The Need For Fiscal Responsibility In Washington

Yesterday The Washington Times reported that the Internal Revenue Service was extremely generous with taxpayer money–paying millions of dollars in refunds to people who were not legally entitled to them.

The article reports:

The IRS doled out more than $24 billion in potentially bogus refunds claimed under several controversial tax credits in 2016, according to a new audit that said $118 million was even paid to people who weren’t authorized to work in the U.S. in the first place.

Some $16.8 billion in payments were made on improper claims under the Earned Income Tax Credit, signifying a 24 percent error rate. Investigators also estimated $7.2 billion in improper payments for the Additional Child Tax Credit, representing 25 percent of the total, and $1.1 billion in improper payments, or 24 percent, for a higher education tax credit.

The totals and error rates for the earned income and child credits were comparable for 2015, while the education tax credit saw improvement.

The article explains that Congress passed a law in 2015 that was supposed to curb payments to people who were not entitled to them.

The article reports:

Both the inspector general and the tax agency said that steps have already been taken to try to prevent a repeat in the future, saying that a law passed in late 2015 should help.

Treasury Inspector General for Tax Administration J. Russell George said the IRS needs to follow through on the 2015 law, which imposes more restrictions on certain filers and delays refunds for people claiming the credits to give agents more time to flag suspicious returns.

One particular problem the IRS faces is checking people who have Social Security numbers but who aren’t authorized to work in the U.S.

This is one place that the federal budget could be easily cut. Tax refunds should only go to the people entitled to receive them.

 

At Least Some Of The Internal Revenue Service Is Being Held Accountable

The Washington Examiner is reporting today that three IRS workers are facing prison time for defrauding the government. The Treasury Inspector General for Tax Administration detailed the charges today.

The article reports:

Paul G. Hurley, who worked in Seattle, was found guilty of taking bribes from a part owner of a chain of recreational marijuana shops.

“Hurley seemed sympathetic to the taxpayer regarding the [Internal Revenue Code’s] prohibition against deductions and credits for businesses in the marijuana industry and talked about being unhappy at the IRS,” the watchdog said.

Hurley bragged about saving the business owner $1 million, and said he was living “paycheck to paycheck.”

“Initially, Hurley wanted the taxpayer to pay off his student loans in small amounts over time, but when the taxpayer declined, Hurley said he wanted cash,” the watchdog said. “Hurley and the taxpayer scheduled a time to meet several days later. Hurley told the taxpayer not to tell anyone, not even his business partner.”

Hurley took a $5,000 payment, and then a $15,000 payment from the business owner. He was sentenced to 30 months in prison, plus three years of probation.

Creshika Wise pleaded guilty to aggravated identity theft back in May.

Wise was an IRS revenue agent in Atlanta, and developed a scheme to ensure that all or part of a $758,846 payment due to the IRS would go to herself.

Kimberley Brown-English was found guilty of six counts of preparing and filing false tax returns.

She was an IRS worker based in California, and in 2011 and 2012, she filed income tax returns “in which she falsely claimed two dependents, a parent and a nephew.”

“Neither of the individuals claimed as dependents had a familial relationship with Brown-English,” TIGTA said.

The IRS is one of the most powerful federal agencies in the country. They have amassed too much power and have become politicized. It is truly time for them to go.

Tax Refund, Anyone?

Today’s Washington Free Beacon posted a story stating that the Internal Revenue Service issued $46 million in erroneous tax refunds in 2013 returns.

The article reports:

The Treasury Inspector General for Tax Administration (TIGTA) released an audit Monday faulting the IRS for approving thousands of potentially fraudulent tax refunds in 2013.

“TIGTA identified that because of a programming error, over $27 million of refunds were erroneously issued for 13,043 Tax Year 2013 tax returns,” the audit said. “The programming error is overriding the IRS’s two-week processing delay on some refund tax returns that are identified by the IRS as potentially fraudulent.”

The audit said the returns were flagged for claiming a “questionable tax credit” but were then automatically issued before the IRS could complete its verification process.

In addition, the audit identified 3,910 “potentially fraudulent” tax returns that were issued due to ineffective monitoring, totaling $19 million.

“The IRS did not ensure that tax examiners timely completed their verification work,” the audit said. “Name mismatches in IRS systems prevented refund holds from posting to tax accounts. Refund holds were either not set correctly or not functioning as intended.”

The article states that the audit recommended that the IRS improve its screening and verification process. No kidding.

The Rules Should Apply Equally To Everyone

On Wednesday, the Washington Examiner reported that Internal Revenue Service (IRS) employees who cheated on their taxes were promoted–not punished.

The article reports on the finding of the Treasury Inspector General for Tax Administration:

Nearly one-third of the employees from 2008 to 2013 caught cheating on their taxes received at least one bonus or raise within a year of being disciplined, investigators reported. These rewards include nearly $145,000 in bonuses, almost 900 hours of time-off awards and 30 temporary and permanent promotions.

