A Response To: "Tax Credit Troubled By False Claims"
Read This First --------> Editorial Link
Do you have fact checkers on your staff?
In "Tax Credit Troubled By False Claims" the author makes several mistakes and is deliberately misleading in his editorial. Is it not the responsibility of the editorial staff to check on the facts purported in something posted on the website for which they are responsible?
The most egregious example of misleading is the following statement:
"The strongest criticism-focusing on low-income working families rather than corporate and high-income tax evaders-has emotional punch but unfortunately rests on a false dichotomy. This is not an either-or scenario. The IRS can and does actively pursue all types of tax fraud, spending more than $3.5 billion a year on tax law enforcement, 23 times the amount earmarked for EITC compliance."
Based on reports by the IRS and the GAO as reported in the book "Perfectly Legal", this statement is not only misleading but also close to being an outright lie.
"The extra money that Congress gave the IRS beginning in 1995 to audit the working poor came as it was reducing the ability of the IRS to audit corporations and the affluent. By 2002 the number of auditors had been slashed by a fourth, to fewer than 12,000, and many of the most experienced auditors resigned or retired. That year the IRS audited five of the working poor for every affluent American audited.
The year before, the disparity was even greater. In 2001, the IRS audited 397,000 of the nearly 20 million returns filed by the working poor who applied for the earned income tax credit. The IRS audited about 50,000 of the more than 7 million returns filed by people making $100,000 or more. That means that while there were close to three times as many working poor as affluent, the number of their tax returns chosen for audit was nearly eight times as many. Indeed, of all the 744,000 individual tax returns that the IRS audited in 2002, more than half were filed by the working poor, who account for less than one in six taxpayers.
Looked at another way, 1 in 47 of the working poor had their returns audited, compared to 1 in 145 of the affluent and 1 in 400 returns filed by partnerships..."
Now, even with this kind of scrutiny of the WORKING poor, the statistics stemming from the results of the audits stands in stark contrast to the audits of the wealthy and of partnerships. Furthermore, the WORKING poor, who rely on their income to survive, not just live well, get screwed out of their credit when audited, which causes further problems.
"The average delay in getting the credit once an audit is ordered is 265 days, about nine months. And in the end two thirds of those audited get a refund, the average check totaling $1,420, IRS Taxpayer Advocate Nina Olson told Congress in her annual report in 2003.
That two thirds of audited returns filed by the working poor still result in a refund stands in sharp contrast to the audit statistics, which show that two thirds of [all] audits result in more tax being owed."
The IRS freely admits that what few problems there are with the program stem mostly from MISTAKES, not fraud. In fact, most fraud comes from wealthy people trying to shelter their income by using a combination of rules, to include EITC. Examples like the recipient of a tycoon's fortune that lived on Fifth Avenue in New York, but worked just enough to qualify for the credit and the subsequent tax cut that comes from not working enough to be taxed, even though she had enough money to live in the Olympic Towers and not work everyday. Or, how about Real Estate business owners who claim wages low enough to qualify, but then pay themselves "dividends" that give them a total compensation of $100,000 or more? I guess it's much easier to audit those who can't afford lawyers.
"In 2002 the IRS assessed just 22 negligence penalties against 2.5 million corporations, a decline of more than 99 percent from 1993 when nearly 2,400 penalties were imposed. Even when it catches corporations cheating, the IRS is not so harsh with them as with the working poor. Beginning in 2002 the IRS offered to settle cases with companies that had cheated on their taxes under terms that excused them from any penalties. In come cases it let the companies keep a fifth of their ill-gotten tax savings."
I guess the corporate and wealthy people don't need to worry about cheating carrying forward into schools, work and other areas of life as they have already incorporated it into their daily life and work routines.
Let's be straight. Despite the author’s platitudes about the good of the EITC, the implications of the editorial are that the poor are screwing the average taxpayer. The dogmatic approach and use of statistics out of context is a glaring example of intellectual slight-of-hand. Basically, the author is a propagandist and the editors are willing accomplices. I wonder how you can look in the mirror everyday and go to church every Sunday. I ask that you at least try to use relevant fact in your essay and editorials so that readers can at least try to make an informed opinion. If readers are going to rely on people like Mr. Jones and the Hoover Institution to package and sum up their opinions for them, then let's try to at least give them opinion based on empirical evidence and not ideological propaganda.
