Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Risk/Reward in Silver Favors Buying Now, Not Waiting for Big Moves - 23rd Mar 19
Similarities Between Stock Market Today and Previous Bull Market Tops - 23rd Mar 19
Stock Market DOW Seasonal Trend Analysis - 23rd Mar 19
US Dollar Breakdown on Fed Was Much Worse Than It Looks - 23rd Mar 19
Gold Mid-Tier GDXJ Stocks Fundamentals - 23rd Mar 19
Which Currency Pairs Stand to Benefit from Prevailing Risk Aversion? - 23rd Mar 19
If You Get These 3 Things Right, You’ll Never Have to Worry About Money - 22nd Mar 19
March 2019 Cryptocurrency Technical Analysis - 22nd Mar 19
Turkey Tourist Fakes Market Bargains Haggling Top Tips - 22nd Mar 19
Next Recession: Finding A 48% Yield Amid The Ruins - 22nd Mar 19
Your Future Stock Returns Might Unpleasantly Surprise You - 22nd Mar 19
Fed Acknowledges “Recession Risks”. Run for the Hills! - 22nd Mar 19
Will Bridging Loans Grow in Demand and Usage in 2019? - 22nd Mar 19
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Fear of IRS Tax Audits Diminish

Politics / Taxes Mar 18, 2015 - 08:04 PM GMT



The announcement that Federal government’s tax-take hits all-time high as the federal government collected a record amount of taxes in fiscal year 2014, topping $3 trillion in revenue for the first time in its history, has the tax man taking a bigger bite than ever. Yet, the take that the collection bureau seems un-phased from all their scandals to put the taxpayer through their third degree audits are easing up. Why? The answer may surprise when the ledger is tallied up.

The Wall Street Journal reports, Fewer Taxpayers Are Audited Amid IRS Budget Cuts.

“Audit rates also fell in nearly every individual category and across income levels, according to the IRS. “Field” audits, which are more labor-intensive because they can involve in-person meetings with the taxpayer or his representative, dropped 15% to 292,000 in 2014. “Correspondence” audits, which are conducted by mail, fell more than 10% to about 1 million.”

Bloomberg follows up with their account IRS Audits of Individuals Reached Lowest Rate Since 2005.

“Revenue generated from audits was $9.83 billion, less than $10 billion for the first time since at least 2003. The IRS has 19,531 employees in what it calls “key enforcement positions,” down 14 percent since the 2010 peak.”

As individual returns get processed routinely, the corporate filings go through with even less scrutiny. As the article, IRS business audits drop states the IRS is under pressure to increase funding. Can anyone say Obamacare?

“Continuing a push for budget hikes, the IRS said Monday that just over 57,000 companies underwent audits of their federal tax returns during fiscal year 2014. The total represents the lowest number since 2006, new data issued by the agency show.”

Confirming this trend, CNBC provides this assessment in IRS says US corporate tax audits down sharply after budget cuts.

“Over the last five years, IRS funding has fallen by more than $1.2 billion, or 7 percent, to about $11.3 billion, while the number of revenue agents dropped by over 16 percent to 11,629, according to data released by the agency.”

Less employers, gives rise to fewer audits, while government revenues rise to an all time high. Wow, that must be the formula for efficient funding – WILLFUL COMPLIANCE.

Now just ask any prominent Tea Party activist if their fear of IRS retaliation is unwarranted? Doubt that absence of malice has diminished from IRS political hacks towards a movement that professes to be Taxed Enough Already. Somehow that message has fallen on deft ears for most of the rest of the population.

For the largest of corporate enterprises, their team of CPA’s and tax attorneys apply their trade to writing the tax laws in ways that their full time reporting requirements leave plenty of time for golf course recreation.

Even some small business avoided the audit as reported by the WSJ, “Audits of small businesses those organized under Subchapter S of the tax code—fell about 12.6% in fiscal 2014. That rate fell to about 0.36%. Around 4.5 million small firms filed in calendar 2013.”

However, “Partnership audits increased somewhat, amid a push by the IRS to put more scrutiny on that area” still provides greater risk of a review for individually owned businesses.

The anti-tax paying culture has not grown, nor has it taken hold on the larger business interests which accept that filling out forms and providing income and expense information is just a normal part of everyday life.

The notion that paying individual taxes is voluntary has never made it to prime time. The war against the taxpayer by the IRS has been won in the agency’s favor, if judged by the reluctant abidance from even the most disgusted tribute payer.

With the automated electronic procedures put in place through the banking and financial services system, concealing or even under reporting income is no easy matter. Even though a significant portion of the public challenges the intrusive techniques used to monitor their financial transactions, very few are willing to drop off the money tracking map.

This reality translates into a begrudging, hold your nose and pay up mentality, which underpins that infamous willful compliance mindset.

Another reason that audits are down comes from the user friendly correspondence from the Internal Revenue Service. Their site illustrates the advantage for the taxpayer to accept a government bill and just pay up. “If you receive a letter or notice from the IRS, it will explain the reason for the correspondence and provide instructions. Many of these letters and notices can be dealt with simply, without having to call or visit an IRS office.”

Dread from receiving such a letter befalls the recipient throughout the entire opening and reading process. The feeling of relief, just to fill out and sign a check, in order to avoid a face to face meeting is extremely strong for most docile citizens.

This attitude provides a substantial rationale why concern over audits has lessened, while the terror of the tax collector remains. This kind of trepidation lesson, with the degree of intractable subservient acceptance, suggests that paying your taxes is the price of living in a civilized society.

Well, so much for that argument, when you look at what you get from government for the money you so cheerfully contribute. The aspect of the behavior modification experiment that the income tax code is essentially all about has little to do about raising revenue to fund the operations of state.

The proof of this affirmation rests upon the practice of deficit spending and continuous expansion of government programs. There will never be enough money from taxes to feed the beast. Transferring your normal concern from an IRS examination might well be re-directed towards reducing the size, scope and intrusiveness of your government.

Calls to eliminate the IRS have merit. As the financial world transitions into an electronic money tyranny, the need to physically interrogate taxpayer subjects becomes less necessary.  The careerists “pols” will just debit your bank accounts when they want more of your wealth.


Discuss or comment about this essay on the BATR Forum

"Many seek to become a Syndicated Columnist, while the few strive to be a Vindicated Publisher"

© 2015 Copyright BATR - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors

BATR Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules