IRS to cut estate-tax lawyers who audit wealthiest Americans

[TwitchKitty]

http://www.denverpost.com/nationworld/ci_4083988

The federal government is moving to eliminate the jobs of nearly half the lawyers at the Internal Revenue Service who audit tax returns of some of the wealthiest Americans, specifically those who are subject to gift and estate taxes when they transfer parts of their fortunes to their children and others.

The Bush administration plans to cut the jobs of 157 of the agency's 345 estate-tax lawyers, plus 17 support personnel, within 70 days. Kevin Brown, an IRS deputy commissioner, confirmed the cuts after The New York Times was given internal documents by people inside the IRS who oppose them.

The administration has successfully lobbied Congress to enact measures that reduce the number of Americans who are subject to the estate tax but has failed in its efforts to eliminate the tax entirely.

Brown said Friday that he had ordered the staff cuts because far fewer people were obliged to pay estate taxes under President Bush's legislation.

But six IRS estate-tax lawyers whose jobs are likely to be eliminated said the cuts were just the latest moves behind the scenes at the IRS to shield people with political connections and complex tax-avoidance devices from thorough audits.

[TwitchKitty]

http://www.nytimes.com/2006/07/23/business/23tax.html?ex=1311307200&en=a1b03ade9e7403fc&ei=5090&partner=rssuserland&emc=rss

Estate tax lawyers are the most productive tax law enforcement personnel at the I.R.S., according to Mr. Brown. For each hour they work, they find an average of $2,200 of taxes that people owe the government.

Mr. Brown said that careful analysis showed that the I.R.S. was auditing enough returns to catch cheats and that 10 percent of the estate audits brought in 80 percent of the additional taxes. He said that auditing a greater percentage of gift and estate tax returns would not be worthwhile because “the next case is not a lucrative case” and likely to be of relatively little value.

That is a change from six years ago, when the I.R.S. said that 85 percent of large taxable gifts it audited shortchanged the government. The I.R.S. said then that it would hire three more lawyers just to audit taxable gifts of $1 million or more.

Over the last five years, officials at both the I.R.S. and the Treasury have told Congress that cheating among the highest-income Americans is a major and growing problem.

[TwitchKitty]

http://abcnews.go.com/Politics/story?id=2049451&page=1&CMP=OTC-RSSFeeds0312

According to a report by Public Citizen and United for a Fair Economy, 18 families, including the Mars candy family, the Gallo wine family, the Dorrance Campbell soup family and the super-rich Waltons who own Wal-Mart have spent more than $200 million to hire associations, business and trade groups, and lobbyists to get Congress to kill what they call the death tax.

"This report exposes one of the biggest con jobs in recent history," said Joan Claybrook, president of Public Citizen, in a statement. "This long-running, secretive campaign funded by some of the country's wealthiest families has relied on deception to bamboozle the public not only about who must pay the estate tax but about how repealing it will affect the country."

Public Citizen claims that just more than one-fourth of 1 percent of all estates will owe any estate taxes in 2006.

According to Public Citizen, these cash-rich families with a total worth of $185.5 billion could have gotten a $71.6 billion windfall if the repeal had passed the Senate and had been sent to President Bush for his signature.

[Carleton Hughes]

About bloody time,charitable foundations and non-profit PIPE funds are so needlessly complex

[t walgamuth]

it all fits in with the republicans vision of the country.

i remember ronald reagan promising to crack down on tax cheaters and when elected imposed a tax on waitresses based on an estimated income that the irs came up with instead of using their own estimates.

i figured that about summed up the republicans idea of who should be punished....waitresses! i am certain this move netted a huge increase in tax revinue.....NOT.

ha!

tom w

[John Doe]

The death tax is illegal double-taxation. Personally it is a little too commie for my taste and I am glad the powers that be are phasing it out.

[John Doe]

Originally Posted by t walgamuth

it all fits in with the republicans vision of the country.

i remember ronald reagan promising to crack down on tax cheaters and when elected imposed a tax on waitresses based on an estimated income that the irs came up with instead of using their own estimates.

i figured that about summed up the republicans idea of who should be punished....waitresses! i am certain this move netted a huge increase in tax revinue.....NOT.

ha!

tom w

And btw, the service industry tax 10% estimate closed a serious loophole for folks who could legally receive far less than minimum wage, make $100K in tips and pay taxes at the rate of $2.00 an hour.

