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Tuesday, July 25, 2006

Don't Like the Estate Tax? Don't Enforce It

Maybe the problem with our current leadership is that many of the people in charge, people who grew up with wealth, power, and prestige, are used to getting their own way. They cannot stand or accept being told they can't do what they want to do, so they just find a way to do it anyway. This is from A Taxing Matter:

If you can't cut the estate tax, cut the enforcement team, by Linda M Beale: The New York Times carried an interesting article on a scoop based on internal documents at the IRS. See David Cay Johnston, IRS Will Cut Tax Lawyers Who Audit the Richest: "The IRS plans to cut the jobs of 157 of the agency's 345 estate tax lawyers, plus 17 support personnel, in less than 70 days." The person ordering the cuts, Kevin Brown, said it was done because far fewer people need to pay estate tax under the Bush legislation... But the Times articles notes that "six IRS estate tax lawyers whose jobs are likely to be eliminated said in interviews that 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." Another called them "a back-door way for the Bush Administration to achieve what it cannot get from Congress, which is repeal of the estate tax."

This decision to cut enforcement personnel makes no sense from ... a collections efficiency standpoint. ... [W]ealthy people are the ones with the most to gain from cheating, and estate tax is one of the ways they can cheat most easily, with fake family partnerships and ridiculously low prefab valuations of their valuable property. As Colleen Kelly states, "If these lawyers are not there to audit the gift and estate tax returns, than a lot of taxes that should be paid will go uncollected..."

The NY Times article also notes that:

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.

I assume that, even with benefits thrown in, the I.R.S. tax lawyers make less than $2,200 per hour. If so, why is Mr. Brown eliminating them?

    Posted by on Tuesday, July 25, 2006 at 12:23 PM in Economics, Politics, Taxes | Permalink  TrackBack (0)  Comments (11)

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