Posted on 07/17/2002 7:21:20 AM PDT by wcdukenfield
We knew the Internal Revenue Service’s tax-collection arsenal included, among other things, the legal right to audit, sue and penalize tax cheats. But until last week we didn’t know the agency had license to gratuitously humiliate innocent taxpayers in the process.
On Friday, the Journal reported on page one that the IRS has disclosed the names of hundreds of citizens engaged in what amounts to tax planning. These individuals—many of them prominent businessmen—are accused of no wrongdoing. Their only sin is that they are clients of KPMG, the accounting firm currently doing battle in court with the IRS.
Last week the Justice Department sued KPMG on behalf of the IRS. The government alleged that some of KPMG’s tax shelters are illegal and requested the names of clients who had inquired about them. The accounting firm complied, providing the names in a so-called “privilege log” to protect their identities. The IRS promptly went public with the names, blithely smearing the reputations of innocent third-party individuals in an effort to strong-arm its court opponent and embarrass its clients.
This is a dangerous and outrageous precedent. To begin with, not all tax shelters are illegal, and a court has to rule on the ones in question. Nor is it against the law to minimize one’s tax burden. In fact it’s common sense, and private citizens shouldn’t be smeared in government press releases or news leaks for trying.
But the real potential damage here is to the assumption of privacy among taxpayers. Our tax system works because people are willing to disclose highly confidential information regarding investments, charitable contributions, estate planning and so on. That willingness is linked inextricably with an understanding that these disclosures will be kept secret. Keeping, this confidence encourages compliance. Abusing it in the manner of the IRS’s KPMG disclosures can only have the opposite effect. “This is unprecedented and it’s fundamentally wrong,” says Kathryn Keneally, a tax expert at the American Bar Association.
Section 6103 of the tax code is the basic provision that protects the privacy of tax returns. And in the past, the IRS has interpreted 6103 as “broadly inclusive” and “sweeping in nature.” When groups like the Landmark Legal Foundation and even Members of Congress have sought the identities of tax-exempt organizations or audit targets, the IRS has argued that it was duty-bound to protect taxpayer identities.
But protecting privacy apparently is no longer a concern when the IRS is a plaintiff. These days, the agency would have us believe that publicly shaming a target’s clients is fair game in establishing a case against the target.
Tax experts are debating whether the IRS disclosures are in fact illegal, but Donald Alexander, a former IRS commissioner, says it doesn’t matter. “Even if releasing these names is permissible under law, it’s still inadvisable,” says Mr. Alexander. “You do not release names of individuals to the public unless there’s an overwhelming reason to do so, and I find that reason lacking here.”
The IRS has also left itself naked to charges of political partisanship. Justice’s lead litigator on this matter is Stuart Gibson, a well-known Democratic activist in Virginia. Among the names disclosed last week was William Simon Jr., a Republican who happens to be in the middle of a gubernatorial race in California. Mr. Simon’s opponent, Democrat Governor Gray Davis, immediately pounced on the disclosure. A major Bush campaign contributor and a recently appointed U.S. ambassador also were sideswiped. Respecting the confidentiality of tax returns is a good way to avoid the appearance of political bias.
Not long ago, Congress was curtailing IRS abuses. Perhaps post-Enron, the tax man feels as if he can once again get away with anything, even harassing honest Americans. The agency falls under the purview of Treasury Secretary Paul O’Neill and clearly needs adult supervision. He might start by firing or sending to Siberia whoever was responsible for this abuse of government power.
I hope you succeed.
If your party had nominated someone who carried the torch, or had insisted that GWB do so, the cause would be much further along, maybe even on the precipice. As it is, your last twenty years will probably turn into twenty more. I don't have that kind of time. It's like telling a slave to be patient.
I tried.
...or had insisted that GWB do so, the cause would be much further along, maybe even on the precipice.
Many of us have. The FairTax is now the tax plank of a number of state's GOP platforms.
As it is, your last twenty years will probably turn into twenty more. I don't have that kind of time. It's like telling a slave to be patient.
OK, genius, tell us your wonderful plan for getting there quicker.
If you are a slave, why are you critical of the only group of people in the land who are trying to open the prison door?
I'm tired of flame wars. Be civil or shove it.
Calling me a "genius" while I give you my comments isn't civil where I come from.
And sending for re-inforcements doesn't give me confidence that you intend to engage in meaningful exchange.
I've been in enough flame wars to see it coming. Like I said, I'm tired of it. Chat with whomever you just sent for.
Actually, I think it tells volumes about him. I don't envy anything of his. But if I were in financial trouble, and my wife were dying of cancer, I wouldn't waste what money I had on country club dues. Priorities are important in life.
