I am sure this will thrill many of you.

The IRS is getting audited.

Yes, you read that correctly.   But, it’s not quite the turnaround many of you would want.  This is more related to one of my frequent bitches about the IRS.

The IRS tends to slice down hard on the lower class and, to some degree, the middle class. But, when it comes to the 1% and multinational companies, the IRS barely employs a butter knife.

It’s related to the fact that those with fewer assets have lesser ability to hire proper representation to fight the IRS.  So, they roll over and pay almost whatever the IRS demands.  (I’ve railed about this for years; here’s but one example.)

Those with more assets already have proper representation (see why you need to be using our services????) and will fight the IRS tooth and nail.  So, in the end, the IRS will rarely collect pennies on the dollar from them- or have the case drag on for years, without seeing a penny.

Given the fact that the IRS has been strangled by the GOP for more than a decade (as revenge for the supposed plot to audit their dark money committees, claiming to be non-profits; the fact is the IRS went after BOTH parties’ shenanigans with equal zealotry), the IRS currently sits with fewer employees than the employed a decade ago (83265 now v. 94000 in 2011)- of which more than 90% are over the age of 30.

Obviously, with the augmented numbers of individual taxpayer returns and more business returns, that fact alone would render the IRS impotent against the onslaught.  Add on the need to issue Advanced Child Tax Credits, Stimulus Payments, and the like, it’s not surprising the IRS was overwhelmed.  And, that’s also why the IRS avoids the long fights with the rich and the powerful- after all, quick wins means their teams are not bogged down in the trenches.

But, what TIGTA (the US Treasury Inspector General for Tax Administration) has brought a more insidious fact to light.   It’s the revolving door between the accounting industry and the IRS- and with big business CFO and the IRS.  Which means special deals are probably being cut to enhance the value of individuals jumping ship- and not to benefit the US Treasury.   (Yeah, we all know there are laws against that- but they are probably as well enforced as they are against the multitudes of Presidential appointees that manage to find themselves in lobbying entities and the like, once they cease their tenure.)

TIGTA also takes umbrage at the multitude of whistleblower cases that languish within the IRS- as well as the numbers that have been squashed with no action.  Not to mention TIGTA’s desire to have the IRS use Congressional authorizations (i.e., tools) that can eradicate abusive tax practices- in particular, the ones businesses employ that have no economic value other than their ability to slash their tax bills.

(Do you know that there is- at least on the books- a 40% penalty imposable on businesses that employ transactions that lack economic substance?  And, that’s a strict liability penalty- meaning the IRS can’t waive or diminish it.  Yeah, I haven’t seen that one used on multinationals, either.  Despite the fact that the Joint Committee on Taxation projected that $ 4.5 billion in penalties alone- not including the taxes- over a decade!  And, that’s probably low- because when the GOP was attempting to dismantle the ACA [Obamacare] in 2015, they were also including the eradication of the Economic Substance Doctrine (because that is so related to health care).  Except the cost for that repeal was noted at $ 5.8 billion over a decade.)

This is going to be an audit that I, personally, will relish.

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