Investor's Business Daily
Senator William Roth
April 14, 1999
The following are some quotes from an article in Investor’s Business Daily, page A-24, April 14, 1999, "Fighting The Power To Destroy," by Sen. William Roth. The article was not posted on IBD’s web page, but I thought it important enough to present a portion of it here:
". . . the IRS is shrouded beneath a cloak of secrecy that puts even the Central Intelligence Agency to shame. Section 6103 of the tax code, originally intended to protect sensitive taxpayer information, has been strengthened and stretched to the point that it can be used by IRS employees to cover their activities and mistakes. Historically, Congress and oversight agencies have not been able to get adequate information to monitor and investigate abuses within the system.
"Using section 6103, agency managers – 15% in one survey – admit to having observed instances of lying, deception or deliberate concealment of information from government audit agencies, while 3 out of 4 IRS managers responded that they believe they are entitled to deceive or lie while testifying before Congress.
"Only the chairman of the Senate Finance Committee and the House Ways and Means Committee have the authority under section 6103 to penetrate the veil of secrecy and investigate the agency. But until 1997, this authority had never been used.
. . . "Almost every examiner we interviewed told us that they were taught to assume that taxpayers were hiding something and that ‘all entrepreneurs, especially small businessmen and -women, are tax cheats.’
"One examiner said, ‘We were taught to assume beforehand that all returns had something wrong with them'..."
Senator William Roth, R-DE, is Chairman of the Senate Finance Committee and co-author of "Power to Destroy" (Atlantic Monthly Press, 1999).
IRS Taxpayer Abuse: Views From The Inside
IRS Agent: Some Evidence Falsified
ABC News
ABCNEWS Correspondent Jackie Judd
March 1, 1999
W A S H I N G T O N, March 1 - Just as millions of Americans struggle to meet the strict reporting standards set by the Internal Revenue Service, the tax-collecting agency itself has failed a federal audit.
The General Accounting Office today slammed the IRS for poor bookkeeping, paying out fraudulent refunds and leaving holes in computer security that may let outsiders ``access, alter or abuse'' taxpayer information.
Most significantly, the amount of money the IRS has failed to collect has reached a whopping $222 billion dollars - the same amount of money we spend every year on Medicare.
Most of it will never be collected, because it is owed by either bankrupt companies, failed savings and loans, individuals who are missing, or dead - or just plain deadbeats.
Congressman Blasts IRS
The litany of IRS failures was aired at a hearing today on Capitol Hill, drawing sharp criticism from lawmakers.
"I think the stockholders, the taxpayers, have every reason to demand a dramatic and immediate change and that includes debt collection," said Rep. Steve Horn, R-Calif., chairman of the government management subcommittee.
Debt collection was not the only problem found by the GAO. The IRS essentially failed the same sort of audit it forces upon taxpayers.
"Think of this as not balancing your monthly checkbook to the monthly bank statement," said GAO auditor Gregory Kutz, "and at the same time having a record-keeping system that was prone to error."
Shoddy Filing System
In some cases, the GAO said, the IRS had no record-keeping system at all. The IRS could not provide a list of what it owed outside vendors - such as utility companies that supply power to field offices.
Also, the IRS lost track of its own property. While some items may have been lost to theft, others simply could not be accounted for.
"We noted a missing Chevy Blazer, laptop computer and $300,000 printer," Kutz told lawmakers. "At one IRS field office, 19 of 130 computer assets over $50,000 each could not be located."
The IRS blamed antiquated computer systems for many of the snafus and asked for the same thing that many anxious taxpayers want: more time to fix the problem.
NewsMax
By Paul Craig Roberts
January 14, 1999
If President Bill Clinton were being tried by the U.S. 10th Circuit Court of Appeals, he would be home free.
In a horrendous ruling devastating for justice, fair play and the rule of law, the 10th Circuit has ruled (9-to-3) that the laws of the United States do not apply to officers and agents of the government unless Congress specifically designates that the law applies to the government.
"Statutes of general purport do not apply to the United States unless Congress makes the application clear and indisputable," says the court, citing a 1873 case that "it is a familiar principle that the King is not bound by any act of Parliament unless he be named therein by special and particular words."
At dispute in the case, Singleton v. U.S., is the federal statute that specifies punishment for "whoever" promises anything of value to a witness in exchange for testimony for or against another person. Under the normal reading of the statute, prosecutors who promise defendants reduced sentences in exchange for testimony against others are violating the prohibition.
According to the majority opinion, federal prosecutors are not bound by the law against bribing witnesses, because they serve as alter ego for the government and "the word 'whoever' connotes a being," whereas "the U.S. is an inanimate entity, not a being. The word 'whatever' is used commonly to refer to an inanimate object. Therefore, construing 'whoever' to include the government is semantically anomalous."
In other words, "whoever" doesn't mean "whoever" if the "whoever" is an officer of the government. This Clintonesque word-play is necessary because, as the court acknowledges, "no practice is more ingrained in our criminal justice system" than convicting people with purchased testimony. Faced with an emptying of the prisons, the court ruled that the U.S. government is not a government accountable to law, but a "sovereign" above the law.
Prosecutors have found that it is far easier to purchase with leniency the testimony of accomplices against their confederates than to build a case against the confederates. When this practice began it was aimed at known criminals against whom evidence was lacking. But once the practice began, it has taken on a life of its own.
Today many innocents are ensnared by untrue accusations from criminal defendants seeking reduced charges by producing more fodder for prosecutors. Less and less does the criminal justice system work by police investigating a known crime and building a case. All too often, the first knowledge of the "crime" occurs when a defendant seeking reduced charges accuses others. In these cases, the accusation is the sole "evidence" of the crime, and prosecutors, who serve career instead of justice, are increasingly destroying innocents with purchased testimony.
