Drudge Retort: The Other Side of the News
Friday, November 15, 2019

Americans owe a cumulative $131 billion in unpaid taxes, enough to completely fund the Department of Education for two years. The bulk of that money is owed by the wealthiest people in the country, yet the IRS isn't attempting to collect it from them. Instead, as IRS Commissioner Charles Rettig confirmed in a letter to Congress recently, the agency literally can't afford to audit the rich, so it's pursuing the poor instead.

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ProPublica has published multiple stories on the sad state of the modern IRS over the past year. They found that a person is more likely to get audited if they make $20,000 a year than if they make $400,000.

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Studies have shown, even with more expensive audit costs, the IRS Enforcement division spends pennies to bring in dollars. Underfunding the IRS is a willful attempt to keep the rich from being audited, and those in charge know that fact well. Starving the beast to the point of not being able to audit the richest didn't happen by accident.

#1 | Posted by Danforth at 2019-11-15 10:21 AM | Reply | Newsworthy 4

With the new tax code, there will be three groups left to audit: the richest, the poorest, and the self-employed. The IRS just eliminated the most lucrative of the three.

#2 | Posted by Danforth at 2019-11-15 10:22 AM | Reply

@#1 ... Underfunding the IRS is a willful attempt to keep the rich from being audited, ...

So the Republican strategy works.

#3 | Posted by LampLighter at 2019-11-15 10:23 AM | Reply

I've read about this for a while now, I'm glad you posted about it Danforth.

#4 | Posted by danni at 2019-11-15 10:26 AM | Reply

"So the Republican strategy works."

Both sides: help the rich, and hurt the poor.

#5 | Posted by Danforth at 2019-11-15 10:26 AM | Reply | Funny: 1 | Newsworthy 2

Once the lawyers of the wealthy line up against the lawyers of the government, it would cost 130B to collect 131B. No, I have no link for this, it's a WAG.

#6 | Posted by 6thPersona at 2019-11-15 10:41 AM | Reply

"Once the lawyers of the wealthy line up against the lawyers of the government, it would cost 130B to collect 131B."

So the choice is collect an additional billion, or let people cheat on their taxes. If we can profit $1 billion, I say go for it.

#7 | Posted by Danforth at 2019-11-15 10:45 AM | Reply

IRS Admits They Can't Afford To Audit The Rich

I believe it ...

#7 | POSTED BY DANFORTH
IF you can .. what if you can't ? Is the 130B worth it?

Put it another way, you are career civil servant working for the Fresno IRS. Would you put you job on the line, spend $130B just to hope it might work out in your favor?

My guess would be the more money that needs to be spent the less likely you are going to win. Just a hunch.

Of the almost 1.0 million examinations of tax returns, almost 30,000 resulted in additional refunds to the taxpayer totaling more than $6.0 billion
www.irs.gov

With the new tax code, there will be three groups left to audit: the richest, the poorest, and the self-employed. The IRS just eliminated the most lucrative of the three.#2 | POSTED BY DANFORTH

Again with lies you just can't back up ...

All this being said, the higher you adjusted gross income, the more likely you are to be audited.
www.irs.gov

I await your moving of the goalposts.

#8 | Posted by AndreaMackris at 2019-11-15 11:18 AM | Reply

"IF you can .. what if you can't ? Is the 130B worth it?"

Two things: one, YES, and two, the WAG was waaaaaay off base.

"Put it another way, you are career civil servant working for the Fresno IRS. Would you put you job on the line, spend $130B just to hope it might work out in your favor?"

That makes no sense at all. The IRS has a formula of cost/retrival, and it's always more brought in that the cost.

"My guess would be the more money that needs to be spent the less likely you are going to win."

You'd be wrong.

"Again with lies you just can't back up ..."

Do the long math. MANY more poor people are audited than wealthy folks.

"I await your moving of the goalposts."

I await you learning what the equation is, before proving you don't.

#9 | Posted by Danforth at 2019-11-15 11:27 AM | Reply

"Of the almost 1.0 million examinations of tax returns, almost 30,000 resulted in additional refunds to the taxpayer totaling more than $6.0 billion"

So roughly 3% ended up in refunds. What do you think happened with the other 97%?

You do realize, I hope, 97% is LARGER than 3%?

