Barrack Obama has been a godsend for my tax practice. His profligate spending and reluctance to eliminate bureaucratic waste have forced him to take across-the-board aggressive action against tax cheats and delinquent taxpayers in an attempt to close the annual $300 billion tax gap. That means more clients for moi.
Lynnley Browning of the New York Times writes of the latest new IRS collection tactic:
The Internal Revenue Service said on Tuesday that it would require large corporations to disclose information about some tax transactions, a surprise announcement intended to bolster efforts to root out questionable or aggressive shelters.
Under the plan, corporations with assets of at least $10 million, which already must file similar disclosures with the Securities and Exchange Commission, will be required each year to tell the I.R.S. the broad outlines of tax transactions that might raise questions within the agency. Most corporations already file the disclosures, under an accounting rule known a Fin 48, so the proposed I.R.S. regulation will affect a large number of companies.
The disclosures will not be required until the 2010 or 2011 tax reporting year. The I.R.S. is seeking comments from corporations before announcing when the new rule will take effect.
The agency plans to develop a system of penalties and sanctions for companies that do not make the disclosures, and said it was considering asking Congress to pass laws imposing penalties on companies that fail to comply.
I applaud the President for going after tax cheats. As I’ve said before, here and elsewhere, let’s first achieve relatively full compliance and then, and only then, ask honest taxpayers for a raise.
Related Posts:
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- Schedule C Businesses Under IRS Attack
- Obama the Tax Gap Closer Hires Another Tax Gap Widener
- Obama Plans to Quadruple IRS Enforcement Funding in Next Five Years
- Op-Ed on Tax Increases: The Government Doesn’t Deserve a Raise
8 responses so far ↓
1 Wes // Jan 27, 2010 at 12:27 pm
How long can the President keep his foot on the pedal. Won’t businesses eventually get angry and start pushing back by using their clout in Washington? I personally think what he is doing is a good idea, but the cynic in me thinks it has a short shelf life.
2 Peter // Jan 27, 2010 at 6:46 pm
Wes,
Good question.
But it’s politically smarter to go after tax cheats, which everyone supports, than to continue to raise taxes, which most people oppose.
3 Carmody // Jan 28, 2010 at 11:36 am
I love your different point of view and your site generally. My firm represents tax whistleblowers (principally offshore avoidance and business is very brisk too, so, in a way, my practice compliments yours! The enormous offshore tax avoidance transactions engaged in by Wall Street investment banks, accounting and law firms have substantially undermined our economy. I applaud Mr. Obama’s efforts to stop this unpatriotic or perhaps treasonous activity. Forget the politics, just do the right thing!
4 Peter // Jan 28, 2010 at 11:41 am
Carmody,
Thanks for visiting. I agree with you, just because you didn’t vote for a President or generally don’t support his policies, doesn’t mean everything he does is wrong.
Let’s put country above party.
5 Carmody // Jan 28, 2010 at 12:16 pm
Agreed. I also believe many of Mr. Obama’s policies are wrongheaded and hypocritical, but NOT this one. Putting the country first on specific issues of common interest will reinforce the shaky foundations of our state. Forcing tax compliance on Wall Street to stop offshore tax evasion in the hundreds of billions is a necessity to avoid tax rate hikes, and it is the right thing to do. All the best
6 TIGTA Report: Accelerate Criminal Tax Investigations // Apr 28, 2010 at 7:47 am
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8 Blanche // Oct 1, 2011 at 6:40 am
I think the President is overreaching. Most of the information the IRS wants is already available to them. The only purpose of these measures is to raise revenue by penalizing many law abiding companies for not sending copies of information already available to IRS, directly to the IRS. It may be good for your business, but it is an additional burden on companies that those companies will pass on to the consumers (also known as taxpayers). Everything the Obama Administration does is designed to raise revenue to try and trim the $14 TRILLION deficit. Obama does not really care about tax cheats, he needs cash.
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