A recent example is Khem Batra of Burke, Va. Mr. Batra, married with two children, came to the U.S. in 1974 from New Delhi, India. He has been a U.S. citizen since 1981 and was successfully operating his own travel agency. His troubles began when the husband of one of his employees approached him for loans to enable him to purchase distressed properties at auction. Soon Mr. Batra found himself in partnership, pooling money to bid on properties.
Unbeknownst to Mr. Batra, his sometime partner was illegally obtaining multiple mortgages on the same property. When the partner was apprehended, instead of being indicted, he was wired and promised leniency in exchange for implicating others. The partner managed to implicate some mortgage companies in technical infractions and apparently made an unsuccessful attempt to implicate the Burke and Herbert Bank in Alexandria, Va.
Mr. Batra was never implicated in the illegal financing schemes, but his partner, desperate to earn his leniency, testified that his money-pooling partnership with Mr. Batra was a conspiracy to under-bid the properties. On the basis of his partner's plea-bargained testimony, Mr. Batra was convicted in federal court of one count of violating the Sherman Anti-trust Act.
It is a definite sign of prosecutorial abuse when the Sherman Anti-trust Act, designed to bust up large monopolies, is applied to a small-time local partnership speculating in distressed properties sold at auctions where Mr. Batra and his partner comprised one of many bidders.
Such a dubious interpretation of the anti-trust statute shows an extraordinary determination to convict. But justice is forfeited when, in addition, the conviction is obtained solely through the purchased testimony of a defendant who committed a real crime and is seeking to reduce his charges.
Until the Glorious Revolution when Parliament established the supremacy of law over the sovereign, kings dealt with enemies by bribing or compelling witnesses to testify against them. Once law and not the king's government was supreme, Matthew Hale established the maxim that testimony purchased with reward has no standing in court.
It is an abomination that the 10th Circuit has enabled unscrupulous prosecutors to resurrect the ancient practice of convicting defendants with paid testimony.
COPYRIGHT 1999 PAUL CRAIG ROBERTS DISTRIBUTED BY CREATORS SYNDICATE, INC.
TownHall.com
By Mark Tapscott
January 25, 2002
Would you cross a minefield wearing a blindfold? Congress does every time it makes decisions about the economy, yet most senators and representatives don’t even know it.
If that sounds hard to believe, come with me now to the inner sanctum of government decision making and let me show you one of Uncle Sam’s dirty little secrets. Officially, it’s called “scoring” but it would be more truthful to refer to it as “fortune telling.” They do it behind closed doors on Capitol Hill and in the federal bureaucracy.
Whenever Congress considers a tax bill, federal law requires that the proposal first be considered by the Joint Committee on Taxation, which includes members of the Senate and House. Though little known outside the Beltway, the JCT is one of the most influential committees of Congress.
Before the JCT votes, its staff analyzes tax proposals to determine their likely impact on federal revenues. This process can be done using either of two rather arcane methods known as "static" and “dynamic” scoring. Many state and local governments, as well as the private sector, use dynamic scoring to estimate things like how much future pensions will cost. Most economists prefer dynamic scoring because it measures economic trends over time in response to changes in the incentive structure created by government tax and spending policies. Policymakers thus get a more accurate body of facts on which to make vital decisions like how much you and I should pay in taxes.
Now, here’s the dirty little secret – the JCT insists on using the static scoring method, even though there is growing professional, corporate, academic and political support for using dynamic scoring instead. In fact, all of the federal government’s tax scoring groups, including the Congressional Budget Office and the U.S. Treasury’s Office of Tax Analysis, doggedly stick with static scoring.
Why? Because static scoring is a key tool Washington politicians use to keep taxes high and government spending growing. Tax cut proposals are especially hard-hit because static scoring always shows the government will “lose” revenue if your taxes are cut. How government can lose money it never owned is beyond me, but that’s a topic for another day.
The Washington politicians also love static scoring because it tells them little or nothing about how many new jobs would be created by a tax cut proposal, how much individual incomes would increase or whether welfare costs would go down. With static scoring, the only issue that counts is how much revenue would the government lose?
Remember the proposal last year to eliminate the estate tax? Most Americans support killing the “death tax” but the proposal died after the JCT said it would cost the government more than $660 billion in tax revenues over the next decade. That’s roughly twice as much revenue as the estate tax generated in the first place! What made this episode even more galling is that JCT refused to make public its methodology, saying only that its estimate “included significant revenue effects that result from a variety of income tax avoidance opportunities made possible with the repeal of the estate and gift tax.” Since only the JCT staff knew how it did its work, nothing like the “peer review” routinely allowed by academic and corporate economists could be done.
Put another way, every time somebody in Congress or the White House proposes a tax cut, the JCT goes to work and out come those blindfolds. And more often than not, there goes any chance that you and I will get to keep more of our money to spend on what we need instead of Congress spending it the way the politicians want.
The solution here, as it is in so much of government, is to rip off those blindfolds and let the light shine on this dark secret. Let the public see how the system works. Let the experts outside of government do peer review studies on those inside government. That’s part of what “government of the people, by the people and for the people” is all about.
By the way, when was the last time your local newspaper wrote about this egregious example of the public’s business being done behind closed doors?
Audit Reveals Congressional Criminality, Gross Waste, Fraud, and Mismanagement
Vast Criminal Conspiracy - The Congress
"The 535 men and women who make up the House and Senate of the United States include, at best, a collection of rogues, con artists, scofflaws and bad check artists. At worst, they comprise, as Twain once observed, a distinct criminal class."