#10 | Posted by Danforth at 2019-11-15 11:29 AM | Reply

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The bulk of that money is owed by the wealthiest people in the country

That's because they pay the lion's share of taxes. The IRS audits about a million returns each year. About .5% of everyone earning less than $500k gets audited. That number climbs as wealth increases. Almost 7 percent of people earning over $10mil get audited.

#11 | Posted by MUSTANG at 2019-11-15 12:09 PM | Reply

"That's because they pay the lion's share of taxes. "

No, that's because the OWE the lion's share of the taxes.

"About .5% of everyone earning less than $500k gets audited. That number climbs as wealth increases. Almost 7 percent of people earning over $10mil get audited."

Okay, now do the long math, and multiply each group's representational percentage by the taxpayers in that category, and it'll show the vast majority of audits are poorer people. In fact, the county with the highest audit percentage in America is one of the poorest.
projects.propublica.org

#12 | Posted by Danforth at 2019-11-15 12:14 PM | Reply

"Instead, as IRS Commissioner Charles Rettig confirmed in a letter to Congress recently, the agency literally can't afford to audit the rich, so it's pursuing the poor instead."

^
With Liberty and Justice for all.

See, this is why younger generations don't much care for the America you Boomers created.

It's a Potemkin Village of the America they were promised in the Pledge of Allegiance.

#13 | Posted by snoofy at 2019-11-15 01:37 PM | Reply | Newsworthy 1

Right now, earning 500k/yr puts you in the 1% (nationwide average). The 1% earns about 20% of taxable income (2016 numbers) in the US and pays just under 40% of all federal income tax. The article is noticeably thin in defining "the bulk" of owed taxes, but mathematically, if everyone in the US failed to pay their taxes, the 1% would owe "the bulk". It's probably also true even if a substantially smaller percentage of the 1% failed to file, given that 50% of Americans pay no federal income tax whatsoever.

#14 | Posted by MUSTANG at 2019-11-15 01:38 PM | Reply

"and pays just under 40% of all federal income tax."

What percentage of payroll taxes do they pay? Since, as I'm sure you know, over 2/3rds of workers pay more in payroll taxes over their lifetimes compared to income taxes.

"The article is noticeably thin in defining "the bulk" of owed taxes"

They specifically said most of it is owed by the richest.

"given that 50% of Americans pay no federal income tax whatsoever. "

When Republicans bring that up, it's like a kid who murdered both his parents suddenly bitching about being an orphan. The reason ~50% don't pay income taxes is due to FIVE Republican initiatives. Let's see how honest you can be about the oranges: How many of those initiatives can you name?

#15 | Posted by Danforth at 2019-11-15 01:46 PM | Reply

They specifically said most of it is owed by the richest.

Exactly. Are they just assuming it to be true or is there a citation for that?

What percentage of payroll taxes do they pay?

You're not just moving goalposts, you're setting up a whole new set. This is about delinquent federal income tax, remember?

How many of those initiatives can you name?
I'm not assigning blame. I'm doing MATH. Example. The top 50% pay 97% of federal income tax. With just math, I can tell you with absolute accuracy, that the top 50% owes the bulk of delinquent taxes. You're trying to hate the rich, I'm doing basic algebra.

#16 | Posted by MUSTANG at 2019-11-15 01:54 PM | Reply

"Are they just assuming it to be true or is there a citation for that?"

They have the math.

"This is about delinquent federal income tax, remember?"

No, it's about payroll taxes, too.

"With just math, I can tell you with absolute accuracy, that the top 50% owes the bulk of delinquent taxes."

I've already said that. But the poor get the majority of the audits. Did you do THAT PART of the math, or did you avoid it because it proved you wrong?

"I'm not assigning blame"

Well you should, if you're going to complain 50% don't pay income taxes, after voting for the folks who with 5 initiatives, jacked the percentage up to ~50%. Again, let's get this out in the open: how many of the five initiatives can you name?

#17 | Posted by Danforth at 2019-11-15 02:01 PM | Reply

easy problem to fix...

just give audits to the highest bidder public cpa's and let them do the work.

they keep 10 percent of everything they find....

problem solved and you just invented a new industry...

#18 | Posted by Pegasus at 2019-11-15 02:25 PM | Reply

18

That's probably been discussed. Contracting out auditing by private firms that bid for the work.

#19 | Posted by eberly at 2019-11-15 02:40 PM | Reply

Perhaps this better illustrates how audits are distributed among the various income classes...

www.nerdwallet.com

#20 | Posted by eberly at 2019-11-15 02:43 PM | Reply

"Perhaps this better illustrates how audits are distributed among the various income classes..."

The nerdwallet link is the same as the propublica link above.

If folks multiply out the numbers, they'll see the poor get waaaaaay more audits than the rich.

#21 | Posted by Danforth at 2019-11-15 02:48 PM | Reply

If I make $10M a year, I have a 14.5% chance of being audited

If I make $25K a year, I have a .5% chance of being audited.

#22 | Posted by eberly at 2019-11-15 03:00 PM | Reply

"If I make $10M a year, I have a 14.5% chance of being audited. If I make $25K a year, I have a .5% chance of being audited. "

You're right.

Now multiply the number of people in each category by the audit percentage for that category to see how many are being audited, and tell me who gets the majority of audits.

#23 | Posted by Danforth at 2019-11-15 03:04 PM | Reply

tell me who gets the majority of audits.""

I know...it's basic math.

they also get more traffic tickets.

Do you want to see the wealthy audited more? The poor less?

if they rotate all folks making $10M or more and audit different folks each year....they can audit all of them every 7 years.

but it drops off quite a bit at lower levels.

What's been the results from audits based on their income level?

what % owe more, less, etc....?

#24 | Posted by eberly at 2019-11-15 03:11 PM | Reply

Here's a start to the math. Let's assume 230 million returns, since the most recent number was 238 million.

Under $25,000
230MM x .3747 = 83,835,000 filers in that category
83.835MM x .0071 = 595,000 audits

Meanwhile...

Over $10 Million
230MM x .0001 = 23,000 filers in that category
23K x .1452 = 3,340 audits

See where this is going?

#25 | Posted by Danforth at 2019-11-15 03:16 PM | Reply

"Do you want to see the wealthy audited more? The poor less?"

How about they get audited to the percentage of income they have? Instead, the county with the highest percentage of audits is one of the poorest in the country.

"what % owe more, less, etc....?"

Well, as someone put it earlier, 3% of audits result in refunds. I'm sure a sizable number got the no-change letter, but I'm just as sure over half ended up owing, in part because there's usually something hinckey when the algorithms kick out the return for audit.

#26 | Posted by Danforth at 2019-11-15 03:21 PM | Reply

"You're trying to hate the rich, I'm doing basic algebra."

I think we've found the problem: What you did wasn't algebra.

#27 | Posted by Danforth at 2019-11-15 03:22 PM | Reply

-Well, as someone put it earlier, 3% of audits result in refunds.

I can't find any data on that...I have no idea.

The IRS is auditing the poorest who receive the EITC disproportionately to the other classes.

Other than that, the more you make the higher the statistical chance you'll get audited. Seems right to me.

#28 | Posted by eberly at 2019-11-15 03:38 PM | Reply

"Other than that, the more you make the higher the statistical chance you'll get audited. Seems right to me."

Yes, but...that still leaves the vast, VAST majority of audits on the two poorest categories with taxable income.

#29 | Posted by Danforth at 2019-11-15 03:43 PM | Reply

Keep in mind, the cost of field audits are much higher than correspondence audits.

It's not an excuse but it does explain why the lower income folks are audited more....it's cheaper to audit them anyway.

I imagine it's been harder, politically, to support a larger and more invasive IRS.

#30 | Posted by eberly at 2019-11-15 04:12 PM | Reply

How about we simplify the tax code so you can file taxes on a post card... That ought to fix the problem. AmIRight?

But in all seriousness - simplify the tax code and this isn't an issue.

#31 | Posted by GalaxiePete at 2019-11-15 04:13 PM | Reply

Could this be why EITC recipients are audited more often?

"IRS estimates that between 21 percent to 26 percent of EITC claims are paid in error. Some of the errors are unintentional caused by the complexity of the law, but some of the claims are intentional disregard of the law. Here are the questions preparers frequently ask concerning fraud."

www.eitc.irs.gov

#32 | Posted by eberly at 2019-11-15 04:17 PM | Reply

"Again, let's get this out in the open: how many of the five initiatives can you name?"

