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Obamacare, 2010
Some bits and pieces from here and there:
You can find minutes and reports from ’s NWTRCC National Gathering in Cleveland on NWTRCC’s website.
There is typically a statute of limitations for federal tax crimes.
However, during wartime the statute of limitations for crimes “involving fraud or attempted fraud against the United States or any agency thereof in any manner, whether by conspiracy or not” goes into suspended animation “until 5 years after the termination of hostilities as proclaimed by a Presidential proclamation, with notice to Congress, or by a concurrent resolution of Congress” where the definition of “the term ‘war’ includes a specific authorization for the use of the Armed Forces, as described in section 5(b) of the War Powers Resolution (50 U.S.C. 1544(b)).”
There are some indications that the government is seeking to suspend the statute of limitations for federal tax crimes because of the present state of war.
TaxProf Blog reports: “The Treasury Inspector General for Tax Administration yesterday reported that 372,000 taxpayers erroneously claimed education tax credits in , totaling $532 million (an average of over $1,400 improper credit per taxpayer).”
Those tax resisters lucky enough to be expecting a large inheritance may take heart from this story of someone who successfully engineered her will so that her heir could donate to charity exactly enough of her estate so that she would owe no estate taxes on the remainder.
Anti-abortion political pressure has led to Congress inserting language in the upcoming health care legislation that would prohibit taxpayer money from going to pay for abortion.
Tom Tomorrow wonders when people opposed to their tax money being spent on war will get that kind of respect:
Another aspect of the upcoming health care legislation is that it includes a big role for the IRS.
This isn’t because the IRS is particularly skilled at administering social welfare programs (indeed fraud is rampant in programs like the earned income tax credit or those education tax credits mentioned earlier in this post), but because legislators have various incentives to hide the spending behind their legislation by not spending outright but only via tax credits and deductions and such.
Since increasing funding for the IRS is not politically popular, this all may have the effect of saddling the agency with more responsibility without giving it sufficient resources.
Maybe I’m jumping the gun on this, as there’s still a little bit of Congressional back-and-forth due before Obama can put his name on the dotted line, but here’s what I’ve been able to discern about the impact of the recent health care industry legislation on tax resisters like you and me:
The plan gives a lot of enforcement responsibility to the Internal Revenue Service without actually budgeting the agency any more money or personnel.
Looking into the crystal ball, I see that there’ll be some effort in the future to beef up the agency so that it can better handle these new responsibilities.
Peering closer, I think I discern that the agency won’t get nearly enough to cover the expenses of the new mandates, and so agency service, and its ability to go after tax delinquents, will probably further decline.
The bill encourages the founding of new non-profit health insurance issuers.
These issuers will be exempt from federal income tax.
Such tax-exempt, non-profit health insurers exist today, but are fairly rare.
A good analogy here is the credit union: as credit unions are to banks, these new non-profit health insurance issuers will be to ordinary health insurance companies.
They will take the form of member-run cooperatives.
(This starts now.)
A new health coverage tax credit is part of the bill.
This is a refundable credit for 80% of the cost of health insurance coverage, but it is only available to a small subset of taxpayers (“individuals who receive a trade adjustment allowance (and individuals who would be eligible to receive such an allowance but for the fact that they have not exhausted their regular unemployment benefits), individuals eligible for the alternative trade adjustment assistance program, and individuals over age 55 who receive pension benefits from the Pension Benefit Guaranty Corporation” who are not covered by Medicare or employer-subsidized plans).
(This starts in .)
There is also a new “premium assistance credit” — also a refundable tax credit — for people who get their health insurance via an exchange (the “exchange” model is also created by this legislation).
This credit, oddly, goes straight from the government to the insurer as a way of subsidizing your purchase of health insurance.
The amount the insurance company will get is based on your tax return from two years back, but the actual credit you qualify for will be based on your financial circumstances in the year you get the credit, so you’ll have to rectify this one way or the other on your tax return.
