States Link Databases to Find Tax Cheats 726
The IRS and state revenue agencies are increasingly linking every database they can get to their tax records to find clues about your finances.
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States Link Databases to Find Tax Cheats
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Nothing is finished until the paperwork is done.
Re:Get a national sales tax already (Score:4, Informative)
Considering the items are illegal, I wonder how the government plans to actually tax them.
They won't. But they will tax the spending of the proceeds of an illegal activity.
If I sell half a kilo of cocaine on the street, the government gets nothing. When I go to spend my ill gotten gains on a 72" Plasma TV set and an enormous diamond for my girl, then they get all the tax on those.
Besides, aren't illegal activities already theoretically taxable anyway? Wasn't that Al Capone's problem?
Re:Another way to accomplish this... (Score:3, Informative)
I believe that already happens - it's how the Social Security Admin gets your salary history for benefit calculations.
Most tax cheating comes from lying about cash income - businesses like bars etc. that do most of their business in cash, or claims for deductions that aren't real.
Re:Catching tax cheats... (Score:1, Informative)
What? This was a troll? Of course, how stupid of me.
Office of Revenue Opportunities (Score:5, Informative)
Case in point: I bought a plane one time, a 1979 Cessna 172, around $40,000. There's exceptions to the use tax law that says if the plane is used for flight instruction, it's exempt from use tax. Well, a few years after my purchase, I received a bill from the state of Texas, somewhere in the vicinity of $5000 (including penalties), along with a threat to put a lien on the aircraft if I didn't pay up. It took several months, copies of my logbooks, certifications from instructors, etc. to finally get the state off my back. (I say that, but I've never been sure if that's the case -- the state simply stopped pursuing me without actually telling me I was in the right.)
The point here is that "data aggregation" will inevitably lead to erroneous assumptions, especially when disparate records are linked together. Unfortunately, the burden of proof will lie with the target to prove they *don't* owe a tax. I can see it now: Driving a lonely stretch of interstate late at night in the middle of nowhere, stopped by a hick sheriff who tells you you'll be spending the night in jail because DMV records indicate you didn't pay sales taxes on all that on-line stuff you've bought over the years.
This is dangerous stuff, and one of the very few areas I believe Congress needs to intervene in to prevent abuse of data that was never meant to be aggregated, linked, and abused.
Re:Catching tax cheats... (Score:2, Informative)
Re:Privacy Issues (Score:1, Informative)
A few years ago, my state was setting up an E911 system which databased lots of extra information. People concerned about privacy objected, but they said it would result in better service in the case of an emergency, and promised the information gathered would only be used for E911, never used for anything else. Half a year later, there was a non-911 incident, the result being that all that information is now also available to the police.
Re:Catching tax cheats... (Score:3, Informative)
The problem is, the typical tax rates have always been upscaled to compensate for inflation, however the AMT's formula never has. Therefore, the AMT system that was designed to catch the "rich" is starting to bite into the "middle class".
There were also a lot of cases during the dot-com bubble where people got stock that was worth a lot of money as of the moment it was handed to them, however by the end of the year the company had gone to zero and disappeared. The AMT treats it as income at the moment they got it, even though most of these people didn't even have the chance to sell the stock until it had already taken a dive. The net result is that "paper multimilionaires" who never got to touch their money get hit with a seven-figure AMT bill... And taxes are one thing bankruptcy cannot make go away. These people are doomed to never be able to own anything in their own name again.
HOWTO: Avoiding use tax on imported items (Score:1, Informative)
There will always be a way around taxes, either fortunately or unfortunately, depending on which way you look at it. In some ways, I think high tech makes it easier to hide income. Certainly for those with million dollar plus incomes it should be easier. Having a bunch of corporations that buy and sell ownership of stuff that is never shipped, shares in each other, and so on can easily be manipulated to allow a US company to always lose money, while a foreign company that has no (known to the US government) connection to a US citizen has all the profits. You can't import that money, but having a 7 or 8 figure bank account I could only use overseas is a problem I'd love to have!
Re:Why a sales tax won't happen (Score:5, Informative)
To state the obvious -- no, it's harder on the poor because they're NOT charged different sales tax rates. A 15% tax on someone trying to live on $15K/year will cut into the basics -- food, minimal shelter, health care. A 15% tax on someone living on $150K/year will cut into the luxeries -- they can pay the tax and still afford enormously better food, housing and medical care than the person with $15K. And someone taking home $15M/year won't even notice the 15% tax -- the lifestyle differences between $15M/year and $12.75M/year are insignificant.
Not in the Great White North (Score:1, Informative)
It's a great time to not be an American.
eg:
DMCA
Patriot Act
Patriot Act 2
Echelon
RIAA
MPAA
Re:Want to solve the root problem? (Score:2, Informative)
Three problems with this idea:
1. People will be required to actually pay the sales tax before they get the refund. Thus the poverty and sub-poverty level people will go to zero or negative numbers BEFORE the refund shows up.
2. Variance in cost of living. A flat refund will cover a different percentage of actual living expenses based on regional variance. The cost to survive in Yuma, Arizona is very different from Los Angeles, California. So you compound the harsh effect of the "refund afterwards" plan by putting pressure on people to move to other areas.
3. The elimination of business/corporate tax simply shifts the burden. If we assume that only the end purchaser will pay the tax, how do we assure that the actual "end purchaser" is paying the tax? Corporations build inventory and individuals sometimes make custom projects (computers anyone?) for others. Who pays the tax if only the end of the line is supposed to pay it?
Lastly, where did you get the 20% idea? That's higher than Social Security (15%) and three steps up the progressive tax scale (10% & 15%). Is it equitable to increase the tax on all those with an Adjusted Gross Income of under 65,000? (for single tax payer, no dependants, the highest tax rate) Realize that this means increasing tax on at least 60% of US incomes while lowering it on the remaining 40% (as per US Census ( ferret.bls.census.gov/macro/032003/hhinc/new06_00
I've got nothing to hide but.... (Score:3, Informative)
....this is still the IRS of Richard Nixon (audits to punish people on different sides of political issues); FBI of J. Edgar Hoover (illegal wiretaps, illegal search and seizures, illegal survellience, and blackmail or important figures); FBI of Ruby Ridge, et al; and FISA courts of G. W. Bush (use of "national security" courts in violation of the laws surrounding their creation against US citizens in order to avoid producing evidence or allowing the defendent to confront the acuccuser). Oh, yes, and the Justice Department of the Bush Administration that likes suspending portions of the Bill of Rights because due process interferes with with the outcome (Patriot Act, etc.).
And in case you couldn't tell, this was intended to be flamebait just like Rush Limbaugh, Jay Severin, Sean Hannity, and that ex-one term Republican congressman from Florida "Sleepy" on MSNBC who looks like he needs some strong coffee and is asleep. Now, if I could only get some liberal flamebaiter like Al Franken on the radio, the noice would be a little more even.
Medicare 3% overhead, HMOs 20% (Score:3, Informative)
HMOs, in particular, have about 20% of their revenue going to non-medical expenses.
A lot of that money goes to pay people to hassle you or your doctor everytime you want a prescription filled or to go see a specialist.
Medicare has 2 to 3% of costs going to non-medical expenses.
http://www.medicarewatch.org/2001Basic/Whats_Ri
Privatizing Medicare will make it run out of money faster.