Originally Posted by John Doe

The death tax is illegal double-taxation. Personally it is a little too commie for my taste and I am glad the powers that be are phasing it out.

Agreed, it is double taxation. On a much smaller scale, it's like when you buy a used car and have to pay sales tax. For example, think of how much money in sales taxes a six or seven owner mid '80s Mercedes has brought in for twenty years. It's a money making machine, because almost all Americans need a car in order to function. Thanks goodness my state created a exemption for farm equipment last year. Is it fair for a hard working farmer to have to pay sales tax on a used hay baler that has The been bought and resold countless times? Who makes more profit in the end? The company that makes the product? or the govt?
Sorry, just had to rant a bit.

[John Doe]

Originally Posted by John Holmes III

Agreed, it is double taxation. On a much smaller scale, it's like when you buy a used car and have to pay sales tax. For example, think of how much money in sales taxes a six or seven owner mid '80s Mercedes has brought in for twenty years. It's a money making machine, because almost all Americans need a car in order to function. Thanks goodness my state created a exemption for farm equipment last year. Is it fair for a hard working farmer to have to pay sales tax on a used hay baler that has The been bought and resold countless times? Who makes more profit in the end? The company that makes the product? or the govt?
Sorry, just had to rant a bit.

No offense JD but I see the used car tax as a transactional capital gains 'sales' tax and I am ok with that. With the death tax, you pay money making the pile, and then pay again for the priviledge of dying on a pile. No need to apologize for the rant.

[t walgamuth]

first, i never met a waitress who made 100k in tips.

second, the folks who accumulate huge fortunes seldom pay taxes on the accumulated wealth while accumulating it. they pay big shot attorneys and accountants thousands to avoid paying any taxes at all.

tom w

Ok, I stand corrected, and I can see the light now about the used car taxes. It's no different than when I had to charge sales taxes on a ancient pump organ, for example. It always slightly annoyed me that people would come into the store and wink at me and tell me they didn't need a receipt. I have seen what can happen if the state department of revenue gets its claws into a small business for not paying sales tax and I always paid in full. I just figured the tax into the price and let people think they were getting ne over on me and the govt.

[cmac2012]

Originally Posted by John Doe

The death tax is illegal double-taxation. Personally it is a little too commie for my taste and I am glad the powers that be are phasing it out.

i dunno. I've heard Bill Gates, Sr. and others describe a lot of the income of the wealthiest of the wealthy as very lightly taxed, if at all, in its heyday.

Money is a funny thing. One rich wag is reported to have said,"at first, money brings you happiness....but after awhile, all it brings is more money."

[John Doe]

Originally Posted by t walgamuth

first, i never met a waitress who made 100k in tips.

second, the folks who accumulate huge fortunes seldom pay taxes on the accumulated wealth while accumulating it. they pay big shot attorneys and accountants thousands to avoid paying any taxes at all.

tom w

First, Go to Panama City Beach FL, and interview some bartenders at the larger clubs. Club La Vela where I used to work is closed now (condos), but there are examples in Ft. Lauderdale, ATL, NYC maybe even better examples, but those I have not experienced first hand from an earnings standpoint.

Second, prove it--this is obviously a hearsay opinion and not one that speaks from first hand (from either side--the helper or helpee_) POV.

[John Doe]

Originally Posted by John Holmes III

Ok, I stand corrected, and I can see the light now about the used car taxes. It's no different than when I had to charge sales taxes on a ancient pump organ, for example. It always slightly annoyed me that people would come into the store and wink at me and tell me they didn't need a receipt. I have seen what can happen if the state department of revenue gets its claws into a small business for not paying sales tax and I always paid in full. I just figured the tax into the price and let people think they were getting ne over on me and the govt.

Not a bad *****, just a bad correlation

[Kuan]

Originally Posted by John Doe

The death tax is illegal double-taxation. Personally it is a little too commie for my taste and I am glad the powers that be are phasing it out.

Not the way I see it. I get a gift of several thousand bucks. I pay taxes. I win the lottery. I pay taxes. I get a bonus at work. I pay taxes. Dead men don't pay taxes. The loving receivers of good fortune do.