…”Some employees had significant and sometimes repeated tax noncompliance issues, and a history of other conduct issues,” the report said. “Moreover, management had concluded that the employees were not credible. Nonetheless, the proposed terminations were mitigated by the IRS Commissioner.”

Federal law requires that IRS employees guilty of intentional tax law violations must be terminated, unless mitigated by the IRS commissioner. Since the IRS doesn’t have a policy to document the reason why intentional tax violators aren’t fired, it was unclear why the employees received lesser discipline.

It is time for Congress to come up with a tax code that abolishes the IRS. Aside from becoming political, which it was never supposed to be, it has also lost any moral bearing it might have had.

Why Congressional Investigations Can Take A Long Time

It seems that there have been so many scandals involving the Obama Administration and Hillary Clinton that it is hard to keep track. After a while it seems as if the investigations never seem to end. Well, there’s a reason the investigations seem to drag on–sometimes the information needed to conduct the investigation can be hard to get.

The Hill reported yesterday that thousands of emails from Lois Lerner have magically appeared.

The article reports:

The Treasury inspector general for tax administration (TIGTA) said it found roughly 6,400 emails either to or from Lerner sent between 2004 and 2013 that it didn’t think the IRS had turned over to lawmakers, the panels said. The committees have yet to examine the emails, according to Capitol Hill aides.

…But a spokesman for Senate Finance Committee Chairman Orrin Hatch (R-Utah) said the committee hoped the new emails would bring the panel closer to releasing the findings of its IRS investigation. Committee aides have said the panel was close to finishing its report when the IRS said it couldn’t locate the Lerner emails last year.

“These emails will be carefully examined as part of the committee’s bipartisan IRS investigation,” the spokesman said. “After TIGTA produces their report regarding the missing data later this year, the Committee hopes to follow suit and move forward with the release of its bipartisan report on this issue.” 

If the IRS had produced the emails when they were originally asked to, the investigation would be over. I also can’t help wondering if the emails have been tampered with in any way.

Somehow The New York Times Missed This

Yesterday The Committee on Oversight and Government Reform released its report on Lois Lerner’s role in IRS targeting.

These are the highlights of the report (The link above provides a link to the entire report. The highlights include page numbers):

Key Document Based Highlights (documents and testimony in appendix):

  • Tea Party “itching for a Constitutional challenge:” Lerner and her colleagues, after being under public pressure from President Obama and other Democrats, engaged in an e-mail exchange about how they could showcase their scrutiny of a Tea Party applicant for public disclosure, despite rules protecting the secrecy of unapproved applications.  The conversation turned to the possibility of a court case – if a Tea Party applicant would challenge the IRS ruling.  On this, Ms. Lerner opined, Tea Party groups would litigate because they are “itching for a Constitutional challenge.” – p. 41
  • Lerner discusses political scrutiny that isn’t “per se political:” In one e-mail exchange that began with a discussion of an article noting, “organizations woven by the fabulously rich and hugely influential Koch brothers,” Lerner told colleagues, “we do need a c4 project next year.”  While she initially says, “my object is not to look for political activity,” later in the exchange she acknowledges that it will examine political activity. “We need to be cautious so it isn’t a per se political project.  More a c4 project that will look at levels of lobbying and pol. Activity along with exempt activity.” – p. 17
  • Lerner broke IRS rules by mishandling taxpayer information:  While Lerner told Congress under oath, “I have not violated any IRS rules or regulations,” e-mails show Lerner handled protected 6103 taxpayer information in her nonofficial e-mail account. In a November 2013 letter from Daniel Werfel, Werfel notes, “We do not permit IRS officials to send taxpayer information to their personal email addresses. An IRS employee should not send taxpayer information to his or her personal email address in any form, including redacted.” – p. 33
  • Lerner planned to retire in October all along: While House Democrats have pushed that Lerner was forced out by the IRS as a result of the TIGTA report; new e-mails indicate that Lerner had planned an October retirement long before TIGTA released its report.  Her paid leave amounted to a paid vacation preceding her retirement – it does not appear that the IRS penalized her in any way for her conduct. – p.  40-41
  • Despite knowing about improper scrutiny, Lerner had IRS blame victims: An IRS document bearing Lerner’s signature shows that in March 2012, despite knowing about improper scrutiny at that time, Lerner reviewed and signed off on a response to Congress that blamed applicants for heightened scrutiny.  “[T]he IRS contacts the organization and solicits additional information when the organization does not provide sufficient information in response to the questions on the Form 1024 or if issues are raised by the application …. The revenue agent uses sound reasoning based on tax law training and his or her experience to review the application and identify the additional information needed to make a proper determination of the organization’s exempt status.” – p. 36
  • Concern Citizens United hurting Democrats:  Lerner believed the Executive Branch needed to take steps to undermine the Supreme Court’s Citizens United decision.  A senior advisor to Lerner e-mailed her an article about allegations that unknown conservative donors were influencing U.S. Senate races.  The article explained how outside money was making it increasingly difficult for Democrats to remain in the majority in the Senate.  Lerner replied:  “Perhaps the FEC will save the day.” – p. 21
  • Citizens United created pressure for IRS to “fix the problem”:  According to Lerner: “The Supreme Court dealt a huge blow, overturning a 100-year old precedent that basically corporations couldn’t give directly to political campaigns.  And everyone is up in arms because they don’t like it.  The Federal Election Commission can’t do anything about it. They want the IRS to fix the problem.” – p. 20
  • “Multi-Tier Review”:  Lerner personally directed that Tea Party cases go through a “multi-tier review.” An IRS employee testified that Lerner “sent [him an] e-mail saying that when these cases need to go through multi-tier review and they will eventually have to go to [Judy Kindell, Lerner’s senior technical advisor] and the Chief Counsel’s office.”  A D.C. IRS employee said this level of scrutiny had no precedent. – p. 24-25
  • Head of the IRS Cincinnati office’s testimony refutes Lois Lerner and President Obama’s O’Reilly interview assertion that this was all about a “local office”: “[Y]es, there were mistakes made by folks in Cincinnati as well [as] D.C. but the D.C. office is the one who delayed the processing of the cases.” – p. 44