The credit amount is based on your income, and is only available to households whose cumulative modified adjusted gross income puts them between 100% and 400% of the poverty line for their household type.
(This all starts in .)
There is also a new subsidy for households in the 100–400% of the poverty line range who purchase high-deductible health plans.
These are the sorts of plans that qualify for Health Savings Accounts, but I’m not entirely sure of all of the ways the new law affects the old Health Savings Accounts scheme.
Assuming such accounts are still a good tax shelter, the new law may make them more attractive to people with low-incomes who might otherwise have been frightened off by the high deductible.
(This starts now.)
Beginning in , all Americans will be required to carry some minimum amount of health insurance.
The way this will be enforced is through the tax code: there will be a federal excise tax on non-insured people, payable by those people.
As with the social security system, the Amish managed to finagle themselves a conscientious objection provision.
This tax will be 2.5% of income above the standard-deduction/personal-exemption filing threshold, or a fixed amount: $95 per uninsured person in , $325 per in , $695 per in , and then indexed for inflation thereafter (whichever is higher).
If the cheapest health insurance you can find still costs more than 8% of your household income, you’re off the hook for this excise tax; you are also off the hook if you make so little income that you aren’t required to file an income tax return, if your lapse of required coverage was less than three months long, or if you are a resident of a United States possession (e.g. Guam).
I’m not the first to notice that for many people the cost of this excise tax will be far less than the cost of the insurance.
Weirdly, although this excise tax will be figured on your income tax return and will be part of your total tax burden for the year, the law specifically forbids the IRS from using its ordinary tools of liens, seizures, criminal & civil penalties, or interest in pursuit of unpaid amounts.
This will probably confuse the hell out of them and make a lot of work for their CoBOL team.
Also, it makes tax refusal a profitable no-brainer, as without penalties and interest, the unpaid amount will be eroded by inflation from year to year.
Starting in , health insurers will have to submit information to the IRS about all the people who have health insurance coverage with them, including contact information, the taxpayer identification (usually social security) number, details on the coverage, and “such other information as the Secretary may require.”
This could be a snag for non-filers who are trying to stay off of the IRS radar.
There is a new tax attached to most health insurance plans.
It starts at $2 per covered person in , and then rises each year based on the rise in the cost of health expenses.
There is also a new tax on health insurance companies, starting in .
You won’t pay these taxes directly, but indirectly via the cost of your health insurance.
The same sorts of insurers that are exempt from federal income tax will also get a reduction, though not an exemption, in the tax they pay here.
So-called “cadillac” high-end health insurance and reimbursement plans are heavily taxed to the extent that their benefits exceed a threshold that is calculated according to a formula that caused my eyes to glaze over and made me want to do anything besides think about it.
This won’t kick in until , by which time some subsequent Congress will probably have mucked with it, so it’s not worth paying much attention to anyway.
If you’ve gotten used to being able to pay for over-the-counter drugs with your Health Savings Account, Health Reimbursement Account, or Health Flexible Savings Account (“cafeteria plan”), you’ll be disappointed to find that, starting next year, you can only purchase prescription drugs (or insulin) this way.
Furthermore, the penalty for taking withdrawals from your Health Savings Account for non-authorized purposes has been increased to 20% of the amount.
There’s a new tax on drug manufacturers and importers, with the proceeds designated for the Medicare trust fund.
This starts in .
There is also a tax on medical devices (though not things like eyeglasses and hearing aids that are generally purchased by ordinary schmoes like you and me).
If you are unfortunate enough to have medical expenses that exceed 7.5% of your adjusted gross income in any particular year, you have been able to take any amount over 7.5% as an itemized deduction.
Starting in , you’ll have to be even more unfortunate, as this threshold will increase to 10%, with some exceptions.
There’s a new 10% tax on the price of indoor tanning services, starting in the second half of this year.
Self-employed people have been able to take an above-the-line deduction for the cost of health insurance for themselves and their dependents.
Under the new law, a dependent can include a child as old as 26 (before, the child had to be under 19, or under 24 and a full-time student).
