Friday, February 05, 2010

New tax cuts: The IRS's unofficial gift to America

This week, our local hometown newspaper's main headlines read, "Berkeley Daily Planet Hit by Massive Payroll Fraud". Our poor sweet Planet is already suffering from all the usual financial troubles that currently plague America's newsprint industry, plus it has also endured many threats to its advertisers from Israeli neo-con supporters because of the paper's free-speech position regarding Israel-Palestine. And now there's this latest financial assault on it.

Apparently, the BDP's payroll management contractor, Clickbooks, has absconded with its income tax withholding deposits (and about 100 other local small businesses' deposits as well), and then its owners skipped off to parts unknown. "A round of inquiries to the tax agencies produced the bad news: Clickbooks had been cashing our checks, all right, but they had been significantly underpaying the taxes and pocketing the difference. We are now engaged in the painful process of trying to figure out how much we still owe the various government tax collectors."

But while that unwelcome news sucks eggs bigtime for the Planet, there was also something mentioned in this article that gave me several interesting insights into the IRS. According to the BDP editor Becky O'Malley, "It seems that in all the cases I investigated, the IRS had simply not noticed, for periods of up to two years, that the payment amounts they’d gotten from Clickbooks didn’t match the reports of what was supposed to have been sent...."

But WHY did the IRS drop the ball? According to O'Malley, "It turns out that during the Bush years the number of IRS agents took a dramatic dive, and now there don’t seem to be enough of them in the agency to collect all the money owed.... [T]he difference between what is owed in taxes and what is paid, amounted to over $300 billion annually.... For comparison purposes, that much money would pay for two more wars as large as our two current ruinously expensive ones, plus covering all of the cost of the president’s currently unfunded health care plan. Dramatic evidence about why this gap exists is the decrease between 1995 and 2006 in the total number of IRS employees, down 18 percent, and in the number of IRS employees who perform audits, down by 30 and 40 percent in crucial categories."

Good grief! It looks like no one is minding the store at the IRS!

With April 15 already coming down on us so fast, this news is really HOT. Why? Because it indicates that the chances of American taxpayers actually getting away with one of this country's most popular gambling passions -- seeing how much one can shave off one's taxes and still not get caught -- is now a lot less of an extreme sport than it used to be. The odds are apparently no longer stacked in favor of the house. Your chances of being audited by the IRS have just been reduced by 30 to 40 percent!

Has the IRS just given America an unofficial tax break? If you are a gambler and like the new odds in your favor, it certainly looks that way.

But, according to the Planet article, all this firing of IRS agents took place while GWB was in the White House or when Bill Clinton was president -- so you can't blame this particular tax break on Obama.

PS: Speaking of federal agencies not minding the store, according to some recent U.S. House of Representatives Committee on Homeland Security hearings, the "Underwear Bomber" was deliberately allowed onto Flight 253 on Christmas Day so that he might lead the feds to bigger fish. So. Apparently the Underwear Bomber was being deliberately allowed to blow up a plane so that various unnamed higher-ups in DC could have an excuse to invade Yemen? Hmmm.

Here's a link to a videotape of the hearing, courtesy of Mike Malloy: Listen to it yourself. About 30 minutes into the tape, Patrick F. Kennedy from the U.S. State Department testifies that, "We came across this person's name and were going to revoke his visa and someone came to us -- I can tell you in private who it was -- and said, 'Please do not revoke this visa. In order to break a potentially larger plot, it is of higher value for us to follow [this dude]'." And to be able to watch and see who reacts when flight 253 is blown up?

PPS: Someone I know just e-mailed me that I was losing my "credibility" by referring to the "Bush-Obama Administration". And he is right. What I should have actually referred to was, "The Johnson-Nixon-Reagan-Bush-Clinton-Bush-Obama Administration". My bad.

However. If we ever finally get an administration in Washington that actually protects the working class people who elected it -- and if this fantasy administration actually stands up and declares that a corporation is NOT a person like you and me after all, I will seriously reconsider my position on this matter. But don't hold your breath waiting for that to happen any time soon.

PPPS: Here's a video of me trying to explain about the IRS and the Underwear Bomber while trying to multi-task -- and not doing a very good job of any of it. But you get to see what my messy apartment looks like: