There aren’t many institutions that can strike fear into the hearts of both ordinary Americans and the board members of multinational corporations quite like the Internal Revenue Service (IRS). Does your heart skip a beat after receiving a letter from the IRS in the mail? Those who have been audited know what it feels like to have the gigantic government entity breathing down their necks and exerting every ounce of pressure that the law will allow in order to complete the agency’s objectives. The ordeal can be terrifying. Now, the IRS is creating IRS “SWAT teams” in order to hunt down taxpayers and could soon begin sharing individual taxpayer information with State and local law enforcement agencies!
In May 2011, the IRS installed Samuel Maruca as Transfer Pricing Director. In that role, he has hired talented tax specialists from big name law and accounting firms nationwide in order to fight transfer pricing. Without going into the complicated technical details, transfer pricing is a strategy used by large corporations whereby the corporation transfers its assets, goods, and services to another country with a more favorable tax rate. The IRS, seeing billions of taxable dollars leaving the country, decided that it needed create a “SWAT team” of tax experts and lawyers to fight this exodus.
Shouldn’t these transfer pricing schemes tell the United States government that its tax codes are too complex? What will these new “SWAT team” members bring to the table that the IRS’ standing army of over 90,000 tax professionals couldn’t? Shouldn’t the tax code be simple enough that citizens and corporations know exactly what is required of them? Unfortunately, this is not the case. Both the IRS and private corporations use the complexities of the tax code as a sword and shield; judging by the IRS’ need for a special team of tax commandos to translate its own tax code, I would say that the corporations are winning. If the tax code is so complex that the IRS itself cannot properly administer it, shouldn’t the tax code be simplified? What of the average taxpayer? For years, the IRS has been using the complex structure of the tax code to intimidate and confuse taxpayers. With these new tax commandos, it looks like the IRS is stepping up their game.
One argument for lower taxes on corporations has always been that a lower tax rate allows companies to invest money not surrendered to the IRS. These investments create jobs, raise salaries, and foster prosperity in the United States. When tax rates become prohibitively high, companies seek out greener pastures: countries with lower corporate tax rates. This removes their tax dollars from IRS coffers and takes many American jobs overseas. The economy has been in a recession for years; do we really want companies taking jobs, investment dollars, and taxable income out of the United States? Shouldn’t lawmakers be making it easier for companies to do business in the United States rather than making it more difficult?
Why should YOU be concerned about these “SWAT teams”? The IRS is already a colossal government entity that employs over 90,000 people. Most ordinary citizens feel helpless against such a monstrous organization. Now the IRS is creating highly specialized teams in order to collect taxes? How long before these teams begin targeting ordinary citizens rather than multinational corporations? How long until you need to be worried about a tax “SWAT team” banging on your front door? And how long until these “SWAT teams” begin sharing your PERSONAL taxpayer information with State and local law enforcement agencies?
In 1976, Congress enacted legislation to protect taxpayers’ personal information by making it a crime for IRS workers to share such information. Today, the IRS is seeking out ways around this legislation. They are preparing a program in Tampa, Florida where taxpayers will be able to waive their statutory right to privacy, thus allowing the IRS to share their taxpayer information with law enforcement officials. Further, Senator Bill Nelson (D) of Florida recently introduced S. 1534, the “Identify Theft and Tax Fraud Prevention Act”, for consideration in the US Senate. This legislation would make it easier for the IRS to share YOUR personal taxpayer information.
Ostensibly, the IRS would give this private taxpayer information to State and local law enforcement agencies in an effort to protect the consenting taxpayer against identity theft and tax fraud. How long until the IRS begins asking EVERY taxpayer for such a privacy waiver? Government bodies with police powers over citizens are notorious for using every applicable law AGAINST the people these bodies are charged with protecting. How long will it take for the IRS to begin using this law as a weapon against individual taxpayers?
The tax code is incredibly complex; even tax professionals have trouble understanding it. Many Americans fear the IRS and the power that the organization wields. This widely feared cabal now wants to “request” permission from taxpayers that will enable the IRS to share taxpayer’s personal information with law enforcement organizations nationwide. Many taxpayers may not understand that they can legally decline such consent or they may fear repercussions from the IRS if they refuse such consent to share such information.
It is important to ask what happens to the taxpayer information after it is shared with police departments. Neither current law nor proposed legislation S. 1534 requires these law enforcement agencies to keep the taxpayer information secret. It is only a matter of time before taxpayer information is leaked or lost. Further, can the taxpayer information that law enforcement agencies receive be used as evidence against that taxpayer for an unconnected crime? Currently, taxpayers do NOT have any statutory protections that restrict what these law enforcement organizations may do with the taxpayer information. The police may use this information in any way it sees fit and there are no restrictions. This is truly FRIGHTENING!
The IRS is a monolithic organization who uses its tax code complexity to frighten and confuse taxpayers. American citizens have statutory rights that keep their personal information secret. The IRS is creating “SWAT teams” to hunt down taxpayers and they want to be able to share your PERSONAL taxpayer information with law enforcement agencies; effectively eroding the statutory rights that Congress enacted in 1976. Help us stop the erosion of individual rights and liberties by contacting Congress and demanding that they institute individual taxpayer protections!