set up to deny refuge in asylum cases, and the for-profit prison systems that exploit and abuse immigrant detainees.
  • Drivers’ war on speed cameras and other traffic-ticket-generating robots continues:

Tax Administration


Your up-to-the-minute tax resistance news:


Just when I think I’ve heard it all about the troubles at the IRS, everything turns out to be worse than I heard:

  • Remember when I told you about how the IRS was rolling out a new way for people to sign on to their on-line systems, and that it was a bit invasive, difficult, and buggy? And then remember when I told you how the rollout was going poorly and generating a lot of push-back? Well, the awful just continues to pile up and now the IRS is scrapping the new sign-on process and going back to the drawing board. Meanwhile, some seven million people may have tried to use the new process to log in, a process that included sending in “selfies” for biometric testing, which attracted the ire of privacy advocates. The contractor who designed and operated the identification verification service says these people can request to have these selfies deleted. Reading between the lines, I think this contractor is going to try to force everybody to use the back-up plan that was already in place for if the automatic selfie-check didn’t work: to have a video chat with an employee who would “eyeball” the chatter to see if their identity matches up with what’s on their paperwork. This isn’t really any less invasive than the selfie method, but maybe it triggers people’s “big brother” alarms less. It’ll certainly be less automated and therefore more expensive and time-consuming.
  • But the IRS is no stranger to doing things the more expensive and time-consuming way. For example, their mail-sorting and -opening machines have been broken for a long time, and IRS employees now have to do the work by hand. This means that if you send them a check, it takes them longer than it should for them to get that check out of the envelope and into the U.S. Treasury. This delay also means the government loses out on interest they could be earning on that money. How much interest? About $165 million a year. It would only cost $650,000 to buy completely new machines, or $365,000 to repair the broken ones.
  • And remember how I told you how the IRS had stopped sending out some enforcement notices to taxpayers? Taxpayers were getting frightening notices suggesting that the IRS didn’t think they’d filed their taxes, when in fact their tax returns were sitting in an enormous pile of tax returns the agency hadn’t gotten around to processing yet. So the IRS said it would stop sending out a few types of notice until it got all that sorted out — but said that it couldn’t stop sending out a bunch of others because it might mean they’d lose their chance to go after genuine tax scofflaws. Well, now they’ve thrown in the towel and said they’ll stop sending out a dozen more types of notices including the balance due, balance due second notice, notice of intent to levy, and withholding compliance letters that are standard issue to tax resisters like myself.
  • And remember how I told you that the IRS had a backlog of some 14 million unprocessed tax returns and other taxpayer correspondence? Turns out it’s more like 24 million. Meanwhile: “The agency sought to fill 5,000 positions for several campuses across the country in time for this tax season but was able to hire fewer than 200.”
  • In other news, the IRS is eager to reduce the size of the underground economy by demanding more reports on gig workers and others who get irregular payments through platforms like Paypal, Venmo, Etsy, and Zelle. But this isn’t going smoothly either. It seems to be raising more resentment than tax money, at least so far. And it’s easy to bypass. If you pay someone using one of these platforms and explicitly say you’re paying for goods or services, maybe it’ll eventually get reported as income. But if you don’t say this, as far as the platform is concerned maybe you’re just sending a gift or reimbursing someone for part of a meal you shared where they picked up the tab. Is today’s IRS going to send auditors out to make sure nothing falls through the cracks this way? Yeah sure.

In other news:

  • The tax strike against the Edmonton Incinerator continues to attract more strikers as the early adopters prepare for their first day in court.
  • Turkish opposition politician Kemal Kılıçdaroğlu announced that he plans to refuse to pay his utility bills until president Erdoğan withdraws 50% price hikes instituted at the beginning of the year. Some Alevist cemevis have also stopped paying.
  • The ragtag human guerrilla war against the traffic ticket robots continues, with robots succumbing to human attacks or being frustrated by human ingenuity in the U.K., Australia, Brazil, Italy, and France in recent weeks.