Are you referring to my comment that I can make the case for a more intrusive agency under the Flat Tax than the present system?
Keep in mind that I am talking only about personal income taxes here. Corporate taxes are a different discussion.
It is actually quite easy: Under the present system, each taxpayer has to present paper evidence (supporting forms, etc.) to the IRS that his/her income and deductions are legitimate. IRS balances the taxpayer claims based on paperwork submitted, and has at least “some backup” upon which to base “audit” or “no audit” decisions.
Under the Flat Tax, as it has been discussed for years, i.e., a post card return, each taxpayer would assert his/her income and deductions on the card, and would not have to show backup paperwork.
BTW, the largest area of FRaud in the present system is in the Earned Income Tax Credit area. People who claim the EITC merely assert their income and their dependents, and are sent a check.
Flat Tax will work in the same manner, and I hereby assert that it will be riven through and through with massive FRaud! For the same reason: there is no way to check the taxpayer’s EITC claim without an audit. It is my understanding that IRS does not habitually audit folks who claim the EITC. Do you agree that EITC is riven with FRaud?
Since the IRS figures that each of us lies on our tax returns, I can easily visualize the IRS screaming for more auditors and audit authority under the Flat Tax.
Ergo, IRS will become a more intrusive agency.
You certainly have a much more intimate knowledge of IRS practices and procedures than I. I’d appreciate your criticism of my argument.
Now for the fun part: Do you agree that CPAs will earn more income, be happier and have a better sex life with the FairTax in place?