Those of you lucky enough to be living off of your investments rather than from earned income have been exempt from paying social security and medicare taxes on your income.
No longer.
As of , you have to pay a 3.8% medicare tax on such unearned income to the extent that you rake it in above a certain threshold amount.
There is something called the “economic substance doctrine” that says that if a business engages in some complex economic transaction whose only effect is to lower the amount of taxes due by qualifying for the literal provisions of the tax code, without there being any other good reason for doing the transaction, then the business shouldn’t be able to take advantage of those tax benefits.
This doctrine, though, is more a matter of custom than of law, and plenty of folks think that the letter of the law, and not its less-discernible spirit, ought to apply.
This new bill tries to codify this doctrine and make it explicit and more uniformly-enforceable.
I expect that this will make a lot of lawyers very busy.
Since Congress deliberately uses the tax code as a prod to try to influence people and businesses to make certain decisions that they would otherwise not make for ordinary economic reasons (indeed this very bill is full of such provisions), this is weirdly schizophrenic.
The health care industry legislation that became law today (of which I addressed some of the implications for tax resisters ) includes provisions to accommodate the conscientious objection of people opposed to abortion and of Amish groups who have traditionally taught that the purchase of insurance betrays a mistrust of divine providence.
Amish in good standing will be exempt from the law’s requirement that all Americans have health insurance, which is to say that they will not be subject to the federal excise tax on uninsured individuals.
Health insurance plans will not be required to cover abortions — indeed, states may prohibit abortion-providing plans in their “exchanges” — and those that do cover abortion will have to do so via a separately-funded option that cannot be paid for via the various government subsidies in the law.
President Obama recently emphasized these abortion restrictions by issuing an executive order that reconfirmed the ban on using taxpayer money to pay for abortions.
But neither the orthodox Amish nor the anti-abortion activists seem pleased with these concessions.
Gary Kauffman of The Goshen News interviewed David Yoder, who monitors national law for the Old Order Amish.
He points out that while there is an exception written into the law that shields individual Amish people from having to be covered by health insurance, there is no such shield for Amish employers, even Amish employers of Amish employees, who will be required to provide health insurance for those they hire.
“It’s a huge concern for all Amish,” Yoder said.
“It’s definitely not something we could comply with.”
Yoder also worries that as government-mandated corporate health plans insinuate into the Amish community, the cooperative neighbors-helping-neighbors form of mutual aid that takes the place of health insurance among the Amish will degrade, and, along with it, the quality of health: “Even if there is an exemption for us, health care quality will still go down.
Maybe not immediately, but in five or ten years.”
Meanwhile, many anti-abortion activists aren’t at all convinced that the many safeguards in the law will actually prevent taxpayer money from subsidizing abortions, or enable people who don’t want to fund abortions to find both legally-compliant and conscientiously-acceptable health insurance:
Richard Doerflinger, associate director of the U.S. Conference of Catholic Bishops’ Secretariat of Pro-Life Activities, said the idea of tax resistance has been mentioned in response to concerns about unjust wars.
“This bill says most of the plans getting federal subsidies make every enrollee pay a separate payment solely for people’s abortions,” he said.
“Some people have said what an opportunity for a movement of resistance for people of faith who have these plans or are saddled with one; to refuse to pay that particular fee.
If that is the only option we have, that is an interesting idea for Catholics and Protestants to focus on.”
It is a remarkable contrast to this how much the concerns of conscientious objectors to military taxation are ignored by lawmakers.
People who don’t want to pay the salaries of torturers, or who have conscientious qualms about building weapons of indiscriminate slaughter, can be and are ignored.
Convocations of Catholic bishops don’t hold press conferences on their behalf, legislators don’t hold their votes back on a pretense of standing up for them.
The official word from the courts is that it would be too onerous for the government to carve out an exception for such conscientious objectors, though this recent bill and others show that Congress is perfectly capable of carving a little here and a little there when that’s what it takes to get the job done.
But, as with this recent bill, even were Congress to make some sort of concessions to conscientious objectors to military taxation, these would be unlikely to go far enough to be satisfying to any but those who were eagerly looking for an excuse to put their consciences down and get on with other business.
Reliance on robotic warfare has escalated from the Bush to the Obama administrations, with very little significant public debate.
More than ever before, it is true that the U.S. doesn’t want our bodies to be part of warfare; there’s also not much interest in our consent.
All that is required is our money.
As I may have mentioned, a provision of the recently-enacted health care industry legislation — one that was little-noticed at the time but that has attracted some commentary since — requires businesses to file 1099s with the government for every other business from whom they purchase goods or services totalling at least $600. Some commentators have focused on the paperwork headache this involves, others on whether it is intending to lay the groundwork for a new value-added tax, but Gary North thinks it may be an opportunity for resistance-via-over-compliance:
The IRS will be buried in billions of new forms. I’m an older guy.
I think back to Carl Sagan’s memorable words in the PBS series, Cosmos: “billions and billions.”
These forms will have to be scanned into the system.
If businessmen want to protest this law in a legal but effective way, they will have their tax preparers write in the numbers by hand.
Then IRS will have to type in the data on each form by hand.
Billions and billions!
Business owners and managers will be outraged.
But what if word spreads?
“No electronic filing!”
What if the tax preparers fill in all the forms by hand.
It is legal.
It is not efficient, but it’s not all that much extra work.
Pay a few dollars more per filing.
At the other end, the IRS will get to process these forms by hand.
Think of what happens if businesses were to challenge every challenge by the IRS?
The business’s CPA simply asks in writing — I do mean writing (hand-written) — for the IRS to review the case.
Point out one mistake made by the IRS.
Automatically, every business should challenge every request for more tax money.
No exceptions.
Be polite.
Just ask the IRS to review its case in terms of this new information.
There are always gray areas.
Put them to use.
Pay a few bucks to your tax preparer.
Paperwork is the essence of every bureaucracy.
Let’s do it by the book: with paper.
Some bits and pieces from here and there:
The Obama administration announced a few days ago that it would interpret the somewhat ambiguous existing law in such a way that would allow it to seize money from “Thrift Savings Plan” accounts to settle tax debts.
These plans are a variety of 401k-like retirement savings account that are available to employees of the federal government.
The big health industry legislation that passed a while back included a little-noticed (at the time) provision that would dramatically expand the requirements of businesses to file 1099 forms to report their payments to other businesses.
The IRS recently announced that, for now anyway, it plans not to require quite as much paperwork as the law at first glance seems to require.
“We plan to use our administrative authority to exempt from this new requirement business transactions conducted using payment cards such as credit and debit cards,” said IRS Commissioner Douglas Shulman.
“These transactions will already be covered by reporting requirements on payment card processors, so there is no need for businesses to report them as well.
So, whenever a business uses a credit or debit card, there will be no new burden under the law.”
The federal government also is expanding its use of direct deposit for payments it makes, and hopes to mostly phase out sending checks to people.
From here on out if you want your Social Security, unemployment insurance, veterans benefits, railroad retirement, and so forth, you’ll either have to give Uncle Sam your routing and account numbers or you’ll have to settle for getting your money in the form of a debit card.
This is being billed as a cost-saving measure (how expensive to mail all those checks!) but mailing out those plastic cards can’t be any cheaper, so I suspect it has more to do with being able to keep a closer eye on people’s money so as to narrow the size of the underground economy and make it easier to seize funds from people.
Some bits and pieces from here and there:
Congress passed and the president signed a long-anticipated transportation related bill.
The Senate version of the bill had been amended to give the government the authority to revoke passports from people who had not paid their taxes (once the delinquency reached a certain threshold).
The bill that passed does not include this amendment, as it did not survive the reconciliation process.
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You probably heard (a few times too many) that the Obamacare medical and health insurance industry legislation survived a Supreme Court challenge recently.
Bitching about Obamacare has become the cause célèbre of a large section of the conservative base this election year, and the usual pundits have been whipping up a froth of anger about it, and particularly about the “individual mandate” that people buy health insurance — a mandate that is enforced through an additional tax on uninsured people.
Most interesting, from the Picket Line parochial point of view anyway, is that this tax will just be a line-item on the annual federal income tax statement butthe law explicitly prohibits the IRS from using its ordinary tools of liens, levies, seizures, and penalties to enforce payment of this part of the tax.
I expect this will cause them some headaches and make them reluctant to pursue any cases at all against low-level tax refusers.
A number of people who are part of the anger froth have already declared boldly that they plan to refuse to pay the tax, though American conservatives have a pretty poor record of backing up threats of tax resistance with action.
Myself, I hope to remain insured, so I will probably not have the opportunity to resist this tax.
The Occupied Times featured an article on war tax resistance from The Reverend Nemu: Render Unto Caesar.
Here are some items of note that have come to my attention in recent weeks:
I wondered if this might happen: One of the weirder aspects of Obamacare is that the individual health insurance mandate is to be enforced by adding a penalty to the income tax of any individual who fails to get health insurance — but for public relations reasons the IRS is forbidden to use its usual methods of liens, levies, seizures, and the like to chase down this penalty if the taxpayer refuses to pay it.
So now, Obamacare foes are starting to whisper about this cheap-and-easy civil disobedience opportunity.
Though “whisper” isn’t really the right word when you’re talking about Rush Limbaugh.
Are Cryptocurrencies [like Bitcoin] “Super” Tax Havens? asks Omri Y. Marian of the University of Florida.
Marian concludes: “Significantly, cryptocurrencies possess all the traditional characteristics that tax havens do; Earnings are not subject to taxation, and taxpayers’ anonymity is maintained.… Thus, cryptocurrencies have the potential of defeating the recent successes of governments in battling offshore tax evasion.… while governments have paid some attention to this issue, they have so far failed to identify the acuteness of the potential problem.”
Among the things the so-called government “shutdown” brought us was a halt in almost all IRS levies and liens for the duration.
The agency had plenty on its plate before the shutdown, and now it’s already behind in regearing for tax season.
France enacted a populist measure to throw a 75% marginal tax on incomes above €1 million.
Professional soccer teams, whose players may earn large annual incomes but usually over a short viable career, have decided to protest by going on temporary strike, effectively eliminating a round of matches this year — the first time teams have done anything of this sort .
[T]he law is almost perfectly designed for tax fraud.
This tax fraud, which will be at least somewhat legal, will happen in two stages.
First, the way the Obama administration is implementing the law allows people to state their income with little to no verification.
By stating a low income, people can qualify for a large subsidy which gets paid in advance.
When people receiving subsidies file their taxes in , if it turns out their income was higher than they originally stated, you might think they would then have to repay the subsidy.
But now we get to the second part of the tax fraud.
Under the law it is not only difficult for the government to get its money back, in some cases it is legally impossible.
There are two limits on the ability of the IRS to collect the overpayment.
The IRS is not allowed to place a lien on your property or garnish your wages in order to collect money owed under Obamacare.
This applies to both overpayment of subsidies and to the penalty for not purchasing insurance at all.
That means unless a person voluntarily pays what is owed the IRS can only collect money from people who would otherwise be owed a refund on their taxes.
If someone owes money either for not purchasing insurance or overpayment of a subsidy, the IRS can deduct the amount owed from the refund the person would have received.
If they are not owed a refund large enough to collect the entire amount, there is nothing more the IRS can do.
In addition to the above difficulties that the law places on the IRS, the law also limits the amount of any subsidy overpayment that must be repaid under any circumstances (look at the very end of the law in this link).
In other words, if a person lies about their income in order to collect a larger subsidy, there is a good chance that they legally can keep at least some of the overpayment.