And....he ran away.

#33 | Posted by Danforth at 2019-11-15 05:49 PM | Reply

"I imagine it's been harder, politically, to support a larger and more invasive IRS."

It's budget. They get less in real dollars than they did in 2011, despite hundreds of new tax laws in that time, each adding a greater burden on the service.

#34 | Posted by Danforth at 2019-11-15 05:51 PM | Reply

"Could this be why EITC recipients are audited more often?'

Absolutely. Plus, it's thousands of dollars a pop, and a sizable percentage of the taxpayers' annual income.

#35 | Posted by Danforth at 2019-11-15 06:27 PM | Reply

All I keep thinking is if anyone is like me, if you have wages and nothing to write off, obviously nothing to audit and sure a computer program laughs at mine and many other people...nothing there.

But, wasn't there a time when you didn't have to put the social number for your kids and the year it went into affect, thousands of kids disappeared?

Audits of poor people must be some really stupid and obvious lies. I have no compassion for poor people audits if they make false claims...or have crummy people doing their taxes. There are a lot of scammers in Feb to Apr and they close up shop. Idiots to use them

#36 | Posted by Petrous at 2019-11-16 10:52 AM | Reply

"All I keep thinking is if anyone is like me, if you have wages and nothing to write off, obviously nothing to audit and sure a computer program laughs at mine and many other people...nothing there."

You're right. In fact, the majority of the filers have simple, straightforward returns. I tell a lot of clients their likelihood of an audit is ZERO, because everything we're claiming is the exact same as the info the IRS already has waiting on you, all to be confirmed by your tax return.

"Wasn't there a time when you didn't have to put the social number for your kids and the year it went into affect, thousands of kids disappeared?"

Yes. Preparers joke that roughly 100,000 kids disappeared that day!

"Audits of poor people must be some really stupid and obvious lies"

True. But IRS algorithms are also written to snag odd ratios. EITC is the king of creating odd ratios, even if the taxpayer is telling the 100% truth.

#37 | Posted by Danforth at 2019-11-16 11:10 AM | Reply

IRS Admits They Can't Afford to Audit the Rich

I don't believe any of this BS.

#38 | Posted by PinchALoaf at 2019-11-16 03:01 PM | Reply

"I don't believe any of this BS."

Why not?
Exxon is rich.
Look how long they avoided paying the Exxon Valdez settlement.
It was like, as many years as you've been alive.

#39 | Posted by snoofy at 2019-11-16 03:03 PM | Reply

"I don't believe any of this BS."

The IRS Commissioner just admitted it. Which of those words don't you understand?

#40 | Posted by Danforth at 2019-11-16 03:11 PM | Reply

"I don't believe any of this BS."

The IRS Commissioner just admitted it. Which of those words don't you understand?

#40 | POSTED BY DANFORTH

Fake news obviously. We have to wait for Humpy to tell us what to believe.

#41 | Posted by donnerboy at 2019-11-16 03:14 PM | Reply

" I have no compassion for poor people audits if they make false claims...or have crummy people doing their taxes."

I bet!

Having no compassion is a common defect of most conservatives.

Why should you be any different?

Wait until we get to finally see Humpy's taxes.

We should revisit this issue then and see how much compassion you have for Humpy as he does the perp walk.

#42 | Posted by donnerboy at 2019-11-16 03:24 PM | Reply

The IRS Commissioner just admitted it. Which of those words don't you understand?

#40 | POSTED BY DANFORTH

The IRS can afford it.

You're smart, you should be questioning something that's so simple and basic.

#43 | Posted by PinchALoaf at 2019-11-16 03:30 PM | Reply

Fake news obviously. We have to wait for Humpy to tell us what to believe.

#41 | POSTED BY DONNERBOY AT 2019-11-16 03:14 PM | FLAG:

" I have no compassion for poor people audits if they make false claims...or have crummy people doing their taxes."
I bet!

Having no compassion is a common defect of most conservatives.

Why should you be any different?

Wait until we get to finally see Humpy's taxes.

We should revisit this issue then and see how much compassion you have for Humpy as he does the perp walk.

