Thursday, December 16, 2004

The IRS

The Internal Revenue Service can arguably be stated to be the greatest revenue generator in the World, holding this position for decades. The sheer magnitude of Cash flow would make anyone think the IRS possesses State-of-the-Art financial management systems. This has never been the case. Here are some excerpts from GAO reports:


Projects continued to incur cost increases and schedule delays for
several reasons, including inadequate definition of systems
requirements, increases in project scope, and cost and schedule
estimating deficiencies. Cost overruns and schedule delays impaired
IRS’s ability to make appropriate decisions about investing in new
projects, delayed delivery of benefits to taxpayers, and postponed the
resolution of material weaknesses affecting other program areas.


The Y2005 IRS budget to Congress reflects a portfolio reduction of 37% from Y2003
(means a lower IRS budget to implement programs).


Over a trillion dollars in income
was distributed in tax year 2002 by
flow-through entities, such as
partnerships, subchapter S
corporations, and trusts, to their
partners, shareholders, or
beneficiaries, respectively. The
Internal Revenue Service (IRS)
estimates that from 6 to 15 percent
of such income is unreported on
individual tax returns. This income
is reported to both IRS and to the
recipients on a Schedule K-1 (K-1).
IRS uses K-1 data in its documentmatching
program to identify
noncompliance and for other
purposes



IRS has the capability to identify employers who
file wage statements with inaccurate SSNs but does not have a dedicated
compliance program for penalizing them.
the criteria for meeting the reasonable cause waiver
is such that few if any employers are likely to be penalized for filing
inaccurate SSNs. IRS has no record of ever penalizing an employer,
including the employers who were contacted during IRS’s review of
"egregious" employers.



In a nationwide selection of
413,723 businesses applying to sponsor immigrant workers from 1997
through 2004, GAO found 19,972 (5 percent) businesses and organizations
that were unknown to IRS. Information like this can be used to select
taxpayers for audit or other enforcement efforts.
GAO found that 67,949 (16 percent) businesses
applying to sponsor immigrant workers from 1997 through 2004 did not file
one or more tax returns. Failure to file a return could be relevant to a CIS
adjudicator’s decision about whether a business meets the financial
feasibility (ability to pay wages) and legitimacy (proof of existence) tests for
sponsoring an immigrant.
GAO is making a recommendation
to the Secretary of Homeland
Security and the Commissioner of
Internal Revenue to assess the
benefits and costs of data sharing
to enhance tax compliance and
improve immigration eligibility
decisions

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Such activity makes the United States Government a laughingstock, adjudged by All as incapable of systematic action and direction. Walmart possesses the Information processing to determine exactly what their Customers desire and wish to buy, based upon past purchase trends. GM can trace route Operational funds throughout the World, from resource acquisition to Operating Consumer credit funds for purchase of multiplex Product lines. The IRS cannot identify huge operational outleys of major Employers in the American economy. They cannot accurately define day-to-day financial transfers out of the Country. Many would acclaim this to be the best state, where taxing agents are befuddled. The trouble resides in the fact ordinary Taxpayers must make up Shortfalls in unreported Income and Profits, either by higher taxation or increased debt. lgl

1 comment:

stevelee9 said...

I recently saw a Hummer pull up at a "day laborer hiring site" (a donut shop parking lot) where the driver negotiated the services of four "undocumented immigrants" for a day's work.
This contractor gets to deduct the cost of the Hummer, gas and insurance! So it's the laws not just the unworkable inner-workings of government agencies.