For example, for a family with actual income of less than 200 percent of the poverty line (around $47,000 for a family of four), the most that must be repaid is $600. If the family’s income is as high as $115,000, they still cannot be forced to repay more than $3,500.
Given that the Obamacare subsidies for a family of four can easily be $10,000 or more the difference between what is paid as an undeserved subsidy and the amount that must be repaid could be quite large.
Recent reports have described how the IRS has been paying $4 billion per year in fraudulent refunds filed by thieves who didn’t even do a particularly good job of disguising the fraud.
The IRS was also found to have paid over $110 billion in fraudulent earned income tax credits over a decade.
Thus, tax fraud is a major problem already and Obamacare seems almost to be intentionally designed to make tax fraud easy.
Obamacare is going to be one of the largest government programs we have as measured by spending, with most of the spending occurring through the subsidies designed to make insurance affordable.
Yet the program is designed in a manner that invites tax fraud on a massive scale.
Just understate your income, arrange your withholding so you are not due a refund, and keep your subsidy overpayment with no fear of reprisal.
Given that an entire industry has grown up helping people commit tax fraud using the earned income tax credit, we should expect a similar phenomenon to arise around the Obamacare subsidies.
If the IRS cannot minimize fraud when they have the full range of their enforcement powers, how bad is the fraud going to be when the IRS has both hands tied behind its back?
Metaphorically, the Obamacare page is still loading and its icon looks like it’ll be spinning for a while yet, but I’m ready to share a very preliminary evaluation at how it interacts with my low-income tax resistance method.
In summary: the news so far is good.
It looks like I will be able to have a high-deductible health insurance plan that allows me to continue to contribute to a tax-advantaged Health Savings Account.
My strategy of keeping my adjusted gross income (AGI) below a certain threshold in order to avoid income tax has the side-effect of qualifying me for the maximum subsidy: I will be paying next-to-nothing (a token dollar per month) for this insurance.
Here are some observations and questions I’ve come up with along the way.
The law is complex and confusing and they’re still tweaking it, so don’t take any of this as gospel:
As a self-employed person, I’ve been permitted to take the cost of my health insurance premium as an “above-the-line” deduction on my 1040 (that is, a deduction that has the effect of lowering my AGI).
Because of this, although my premium is going from $2,500+ in 2013 to $12 in 2014, this won’t translate to any extra spending money for me as it wasn’t money I was spending out of my post-tax income anyway.
However, I’ll need to bring in $2,500 less income next year to meet my over-all expenses.
In other words, I’ll be able to maintain the same standard of living while having to work for $2,500 less income.
The way the insurance premium subsidy works is a sort of Rube Goldberg machine centered on the federal income tax, and it goes a little something like this:
The health insurance premium subsidy is implemented as a tax credit that is based on the premium amount and on your AGI.
If your AGI is low enough, some or most of your premium is paid by the government (or, if it’s even lower, you may be shuffled into Medicare).
Instead of making you pay for your insurance throughout the year and then giving you a big credit when you file your taxes the following year, the government parcels this credit out to you indirectly — by paying it to your insurance company in lieu of that portion of your own payment.
But you don’t know what your AGI is going to be for 2014 until you fill out your taxes in 2015, so you have to play a guessing game.
When you do file and learn what your real AGI was, you also find out what your credit should have been for the year.
If the government oversubsidized you, you’re supposed to pay it back; if you paid more than you had to, the government should issue you a refund.
But there are a number of restrictions on the government’s ability to collect any overpaid subsidies: the amount that the government can demand that you return has an absolute cap on it, and the IRS is prohibited by the law from using almost all of its usual measures for recovering tax debts to go after this specific sort of delinquency.
Since all the tax amounts are going to be mixed up on the 1040 and come out as one number at the end, I expect that the agency is going to have a hell of a time figuring out how to take enforcement actions against people whose tax debts are mixtures of overcredited Obamacare premiums and resisted income taxes.
(Hint, hint.)
I think I may have had this last point wrong.