Read This First --------> Editorial Link
Do you have fact checkers on your staff?
In "Tax Credit Troubled By False Claims" the author makes several mistakes and is deliberately misleading in his editorial. Is it not the responsibility of the editorial staff to check on the facts purported in something posted on the website for which they are responsible?
The most egregious example of misleading is the following statement:
"The strongest criticism-focusing on low-income working families rather than corporate and high-income tax evaders-has emotional punch but unfortunately rests on a false dichotomy. This is not an either-or scenario. The IRS can and does actively pursue all types of tax fraud, spending more than $3.5 billion a year on tax law enforcement, 23 times the amount earmarked for EITC compliance."
Based on reports by the IRS and the GAO as reported in the book "Perfectly Legal", this statement is not only misleading but also close to being an outright lie.
"The extra money that Congress gave the IRS beginning in 1995 to audit the working poor came as it was reducing the ability of the IRS to audit corporations and the affluent. By 2002 the number of auditors had been slashed by a fourth, to fewer than 12,000, and many of the most experienced auditors resigned or retired. That year the IRS audited five of the working poor for every affluent American audited.
The year before, the disparity was even greater. In 2001, the IRS audited 397,000 of the nearly 20 million returns filed by the working poor who applied for the earned income tax credit. The IRS audited about 50,000 of the more than 7 million returns filed by people making $100,000 or more. That means that while there were close to three times as many working poor as affluent, the number of their tax returns chosen for audit was nearly eight times as many. Indeed, of all the 744,000 individual tax returns that the IRS audited in 2002, more than half were filed by the working poor, who account for less than one in six taxpayers.
Looked at another way, 1 in 47 of the working poor had their returns audited, compared to 1 in 145 of the affluent and 1 in 400 returns filed by partnerships..."
Now, even with this kind of scrutiny of the WORKING poor, the statistics stemming from the results of the audits stands in stark contrast to the audits of the wealthy and of partnerships. Furthermore, the WORKING poor, who rely on their income to survive, not just live well, get screwed out of their credit when audited, which causes further problems.
"The average delay in getting the credit once an audit is ordered is 265 days, about nine months. And in the end two thirds of those audited get a refund, the average check totaling $1,420, IRS Taxpayer Advocate Nina Olson told Congress in her annual report in 2003.
That two thirds of audited returns filed by the working poor still result in a refund stands in sharp contrast to the audit statistics, which show that two thirds of [all] audits result in more tax being owed."
The IRS freely admits that what few problems there are with the program stem mostly from MISTAKES, not fraud. In fact, most fraud comes from wealthy people trying to shelter their income by using a combination of rules, to include EITC. Examples like the recipient of a tycoon's fortune that lived on Fifth Avenue in New York, but worked just enough to qualify for the credit and the subsequent tax cut that comes from not working enough to be taxed, even though she had enough money to live in the Olympic Towers and not work everyday. Or, how about Real Estate business owners who claim wages low enough to qualify, but then pay themselves "dividends" that give them a total compensation of $100,000 or more? I guess it's much easier to audit those who can't afford lawyers.
"In 2002 the IRS assessed just 22 negligence penalties against 2.5 million corporations, a decline of more than 99 percent from 1993 when nearly 2,400 penalties were imposed. Even when it catches corporations cheating, the IRS is not so harsh with them as with the working poor. Beginning in 2002 the IRS offered to settle cases with companies that had cheated on their taxes under terms that excused them from any penalties. In come cases it let the companies keep a fifth of their ill-gotten tax savings."
I guess the corporate and wealthy people don't need to worry about cheating carrying forward into schools, work and other areas of life as they have already incorporated it into their daily life and work routines.
Let's be straight. Despite the author’s platitudes about the good of the EITC, the implications of the editorial are that the poor are screwing the average taxpayer. The dogmatic approach and use of statistics out of context is a glaring example of intellectual slight-of-hand. Basically, the author is a propagandist and the editors are willing accomplices. I wonder how you can look in the mirror everyday and go to church every Sunday. I ask that you at least try to use relevant fact in your essay and editorials so that readers can at least try to make an informed opinion. If readers are going to rely on people like Mr. Jones and the Hoover Institution to package and sum up their opinions for them, then let's try to at least give them opinion based on empirical evidence and not ideological propaganda.
posted by Mike at 10:15 AM
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