#42 | POSTED BY DONNERBOY

The IRS can afford to audit the rich -- I'm FOR GETTING Trump's tax returns, -------.

You numbnuts twist yourselves into knots because Trump broke your brains.

#44 | Posted by PinchALoaf at 2019-11-16 03:34 PM | Reply

"The IRS can afford it."

How about:
It would cost the IRS more money than the IRS would recoup, to do it.

You still want them to do it?

#45 | Posted by snoofy at 2019-11-16 04:05 PM | Reply

You numbnuts twist yourselves into knots because Trump broke your brains.

#44 | Posted by PinchALoaf

Rabid opposition to trump is the sign of a functioning brain.

Thinking repubs and dems both suck equally is the sign you need help.

#46 | Posted by SpeakSoftly at 2019-11-16 04:24 PM | Reply

I don't believe any of this BS.

#38 | Posted by PinchALoaf

You dont believe that repubs would intentionally weaken the agency which is in charge of taxes, the one thing repubs hate more than anything?

Do you also doubt that water is wet?

#47 | Posted by SpeakSoftly at 2019-11-16 04:25 PM | Reply

"The IRS can afford to audit the rich"

Spoken like someone who was never responsible for an institutional budget.

"You're smart, you should be questioning something that's so simple and basic."

I know the IRS is working with less real dollars than a decade ago, during a time of hundreds of new tax law changes, each of which require forms, training, technical insertion into the equation, and audit guides. Just to see if you understand how the macro dials work, would that be putting MORE pressure on the budget, or LESS pressure on the budget?

Now, let's pretend you're down to a budgetary choice: use the money to answer another 500,000 calls from individual taxpayers about their tax questions, or audit ten multi-multi-millionaires. Which route?

#48 | Posted by Danforth at 2019-11-16 04:30 PM | Reply

"Do you also doubt that water is wet?"

Lately, he's doubted that deflecting to The Whistleblower's identity isn't a desperate deflection by Trumpers.
So, yeah, something happened to this guy.

#49 | Posted by snoofy at 2019-11-16 04:38 PM | Reply

You dont believe that repubs would intentionally weaken the agency which is in charge of taxes, the one thing repubs hate more than anything?

Do you also doubt that water is wet?

#47 | POSTED BY SPEAKSOFTLY

Follow closely ...

The IRS answers to the Trump Administration.

Why?

Because Trump is president.

Follow closely ...

That, is, why, I, call, BS, on, the, IRS, saying, they, cannot, afford, to, audit, rich, douchebags.

#50 | Posted by PinchALoaf at 2019-11-16 04:39 PM | Reply

#50

Just admit you have no idea how institutional budgets work, because you've never worked on a budget bigger than your allowance.

#51 | Posted by Danforth at 2019-11-16 04:51 PM | Reply

Just admit you have no idea how institutional budgets work, because you've never worked on a budget bigger than your allowance.

#51 | POSTED BY DANFORTH

Ridiculous -- the IRS needs to do their jobs regardless who's in the Oval Office.

#52 | Posted by PinchALoaf at 2019-11-16 05:09 PM | Reply

#50 | Posted by PinchALoaf

So you think one famous rich liar claiming that he gets audited prove the IRS is aggressively auditing the rich?

You get dumber with every post.

#53 | Posted by SpeakSoftly at 2019-11-16 05:15 PM | Reply

"Ridiculous -- the IRS needs to do their jobs regardless who's in the Oval Office."

Buy a new Lexus. Here's $10,000.

See? You still don't know get how it works. Nor did you answer my question about a budgetary decision. Gee, I wonder why?

Either educate yourself, by reading what the Taxpayer Advocate has to say about the IRS budget challenges, or STFU. I'll even give you the link:
www.irs.gov

#54 | Posted by Danforth at 2019-11-16 05:17 PM | Reply

^know or get, not both

#55 | Posted by Danforth at 2019-11-16 05:18 PM | Reply

Dan, read it again. I have no compassion for poor people who make false claims.

Should I have compassion for lying on their returns? That has nothing to do with any political position.

I don't think the govt should be auditing to make a profit. Auditing is to keep the tax system honest.

If the gov't loses money ensuring we pay our taxes, what would happen if no audits were done?