I have heard since that the absolute caps are only for people at low income levels: so that if you qualify for a subsidy, but the subsidy you actually received was higher than what you qualify for, you might not have to repay the complete difference between the two amounts; however, if you don’t qualify for a subsidy but you got one anyway, you can be required to pay back the full amount.
Also: I think the restrictions on the IRS’s ability to use its enforcement measures against you may be restricted to its efforts to retrieve the amount of the tax penalty for not having health insurance at all, and that it may use all of its usual measures to try to recover over-paid subsidies.
Again, the details of the law remain fuzzy to me, and I read a lot of contradictory things about it, so I’m piecing it together.
So wait a minute: The government is going to keep paying to subsidize my health insurance at the same time that they’re trying to chase me down for (last I counted) $26,000+ I’ve refused to pay them?
Seriously?
Apparently so.
I have heard of no mechanism for withholding subsidies from people with tax debts.
Perhaps if I foolishly applied for the subsidies as a tax credit on my 1040 instead of applying for the government to use the subsidy to cover my monthly premium, the IRS would seize the refund and apply it to what they’re trying to extract from me, but they don’t seem to have any interest in interrupting the payments if I apply in the normal way.
I anticipate at some future date, despicable leeches like myself will be subject to some sort of two-minute hate and Congress will cut us off in a flurry of righteous hearings and outraged pontifications.
That might make this good news turn to bad news, as I then will be on the hook for the full premium of what I wouldn’t be surprised to find would be an inferior and more expensive product than I have now (keeping my present insurance plan was not an option as it’s being canceled at the end of the month).
For those of you who are signing up for health insurance in this period of flux, I recommend that you seriously consider a plan that allows you to contribute to a Health Savings Account.
Such plans usually have higher deductibles, so you have to be comfortable with that, but Health Savings Accounts are a good way to shield a good hunk of your income from federal income tax.
Robert W. McGee continues his series of investigations into attitudes on the ethics of tax evasion, this time surveying philosophy professors about which circumstances, if any, they think may justify tax evasion.
He’s also done a meta-study of some of his earlier work to try to determine if there are gender differences in evaluating the ethics of tax evasion.
The folks behind the Spanish “comprehensive disobedience” project have launched a multi-lingual, international website:
IntegraRevolucio to coordinate the work of people around the world who are working on similar lines.
They also plan to launch a new media project — RADI.MS — soon.
NWTRCC National Gathering in San Diego, California.
There was a focus at this gathering on exploring the connections between war tax resistance and other struggles in the peace-and-justice milieu: the back-room antidemocratic negotiations for the TransPacific Partnership, the criminalization of immigration, the war on drugs, the militarization of schools, and so forth.
We heard from several local activists who are concentrating on various of these facets.
We also discussed our own experiences as war tax resisters and various challenges we were encountering.
One woman talked of being targeted by an unusually zealous IRS agent who succeeded in attaching 50% of her social security (it is more typical for the IRS to seize 15% from recipients who have tax debts).
There was concern that some obscure language slipped into a recent farm bill might have eliminated the statute of limitations that has prevented the IRS from going after the tax debt of many war tax resisters when it has remained uncollected for ten years (the bill’s language is difficult to interpret, but in any case we haven’t seen evidence of any IRS policy change in this regard yet).
NWTRCC’s social media consultant Erica Weiland shows us how to spread the word about tax resistance using social media tools
We talked about the new challenges associated with Obamacare.
For example, those resisters who have been refusing to file tax returns as part of their resistance are thereby locked out of the insurance premium subsidy program and find it harder to participate in the insurance marketplace.
Also, those resisters who are married filing separately as a way of partially shielding their non-resisting spouses from the consequences of their resistance, are also finding that this locks out both spouses from the program.
One resister spoke of the difficulties he was having in finding an accountant or tax advisor who was capable of understanding the particular concerns and goals of a tax resisting client.
