“There’s been confusion about the meaning of the directive that you cited in the letter last August and then repeated here today,” Smith told Yellen, referencing her August 2022 letter in which she directed that the IRS shall not use new personnel or auditors “to increase the share of small businesses or households below the $400,000 threshold that are audited relative to historical levels.”

Yellen’s letter stated that “contrary to the misinformation from opponents of this legislation, small business or households earning $400,000 per year or less will not see an increase in the chances that they are audited.” //

So Smith asked what are they talking about when they’re talking about “will not see an increase” — did she mean the total number of new IRS audits or a proportionate number based on historic levels?

“I’m talking about the proportion of those small businesses and families,” Yellen responded.

“Okay. So the proportion, I mean, just for the record, the proportion is 90%,” said Smith, referencing the GAO report. “So 90% of the new audits will be, you know, according to the data, that we can expect up to 90% of new audits to be on those making less than $400,000.”

Oh, so they were playing word games with us. They’re still going to have 90 percent of the new audits falling on us.

Axiomatically, you sign your federal income tax return under penalties of perjury. That means it should be accurate and complete. But in the real world, despite your best efforts and honesty, you may forget something or make an innocent--even if foolish--mistake.

In fact, it may not even be your fault. You may receive a Form 1099 or Form K-1 after you file your return. Amended K-1s from partnerships, S corporations and LLCs have a particularly bad habit of showing up right after you file.

In such cases, it may surprise you to learn that you are not required by law to file an amended return. Once you have filed your tax return, you cannot be prosecuted for failing to file an amended return, even if something happened after you filed that makes it clear your original return contains mistakes. When considering an amendment, first ask yourself whether the return you filed was accurate to your best knowledge when you filed it.

If it was, you are probably safe in not filing an amendment. (You still may want to amend, of course, but filing an amendment would be optional.)

My best understanding is that you need to file Form 843. The instructions for the form say that it can be used to request:

A refund or abatement of a penalty or addition to tax due to reasonable cause or other reason (other than erroneous written advice provided by the IRS) allowed under the law.

The "reasonable cause" here is a good-faith confusion about what Line 79 of the form was referring to.

In Form 843, the IRC Section Code you should enter is 6654 (estimated tax). For more, see the IRC Section 6654 (note, however, that if you already received a CP14 notice from the IRS, you should cross-check that this section code is listed on the notice under the part that covers the estimated tax penalty).

If your request is accepted, the IRS should issue you Notice 746, item 17 Penalty Removed:

We removed the penalty we charged you and we are reviewing your account. We will let you know the results

You can get more general information about the tax collection process, and how to challenge it, from the pages linked from Understanding your CP14 Notice.

There are over 600 billionaires in the United States. Why does the IRS need an entire army of 87,000 agents to deal with just over 600 people? Why do they need 87,000 new agents in enforcement to deal with these 600-plus people? Why are these enforcement agents armed? Do they anticipate a firefight against these billionaires? //

According to Reason, the IRS attacked the poorest of Americans significantly more than they did anyone else:

https://reason.com/2023/01/06/in-2022-the-irs-went-after-the-very-poorest-taxpayers/

On Wednesday, Syracuse University’s Transactional Records Access Clearinghouse (TRAC) released data provided to it by the Internal Revenue Service (IRS) on audits performed by the agency in fiscal year 2022. Despite the infusion of new funding earmarked for the IRS via last year’s Inflation Reduction Act, the agency continued historic trends of hassling primarily low-income taxpayers, with relatively few millionaires and billionaires getting caught up in the audit sweep.

“The taxpayer class with unbelievably high audit rates—five and a half times virtually everyone else—were low-income wage-earners taking the earned income tax credit,” reported TRAC, noting that the poorest taxpayers are “easy marks in an era when IRS increasingly relies upon correspondence audits yet doesn’t have the resources to assist taxpayers or answer their questions.”

I recently took a (chaperoned) tour of the Pipeline, which is usually off-limits to journalists. Imagine Willy Wonka’s secretive chocolate
factory, but instead of gumdrops and lollipops it’s … paper. Everywhere, paper. //

Ultra Journalist (Ret) - JOURN-L of Skrypton @Magnum_CK
·
Replying to @GlennKesslerWP
This would all go away if we abolished the current tax code and made doing one’s taxes as easy as filling out a post card.
4:02 PM · Aug 9, 2022 //

Jim W @plotpointradio
·
Replying to @GlennKesslerWP
Maybe a 70,000 page tax code gums up that antiquated system a bit
3:16 PM · Aug 9, 2022

Already, the “IRS audits the poor at 5 times the rate of everyone else,” says CBS News. In other words, the IRS audits those who can least afford a tax lawyer’s help, so they just pay up.

https://www.cbsnews.com/news/irs-audit-eitc-five-times-as-likely-to-get-audited/

The Crapo Amendment was meant to make sure that the poor and middle class wouldn’t feel the brunt of Biden’s Godzilla tax collection agency.

But Dems know who butters their toast, don’t they?

Even when the IRS finds nothing wrong, honest taxpayers can find themselves on the hook for thousands in legal fees, trying to prove their innocence. //

“The money allocated to the IRS,” Joseph Simonson reports, “would increase the agency’s budget by more than 600 percent.”

Musk’s reaction to the IRS funding was in response to a report by the Washington Free Beacon, which found the tax agency’s expensive hiring spree would make it larger than the Pentagon, the State Department, the FBI, and Customs and US Border Patrol combined.

Venmo, PayPal and Cash App will now have to report transactions totaling more than $600 to the IRS as Biden plans to ramp up financial enforcement //

The new reporting requirement will ensure that small businesses that receive payments through those apps are paying their fair share in taxes on them
Beginning Jan. 1, 2022, third-party payment processors were required to report such transactions
The changes will be included during the 2022 tax season
The payment apps were previously required to send users 1099-K forms if their gross income exceeded $20,000 or had more than 200 transactions per year //

The new rule is only for goods and services transactions, not personal, such as paying a roommate for rent or reimbursing a friend. It also excludes anyone selling a personal item at a loss, such as a couch bought for $700 and sold for $650. //

The new tax rule is separate from a proposed IRS reporting requirement that originally would have handed over transaction data on accounts with more than $600 aggregate inflow and outflow. That proposal, originally part of President Biden's Build Back Better plan, was raised to a $10,000 threshold after much pushback, and has not yet been acted on by Congress.

Illegal activities.

Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Schedule 1 (Form 1040), line 8z, or on Schedule C (Form 1040) if from your self-employment activity.

Stolen property.

If you steal property, you must report its fair market value in your income in the year you steal it unless you return it to its rightful owner in the same year.

While you obviously wouldn’t be expected to know everything — or even most — of what the tax code says, there is something the IRS expects people to declare as income that is so absurd, you won’t believe it.

According to the IRS, “If you steal property, you must report its fair market value in your income in the year you steal it unless you return it to its rightful owner in the same year.”

Elon Musk said his wealth "isn't some deep mystery" and that his taxes are "super simple."
He told The Babylon Bee he doesn't use tax-avoidance schemes, offshore accounts, or tax shelters.
The tech billionaire recently clashed with Warren, who accused him of "freeloading" over taxes. //

if Musk chooses to exercise all his Tesla share options expiring in 2022, the taxes on these could exceed $10 billion for this year, according to calculations by Bloomberg.

Musk, who now tops the Bloomberg Billionaires Index with a net worth of $261 billion, told The Babylon Bee that he could do his taxes himself "in a few hours." //

He said his worth was calculated by multiplying his ownership percentage of the two companies by their valuations.

"My so-called wealth, it's not some deep mystery," Musk said.

He added that he doesn't take salaries or bonuses from the companies because he thought it would be "morally good to not do that."

"My cash balances are very, very low, at least until I sold stock," Musk said. "I simply had loans against my stock, so if Tesla and SpaceX went bankrupt, I would go bankrupt too, immediately."

Musk has sold $15.4 billion in Tesla shares since asking Twitter on November 6 to vote on whether he should divest 10% of his stake, and said Wednesday that he was "almost done" selling stock. He told The Babylon Bee that this quarter was the first time he sold stock "in any meaningful way."

The Proof Is in the Pudding: IRS Data Show Trump’s Tax Cuts Benefited Middle- and Lower-Income Earners More Than the Wealthy

Four years after President Donald Trump and congressional Republicans passed the Tax Cuts and Jobs Act (TCJA) into law, IRS data prove the historic legislation benefited those in the working- and middle-classes more than the wealthy.

Of course, this fact belies the left’s relentless lies about TCJA being a massive tax cut for the ultra-wealthy while ripping off hard-working Americans. //

“IRS data further show that the Tax Cuts and Jobs Act appeared to have a strong upward effect on economic mobility. The number of filers with an adjusted gross income of $1 to $25,000 decreased by more than 2 million in just one year, while the number of households reporting incomes higher than $25,000 increased in every income bracket.” //

“The IRS data also revealed that higher-income earners paid an even larger share of the total tax burden in 2018 than they did in 2017, indicating that the Tax Cuts and Jobs Act may have made the tax code slightly more progressive,” Haskins writes.

The proof is in the proverbial pudding: “In 2017, filers earning $500,000 or more paid 38.9 percent of all personal income tax revenues. In 2018, the same income bracket paid 41.5 percent of total income tax revenues.”

Levied on wealthy Americans with phones in 1898 to help fund Spanish-American War, tax was discontinued Tuesday.

Aug. 2, 2006 6:01 a.m. PT

The Spanish-American War has been over for more than 100 years, and now so is the tax imposed in 1898 to help fund it.

As of Tuesday, all phone companies selling long-distance phone service are legally required to eliminate the 3 percent federal excise tax on long-distance service, which had been established in 1898 as a luxury tax on wealthy Americans who owned telephones.

Lauren Boebert
@laurenboebert
To get a sense of how large Biden wants to grow our IRS.

@ElonMusk
’s Tesla has about 70,000 employees.

@Apple
has around 154,000 globally.

Biden wants our IRS to have 170,000 employees.

An increase of 87,000 supposedly to monitor the 614 billionaires in America.
7:50 PM · Nov 21, 2021

“He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.” -from the Declaration of Independence

Look, you know the drill. Billionaires don’t pay their “fair share” of income taxes because most of their money isn’t income. Mostly, they own paper wealth — the value of the shares of the companies they founded.

They also have tax lawyers who eat IRS agents for breakfast.

So, no, Presidentish Joe Biden’s additional 87,000 agents won’t be going after Elon Musk or Jeff Bezos.

They’ll be going after middle-class taxpayers because we’re appealing for two reasons:

We have just enough means to pay up
We don’t have enough means to fight the IRS
Biden would send hither swarms of officers to harass our people and eat out their substance.

But can you blame him? It isn’t cheap buying 81 million LOL votes, so Biden needs to rob the middle class because that’s where the money is (and the lawyers aren’t).

That’s why Insanity Wrap is announcing our 2024 presidential campaign, starting today.

If elected, Insanity Wrap will reduce the entire IRS to one guy named Phil, who has narcolepsy, short-term memory problems, and tends to drink too much.

This was my actual experience attempting to opt out of the monthly welfare payments that have the potential to wreak havoc with our family’s year-end tax bill. //

We hold these truths to be contradictorily evident: Requiring proof of identification for the sake of voting privilege is an overwhelming burden. Requiring proof of identification to log onto the IRS website for the sake of opting out from the expanded child tax credit is a mere necessity.

By “proof of identification,” the IRS has some hefty standards in mind. What follows is, I do solemnly aver, not made up. This was my actual experience attempting to opt out of the monthly welfare payments that have the potential to wreak havoc with our family’s year-end tax bill.

A top Internal Revenue Service official told a Christian group that “Bible teachings are typically affiliated” with the Republican Party as a rationale for denying its application for tax-exempt status.

The Texas-based Christians Engaged filed an appeal on Wednesday to the IRS’ denial, objecting to the tax agency’s assertion that it is partisan.

In a May 18 denial letter, IRS Exempt Organizations Director Stephen A. Martin said Christians Engaged is involved in “prohibited political campaign intervention” and “operate[s] for a substantial non-exempt private purpose and for the private interests of the [Republican Party].”

A “legend” at the top of the letter shows nine letters of the alphabet being used as shorthand to represent something. In this letter’s example, oddly, “D” represented “Republican.”

“Specifically, you educate Christians on what the Bible says in areas where they can be instrumental, including the areas of sanctity of life, the definition of marriage, biblical justice, freedom of speech, defense, and borders and immigration, U.S. and Israel relations,” Martin wrote. “The Bible teachings are typically affiliated with the D party and candidates. This disqualifies you from exemption under lRS Section 50I(c)(3).”

Christians Engaged first applied for tax-exempt status in late 2019. First Liberty Institute, a religious freedom public interest law firm, is representing the Christian group in its appeal.

Americans were astonished two months ago after newly unsealed internal FBI notes taken by the agency’s former assistant director of counterintelligence, Bill Priestap, showed top bureau officials discussing strategy ahead of their January 24, 2017 interview of General Michael Flynn. FBI officials were debating the best way they could set him up in a perjury trap.

Several days later, sources familiar with the Durham investigation told Fox News that John Durham had reviewed the Flynn documents and was disturbed that no whistleblowers came forward early on. Considering that there were more than a few officials who had to be aware of what was going on, including support staff, Mr. Durham found it remarkable that no one spoke up “at the onset.” One would think he might have learned by now that the only use members of the deep state have for whistleblowing is when it can be used as a weapon against the right. I posted on this story here.

The next day, I received an email from one of my readers who said he could easily answer Mr. Durham’s question. It’s because “No one in the FBI or the DOJ wanted to engage in a futile suicide mission that would put them and their families through years of hell, cost them hundreds of thousands of dollars, and put their pensions at risk, all so that their information could be ignored.”

William Henck knows, because he lived it.

Mr. Henck’s story is the polar opposite of alleged whistleblower Eric Ciaramella’s, whose bogus complaint to then-Intelligence Community Inspector General Michael Atkinson last August triggered President Trump’s impeachment. Not only did my reader not receive the kid-glove treatment Ciaramella did, he was terminated from his position as an IRS attorney after 30 years of service.

In November 2017, Mr. Henck was forced out for being a whistleblower. During his career at the IRS, he reported the bullying of World War II veterans, evidence of a cover-up in the Lois Lerner (or Tea Party) case, and the improper giveaway of literally billions of dollars to taxpayers represented by sketchy Washington lobbyists.

Mr.Henck said he reported his concerns both internally and externally, to his supervisor, to upper management, to the Treasury Inspector General for Tax Administration (TIGTA), to the Office of Special Counsel (OSC), to Congress, to Trump political appointees in the Treasury Department, and to the media. And none of his detailed complaints of misconduct were ever investigated. Not a single one.

In 2016, the IRS Office of Chief Counsel sent me a notice of proposed termination for allegedly disclosing taxpayer information under section 6103. Their theory was that because my name appeared in a Washington Post article, people could read that article and identify a specific taxpayer. Their theory was ridiculous, but it did not matter. My attorney advised to me to take a deal where I could work another year to get 30 years in and then retire. He reasoned that even though the case was absurd and even though my civil service rights had been shredded, I faced an amoral foe with unlimited resources, no downside risk, and a willingness to lie to get rid of me. Basically, the process would have become the punishment. By being forced out early, I lost approximately $400,000, and even more importantly, my family and I went through years of hell. My wife and I were even subjected to a retaliatory income tax exam. //

What do they say to the American taxpayers? ‘Well, sure, the IRS lies all the time, but we want you to tell the truth. And the IRS hides and destroys documents, but we want you to provide all of your documents. And the IRS habitually breaks the law, but we want you to voluntarily comply with the Internal Revenue Code.’

Maybe that could work long term if the IRS was still an efficient agency, but it’s not. It is a corrupt and dysfunctional shell of its former self and it has lost both the moral authority and the ability to enforce the Internal Revenue Code.

Powerline’s Scott Johnson reported numerous times as Mr. Henck was going through his ordeal. Johnson published a series of his personal accounts that can be accessed by clicking on “Inside the IRS.” In one piece, “Inside the IRS, part 8,” he argued:

“[t]he rule of law at the IRS died” following a lengthy illness and “[t]he immediate cause of death was IRS attorney executives giving themselves large bonuses and then illegally keeping those bonuses secret.”

https://www.powerlineblog.com/?s=inside+the+irs&x=0&y=0

Involuntary denied boarding compensation paid in cash that's 4 times your one-way fare is clearly not a rebate on your ticket price, it exceeds the ticket price. And yet it isn't taxable... //

1099: Miscellaneous payments of less than $600 are generally not reported to the IRS. IRS flags are triggered when they receive a 1099-MISC and the taxpayer does not report it. It seems that the airlines do not report denied boarding payments to the IRS. Airlines would need tax information from passengers to issue 1099s, and to my knowledge that information is not collected.

Transportation Taxes: Tickets purchased with vouchers are not taxed for one additional transaction, the view being that taxes were paid on the original foregone flight and doing so again would be double-taxed. AA, for instance, says that transportation vouchers are tax-exempt unless they have the code OU (full refund on unused flight). However, if someone uses a $300 voucher for a $200 flight and then a $100 flight, the passenger will pay transportation taxes on the $100 flight.