If an audit results in a refund, that is great. That kind of honesty actually is good, or should the govt keep what they shouldnt?

#56 | Posted by Petrous at 2019-11-16 05:40 PM | Reply

Dan, read it again. I have no compassion for poor people who make false claims.

#56 | Posted by Petrous

But you have undying support for a rich con man who makes more false claims than anyone on earth.

#57 | Posted by SpeakSoftly at 2019-11-16 05:48 PM | Reply

Either educate yourself, by reading what the Taxpayer Advocate has to say about the IRS budget challenges, or STFU. I'll even give you the link:

#54 | POSTED BY DANFORTH

I got your link right here ... thoughtcatalog.files.wordpress.com

I can't respect your --------, not one iota.

You're the typical Democrat from the professional class that Thomas Frank talks about, and why Democrats lose and why Democrats can't their ---- together ...

It's called "Meritocracy", and it's the mistaken belief that one must be professionally credentialed or academically titled to have a valid or even a strong opinion of any given topic.

I don't need to be a bean-counting accountant with detailed nuts-and-bolts knowledge of the process to know that the IRS has the ability to audit rich tax-dodging douchebags.

#58 | Posted by PinchALoaf at 2019-11-16 05:53 PM | Reply

"I don't think the govt should be auditing to make a profit."

That's stupid. They're auditing where they believe they can realize money. They're not going to dispute a $4 entry on a Schedule C, or even a $74 entry; that's not where the money is. But when I entered $45,934 as a mileage deduction one year, I told the gal immediately she'd be audited. She was. And she had perfect proof for every one of her nearly 90,000 business miles.

"Should I have compassion for lying on their returns?"

Not if purposely, but there are some idiot tax preparers out there. Some unscrupulous ones, too.

"If the gov't loses money ensuring we pay our taxes..."

They don't. Study after study shows increasing the IRS's enforcement budget increases income to the Treasury.

"what would happen if no audits were done?"

Same thing if the police disbanded.

#59 | Posted by Danforth at 2019-11-16 05:54 PM | Reply

So you think one famous rich liar claiming that he gets audited prove the IRS is aggressively auditing the rich?

You get dumber with every post.

#53 | POSTED BY SPEAKSOFTLY

Follow closely ...

No -- I DON'T think auditing Trump proves rich tax-dodging douchebags are getting audited because I NEVER SAID THAT.

#60 | Posted by PinchALoaf at 2019-11-16 05:57 PM | Reply

"I don't need to be a bean-counting accountant with detailed nuts-and-bolts knowledge of the process to know that the IRS has the ability to audit rich tax-dodging douchebags"

Clearly, you do. Especially since you haven't been able to answer my most basic of questions about budgeting.

But I get what you're really saying: The next time mom & dad raise your allowance will be the biggest budget you've ever had.

#61 | Posted by Danforth at 2019-11-16 05:58 PM | Reply

"I can't respect your --------, not one iota.'

Then we're even. I can't respect your stupidity, nor your refusal to educate yourself.

#62 | Posted by Danforth at 2019-11-16 05:59 PM | Reply

"I got your link right here ... thoughtcatalog.files.wordpress.com"

No, I was looking for proof you were educating yourself, not a self-portrait.

#63 | Posted by Danforth at 2019-11-16 06:07 PM | Reply

Auditing trump will just determine if more taxes are owed, he overpaid, or nothing changes.

Mistakes/errors on returns isnt a criminal offense and how many of us can look at one and say a crime was committed? I doubt he does his own return like me.

If looking at one, like all the prior presidents excites you, have at it.

In my State, we elect State Legislators with liens against them by our own State tax govt. Appears even owing money isnt enough an issue.

#64 | Posted by Petrous at 2019-11-16 07:01 PM | Reply

57, prove it

#65 | Posted by Petrous at 2019-11-16 07:02 PM | Reply

"Mistakes/errors on returns isnt a criminal offense"

Nonsense. Underreporting income by over 25% is tax fraud. Do you know what happens with tax fraud? I'll give you a hint: it involves stripes.

"how many of us can look at one and say a crime was committed?"

All the trained ones, who know how to read a tax return, and can compute 25%.

#66 | Posted by Danforth at 2019-11-16 08:35 PM | Reply

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