Peter Smith gave us an update on the newly-revitalized War Tax Resisters Penalty Fund, which just completed its first appeal, which achieved a 79% reimbursement of penalties and interest for three resisters in one month.
The new policy of the Fund puts a one-month deadline on appeal responses, but carries over any unreimbursed amount to the following appeal, so resisters who apply to the fund for reimbursement of penalties and interest can expect to eventually have the full amount reimbursed.
We also talked about a number of NWTRCC-internal projects: a report from our strategy and message retooling subcommittees, a look at a new crowdfunding project that the fundraising team will be pursuing shortly, and a new initiative to make sure our group is better-represented at conferences and gatherings of allied organizations and movements.
Robert Randall has been investigating the provisions of the Affordable Care Act (a.k.a. “Obamacare”) from the perspective of a war tax resister looking for new ways of interfacing with the tax code.
He recently wrote up his findings for the wtr-s mailing list.
His conclusion: “the Affordable Care Act, in addition to offering many of us health insurance when before we could get none, also offers new possibilities for war tax resisters to reduce, convert, or even eliminate taxes which go to war.
We should include this method in our long list of methods for doing wtr and encourage our counselees to seriously consider the pros and cons of using this law.
We should also develop additional strategies using the ACA…”
Randall explains the complicated steps you need to take to enroll for insurance in a way that is most efficient for getting ACA tax credits.
He also describes a variety of techniques you may be able to use to make the ACA supplement your chosen form of tax resistance.
The IRS
noticed that I didn’t include a check with my tax return again this year.
They responded by sending one of their “Amount Due”
CP14 letters. It contained a surprise:
Billing Summary
Tax you owed
$5,548.00
Payments and credits
−12.00
Failure-to-pay penalty
55.36
Interest charges
15.04
Amount due by
$5,606.40
What’s that −$12.00 “Payments and credits” bit?
That is the same amount that I paid for my health insurance this year. I have
one of the Obamacare exchange’s heavily-subsidized plans. Indeed, according to
the rules, I’m supposed to get this plan for free, but for some reason the
insurance company insists on charging me a token $1 per month for it. I’m
able to take this $12 as a credit on my tax return (line #69: “Net premium tax
credit”).
But the $5,548.00 shown above is exactly $12 more than the $5,536.00 that I
calculated on my 1040, so apparently they added this back in on my tax return
and then subtracted it as a “payments and credits” amount.
I’m not quite sure what to think of this shell game. Did the
IRS
trick me into paying $12 in taxes last year by disguising it as health
insurance premium payments? Or, because I’m getting free health insurance on
Washington’s dime, do I have nothing to complain about?
Included with the letter was an explanation of the penalties (0.5% of what I
owe per month, until the amount hits 25% at which point the penalties stop),
and interest (currently 3% per year, but subject to change).
Also included was a copy of their new single-sheet Publication 1: “Your Rights
as a Taxpayer: The Taxpayer Bill of Rights.” This is a document the agency
released with much fanfare a while back. Though called a “Bill of Rights” in
mimicry of the set of Constitutional amendments, this bill of rights is
thoroughly unenforceable and creates no new obligations for the
IRS. It’s
more of a “rights we’d like you to think you enjoy until such time as we decide
to violate them” list. A cynical “customer relations” sort of ploy.
For example, #2: “The Right to Quality Service” (“Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS…”) was notoriously violated this year: the agency shut down its in-house tax preparation clinics, kept callers on hold for an average of a half-an-hour or so (and even so more than half of those who called in never reached anyone — the agency flat-out hung up on eight million calls without answering them), and refused to answer any but the most basic tax questions.
The agency, of course, claimed that Congressional budget cuts were to blame — but they were caught diverting some of their discretionary funds from customer service.
A new issue of NWTRCC’s newsletter is out, with content including:
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.
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.
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 to 362,000 in .
The agency has also drastically reduced its investigations of filers who do not pay their tax debts.
In , the IRS let $482 million in old tax debt lapse, but by , that number increased to $8.3 billion.
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.
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.