A man DESERVES to lose his home, his wife, and his life because he tried to keep his own property.
He intentionally broke the law. Not to make a political point, but merely because he was a short-sighted idiot.
That's right. No Conservative could possibly oppose a national sales tax. Get a life, buddy. And use it to take a few courses in economics.
The penalty for being a short sighted idiot is death. Face it, he screwed you out of $200 large and you are bitter. Maybe the only short sighted idiot is the one who lends someone that kind of money. I hope you don't kill yourself over it even if you are happy he did.
Now please return to wherever you were posting this BS before a week ago.
I forgot more about economics than you will ever know.
As far as the national sales tax is concerned, talk to Mr. Eternal Vigilance, he's looking for a flame war. Have fun.
And humble too...
Don't be so sensitive.
I'm asking you for a sensible alternative to the repeal of the Sixteenth Amendment by any other means than rallying Republicans to that cause.
If you don't have one, tell me, instead of acting like I called your mother names.
More flame bait. Whatsamatta? No one wants to fight with you?
You didn't call my mother names, you called me names. You want to engage me in dialogue, you admit to your rudness and we start over. If not, go flame with someone else.
If this is the question you are referring to, I will point out that I never said your approach was wrong. My statement was merely that the Republican Party was not a champion of the cause you push.
I wished you well in your efforts in fact. I think you have a long row to hoe with that approach, but I wish you well in that regard.
I disagree with this statement however;
If you are a slave, why are you critical of the only group of people in the land who are trying to open the prison door?
The "ONLY" group is what I take issue with. Many other groups are working to change the current mode of theft. YOU are not the Republican party, and YOU have been working to change them. That fact alone belies the premise. Other political parties and think tanks and citizens groups are also working toward it.
My last post of the day, I have to go. We can continue later if necessary. Good day
Ronald Reagan is a fine example only of a Mount Rushmore candidate. Complain if you will about this policy or that of a given candidate, but please don't attempt to persuade me that voting for a candidate inferior to Reagan is somehow wrong or stupid. Becase you and I aren't likely to live long enough to see a better president of the United States than he. Never mind Governor, granted that the governorship of CA gets you mentioned for the presidential nomination pretty quick.And if it comes to that, if Simon can make Davis the issue and win, why should he give Davis an opening by giving journalism something else to chew on? Doesn't mean he doesn't favor low tax burdens; any Republican who has looked into tax shelters probably does.
Hypocrisy comes in when a liberal condemns "tax shelters" while actually exploiting them in his private life. And that is pretty likely the case with Governor Davis. I am correct, am I not, that Davis' own tax returns are not public? I wonder why, don't you!
My first question is: Why does Stuart Gibson, a well-known Democratic activist in Virginia, still have a job?
[And a corollary question: Why does ANY Clinton holdover still have a Federal job? GWB could reinvigorate the conservative electorate just by firing every Democrat holdover from their Federal job -- if I were President, that is the first thing I would have done, on Day One! Those people spend every waking hour just trying to destroy the Bush Presidency and the USA -- and WE, THE POOR AMERICAN TAXPAYERS are paying them big bux to do it!]
My second question is: Why are the American people (Sheeple?) so ready, willing and able to put up with the progressive income tax and the IRS?
Both the nature of the tax and the nature of the agency are diametrically opposed to what the concept of "America" is all about.
HST, EV is correct: Though we have striven mightily to make the issue of fundamental tax reform a bi-partisan (or non-partisan) issue, the facts are that the Democrat Party does not wish to abolish the income tax or the IRS.
That is not to say that the Republican Party is in a hellofa hurry to do it either, but there are more Senators and Representatives in the Republican Party who are willing to work with us than there are Democrats.
It took the Liberal/Socialist/Marxist Bastards 18 years to pass the 16th Amendment to the U.S. Constitution (1895 - 1913). It will take us that long to repeal it, and we have been working on the issue seriously since 1991. Do the math -- 1991 + 18 = 2009.
I personally think we can do it sooner, but only if those of you out there who really care about America get off your butts and help us.
“I have sworn upon the altar of God eternal hostility against every form of tyranny over the mind of man.” [Thomas Jefferson, letter to Benjamin Rush, 1800.]
Scrap the Code! Scrap the IRS! Abolish the VLWC!
We will never be a truly FRee people so long as we have the income tax and the IRS.
Click here to help us scrap the Code, scrap the IRS and abolish the VLWC!
You can also click here to find out how to help us replace the income tax with a National Retail Sales Tax and abolish the IRS!
We will never be a truly FRee people so long as we have the income tax and the IRS.
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