The IRS Vs. The Bill Of Rights ....

ViRedd · #1 10-29-2008, 05:38 PM

The IRS Vs. The Bill Of Rights
by Daniel J. Mitchell, Ph.D.

To get an idea of what it’s like to tangle with the IRS, imagine having to fight Mike Tyson -- with both hands tied behind your back.

The IRS is the most feared government agency, and with good reason. Americans who run afoul of this bureaucratic behemoth have little chance of surviving unscathed.

In large part, this is because the rules are rigged against taxpayers. We have to provide information to the IRS, even though the Bill of Rights supposedly protects us from self-incrimination. We’re guilty until we prove ourselves innocent, even though our Constitution -- at least, in theory -- guarantees the presumption of innocence.

And heaven forbid you scribble a little message in the margins of your tax return: The IRS has the power to fine you for exercising your right to free speech.

Yet even with the playing field tilted in its favor, the IRS wants more power. Because some taxpayers have had the unmitigated gall to challenge this Darth Vader-like bureaucracy, the IRS is targeting lawyer-client confidentiality.

More specifically, the agency has filed summonses against a number of law firms, accounting firms and other professional tax advisers demanding that they reveal confidential information about their clients. Why? Because the IRS suspects their clients are seeking to exploit “loopholes” in order to lower their tax bills. And even though tax avoidance is not against the law, IRS officials want to use these firms as deputy tax collectors.

In football terms, they want to eavesdrop on the other team’s huddle so they know what play will be called -- ignoring fiduciary, legal and ethical responsibilities those various firms owe to their clients.

The IRS conveniently sidesteps the legal and confidentiality issues in the cases. Instead, the bureaucrats piously declare that they need to ransack files because some taxpayers may have obtained professional advice on how best to lower their tax bills. They claim their fishing expedition is part of a campaign to stamp out “abusive” tax shelters.

If the agency really wanted to eliminate tax shelters, though, the commissioner and other high-level IRS officials would be proclaiming the self-evident virtues of a flat tax. But don’t hold your breath waiting for this to happen. After all, there would be no need for 100,000 bureaucrats at the IRS if lawmakers replaced the internal revenue code with a simple and fair flat tax -- one that normal people could understand.

Fortunately, there are growing signs that Congress may realize tax reform is the only answer to IRS abuses. Earlier this year, the Senate voted overwhelmingly to endorse the principles of the flat tax. This vote wasn’t binding, but it was nonetheless encouraging to see that every Republican and nearly two-fifths of Democrats agreed, at least in principle, that the current tax system should be replaced. Lawmakers even understand that the flat tax is the best way to encourage compliance. “As tax loopholes are eliminated and the tax code is simplified, there will be far less opportunity for tax avoidance and fraud,” their resolution states.

In other words, there are two ways to improve enforcement of tax laws. One is to keep the current tax code -- a 17,000-page monstrosity that even tax lawyers have trouble understanding -- and rip up the Constitution so the IRS has more power over our lives. The other is to rip up the tax code and replace it with a flat tax that eliminates social engineering and government micro-management of our lives.

Ironically, some of our former Cold War adversaries have learned the right lessons. Lithuania, Estonia and Latvia adopted flat taxes after the collapse of the Soviet Union. Russia followed suit about three years ago with a 13 percent flat tax. These flat-tax systems have been so successful that Ukraine just adopted a flat tax, and Slovakia, Rumania and Belarus also are considering one.

President Reagan and other leaders used to condemn the Soviet Union because the communist system ran roughshod over individual rights. Today, former communist nations have the flat tax, while the IRS is trying to undermine lawyer-client confidentiality, one of our most important historic legal protections. It makes you wonder who really won the Cold War.

Daniel J. Mitchell is the McKenna Fellow in political economy at The Heritage Foundation (heritage.org), a Washington-based public policy research institute.

TheBrutalTruth · #2 10-29-2008, 10:00 PM

Quote:

Originally Posted by ViRedd

The IRS Vs. The Bill Of Rights
by Daniel J. Mitchell, Ph.D.

To get an idea of what it’s like to tangle with the IRS, imagine having to fight Mike Tyson -- with both hands tied behind your back.

The IRS is the most feared government agency, and with good reason. Americans who run afoul of this bureaucratic behemoth have little chance of surviving unscathed.

In large part, this is because the rules are rigged against taxpayers. We have to provide information to the IRS, even though the Bill of Rights supposedly protects us from self-incrimination. We’re guilty until we prove ourselves innocent, even though our Constitution -- at least, in theory -- guarantees the presumption of innocence.

And heaven forbid you scribble a little message in the margins of your tax return: The IRS has the power to fine you for exercising your right to free speech.

Yet even with the playing field tilted in its favor, the IRS wants more power. Because some taxpayers have had the unmitigated gall to challenge this Darth Vader-like bureaucracy, the IRS is targeting lawyer-client confidentiality.

More specifically, the agency has filed summonses against a number of law firms, accounting firms and other professional tax advisers demanding that they reveal confidential information about their clients. Why? Because the IRS suspects their clients are seeking to exploit “loopholes” in order to lower their tax bills. And even though tax avoidance is not against the law, IRS officials want to use these firms as deputy tax collectors.

In football terms, they want to eavesdrop on the other team’s huddle so they know what play will be called -- ignoring fiduciary, legal and ethical responsibilities those various firms owe to their clients.

The IRS conveniently sidesteps the legal and confidentiality issues in the cases. Instead, the bureaucrats piously declare that they need to ransack files because some taxpayers may have obtained professional advice on how best to lower their tax bills. They claim their fishing expedition is part of a campaign to stamp out “abusive” tax shelters.

If the agency really wanted to eliminate tax shelters, though, the commissioner and other high-level IRS officials would be proclaiming the self-evident virtues of a flat tax. But don’t hold your breath waiting for this to happen. After all, there would be no need for 100,000 bureaucrats at the IRS if lawmakers replaced the internal revenue code with a simple and fair flat tax -- one that normal people could understand.

Fortunately, there are growing signs that Congress may realize tax reform is the only answer to IRS abuses. Earlier this year, the Senate voted overwhelmingly to endorse the principles of the flat tax. This vote wasn’t binding, but it was nonetheless encouraging to see that every Republican and nearly two-fifths of Democrats agreed, at least in principle, that the current tax system should be replaced. Lawmakers even understand that the flat tax is the best way to encourage compliance. “As tax loopholes are eliminated and the tax code is simplified, there will be far less opportunity for tax avoidance and fraud,” their resolution states.

In other words, there are two ways to improve enforcement of tax laws. One is to keep the current tax code -- a 17,000-page monstrosity that even tax lawyers have trouble understanding -- and rip up the Constitution so the IRS has more power over our lives. The other is to rip up the tax code and replace it with a flat tax that eliminates social engineering and government micro-management of our lives.

Ironically, some of our former Cold War adversaries have learned the right lessons. Lithuania, Estonia and Latvia adopted flat taxes after the collapse of the Soviet Union. Russia followed suit about three years ago with a 13 percent flat tax. These flat-tax systems have been so successful that Ukraine just adopted a flat tax, and Slovakia, Rumania and Belarus also are considering one.

President Reagan and other leaders used to condemn the Soviet Union because the communist system ran roughshod over individual rights. Today, former communist nations have the flat tax, while the IRS is trying to undermine lawyer-client confidentiality, one of our most important historic legal protections. It makes you wonder who really won the Cold War.

Daniel J. Mitchell is the McKenna Fellow in political economy at The Heritage Foundation (heritage.org), a Washington-based public policy research institute.

I don't know where I heard it, but I heard some where that even Congressmen fear the power of the IRS.

misshestermoffitt · #3 10-30-2008, 06:52 AM

I wonder, if the IRS wants to haul you in to court, can you plead the 5th? Isn't the burden of proof supposed to be on them? Hhmmmmm, something stinks here and I think it's the government.

ViRedd · #4 10-30-2008, 09:58 AM

Quote:

Originally Posted by misshestermoffitt

I wonder, if the IRS wants to haul you in to court, can you plead the 5th? Isn't the burden of proof supposed to be on them? Hhmmmmm, something stinks here and I think it's the government.

No you can't. By signing your 1040 below the phrase "Under penalty of perjury, ..... You have waived your Fourth and Fifth Amendment rights. Its like saying OK when a police officer asks if he can search your car.

Of course, if you put a line through the penalty of perjury phrase on the 1040, you have automatically triggered a tax audit.

Vi

Seamaiden · #5 10-30-2008, 12:14 PM

Fucking sons of bitches!

joepro · #6 10-30-2008, 01:16 PM

Quote:

Originally Posted by Seamaiden

Fucking sons of bitches!

made me laugh.

Like VI stated before, a cash set up and you 'could' avoid the irs.

My brother avoided taxes for years, but had help with his long term girlfriend. She had the bank accounts and the credit cards in her name. Also the house and two cars and boat, all in her name.His boss would pay him in personal checks and do side work for cash.
....intill she left him and took everything

Dfunk · #7 10-30-2008, 10:54 PM

Nice how they set you up & unless you can get money off the books which is illegal you have to pay them.

ViRedd · #8 10-31-2008, 04:58 PM

Is there any doubt why they want a cashless society?

Vi

misshestermoffitt · #9 11-01-2008, 07:45 AM

I don't like the idea of trusting my cash to a computer system. Computers break, they get virus', they get hacked, it's what they do. I like to pay cash, I pay cash for most everything. There is no service charge for paying cash, you actually get to pay only what you owe. It's great !!!

Seamaiden · #10 11-01-2008, 09:06 AM

I don't like the idea that my "rates" are overseen by a self-funding entity that has powers even the fucking executive branch doesn't (yet) have! Can you say "conflict of interests"?

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