Unless we are willing to live in a country where the laws are made and changed at will by whichever political party is in charge, Ms. Lerner has to be held accountable for her behavior. There is enough evidence against her to move forward with legal action. It is time to do that. Unfortunately, her behavior is typical of the Obama Administration’s disregard for the U.S. Constitution and the law.

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Hoping That The American Voters Are Either Stupid Or Forgetful

Yesterday the Daily Caller posted a story about the interview that Fox News’ Bill O’Reilly did with President Obama.

The interview included the following exchange:

The president also refused to acknowledge that the IRS illegally targeted tea party groups in the run-up to the 2012 election. “Absolutely wrong,” he said when O’Reilly broached the subject. “These kinds of things keep on surfacing, in part, because you and your TV station will promote them… We’ve had multiple hearings on it!”

“So you’re saying there was no corruption there at all?” O’Reilly asked.

“Absolutely not,” the president replied. “There were some bone-headed decisions out of a local office.”

“But no mass corruption?” O’Reilly persisted.

“Not even mass corruption,” a visibly-annoyed Obama replied. “Not even a smidgen of corruption.”

This is a very interesting contrast to a story filed by NBC News on May 13, 2013, which stated:

A partial draft report from the Treasury Inspector General for Tax Administration — obtained by NBC News — shows that top officials knew about the targeting nearly a year before then-IRS Commissioner Douglas H. Shulman, who was appointed by President George W. Bush, testified to Congress in March 2012 that no singling out of conservative groups ever occurred.

The House Ways and Means Committee announced after the president’s remarks that it will hold a hearing on the alleged targeting on Friday, May 17. Acting IRS Commissioner Steve Miller and J. Russell George, the Inspector General who headed up the IRS report, are expected to testify.

And the IRS confirmed Monday night that Miller was informed in May of last year that “some specific applications were improperly identified by name and sent to the [IRS] Exempt Organizations centralized processing unit for further review.”

In a statement earlier Monday, White House spokesman Jay Carney said the president is “concerned” about the reported conduct of “a small number of Internal Revenue Service employees.”

The investigation into the IRS is being done by a major Democrat party campaign donor.

On January 17 2014, Fox News reported:

Earlier this week, the Wall Street Journal reported that the FBI did not expect to file any criminal charges in connection with the IRS’s admitted, systemic, multi-year targeting of conservative nonprofits for improper scrutiny.

To be clear, the FBI made this decision without interviewing even a single one of the American Center for Law and Justice’s 41 targeted clients. And we’re not alone. Other Tea Party attorneys report their clients weren’t interviewed either.

Put simply, the FBI leaked its conclusions in a criminal investigation without even interviewing the victims of the potential crime.

So there was no crime. That conclusion was reached without interviewing any of the people who were targeted. This is the equivalent of refusing to interview a robbery victim and then claiming that since you did not interview the victim, there was no robbery.

Is the American voter that stupid? We will find out in November.

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It Really Is About Priorities

I have spent some time in the past week ranting about the cuts to the military pensions included in the budget deal. Every day the news about the deal seems to get a little worse. Today is no exception.

John Hinderaker posted an article at Power Line yesterday about another aspect of the budget compromise the Senate will be voting on in the next day or so.

The article explains one aspect of the budget negotiations in the Senate:

Harry Reid runs the Senate with an autocratic hand. One of his favorite tricks is called “filling the tree.” Reid will offer a series of amendments to legislation that “fill the tree,” making it impossible for any Republican amendments to be offered. In this way, Reid prevents Republicans from having any input into legislation and spares Democrats from having to vote against popular Republican initiatives.

Today, Reid filled the amendment tree on the Ryan-Murray budget to foreclose further amendments. Sessions wanted to propose an amendment to the spending bill that would delete the veterans’ benefit cuts and replace them by closing a loophole that allows illegal immigrants to suck billions of dollars out of the treasury.

So what is this loophole and how much does it cost? There is something called the Additional Child Tax Credit (ACTC). I have written about the ACTC before–rightwinggranny.com and rightwinggranny.com.  A person does not need to have a social security number or pay income taxes in order to receive money under this program. This program is known to be a source of income for people who are in America illegally.

The article reports:

According to a 2011 report by the Treasury Inspector General for Tax Administration, millions of people without valid Social Security numbers received a total of $4.2 billion in ACTC in 2010 – up from $924 million in 2005. The IRS is expected to issue some $7.4 billion in ACTC payouts this year.

The article concludes:

In order to allow his amendment to be heard, Sessions offered a tabling amendment to get rid of the filled amendment tree. That would have cleared the way for his amendment to be voted on, but the Democrats closed ranks on behalf of illegal immigrants and defeated Sessions’ motion on a nearly straight party line vote. The only Democrat to vote for the motion was Kay Hagan, who is up for re-election next year and evidently didn’t want to have to explain a “no” vote to her constituents.

Prioritizing illegal aliens over military veterans: that tells you all you need to know about the Democratic Party.

It is time to replace every current Congressmen who voted to defeat Jeff Sessions‘ motion. It is a disgrace that Congress would give money to people who are in America illegally before they would honor the promise America made to its soldiers when those soldiers enlisted.

 

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What Has Happened To The Country I Love?

Breitbart.com is reporting today that the Internal Revenue Service (IRS) passed the confidential applications for tax-exempt status of nine conservative groups to the progressive group ProPublica.

The article reports:

The same IRS office that deliberately targeted conservative groups applying for tax-exempt status in the run-up to the 2012 election released nine pending confidential applications of conservative groups to ProPublica late last year… In response to a request for the applications for 67 different nonprofits last November, the Cincinnati office of the IRS sent ProPublica applications or documentation for 31 groups. Nine of those applications had not yet been approved—meaning they were not supposed to be made public. (We made six of those public, after redacting their financial information, deeming that they were newsworthy.)

These people make Richard Nixon look like an amateur.

The article further reports:

On Friday, the House Ways and Means Committee is scheduled to hold a formal hearing on the IRS conservative targeting scandal. IRS Commissioner Steve Miller and Treasury Inspector General for Tax Administration J. Russell George are slated to testify.

At what point does someone other than the lower level employees take responsibility for these actions?

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About That Tax Policy Thing…

Yesterday wthr.com, an Indiana television station, posted an article about a tax loophole that it costing Americans billions of dollars–it doesn’t involve ‘evil’ corporations or the ‘evil’ rich–it involves a simple IRS tax policy toward legal and illegal aliens who are working in America.

Please watch the video at the link above to hear the entire story. Essentially what is happening is that non-Americans who are working in America are issued an ITIN, an individual taxpayer identification number. A 9-digit ITIN number issued by the IRS provides both resident and nonresident aliens with a unique identification number that allows them to file tax returns. This number is issued to both legal and illegal aliens.

The article reports:

Each spring, at tax preparation offices all across the nation, many illegal immigrants are now eagerly filing tax returns to take advantage of a tax loophole, using their ITIN numbers to get huge refunds from the IRS.

The loophole is called the Additional Child Tax Credit. It’s a fully-refundable credit of up to $1000 per child, and it’s meant to help working families who have children living at home.  

But 13 Investigates has found many undocumented workers are claiming the tax credit for kids who live in Mexico – lots of kids in Mexico.

“We’ve seen sometimes 10 or 12 dependents, most times nieces and nephews, on these tax forms,” the whistleblower told Eyewitness News. “The more you put on there, the more you get back.”

Some of the tax refunds generated by this practice have reached $30,000. I wonder if $30,000 was paid in taxes in the first place.

The article posted a statement from the IRS regarding this matter:

Full statement to WTHR from the Internal Revenue Service

The law has been clear for over a decade that eligibility for these credits does not depend on work authorization status or the type of taxpayer identification number used. Any suggestion that the IRS shouldn’t be paying out these credits under current law to ITIN holders is simply incorrect. The IRS administers the law impartially and applies it as it is written. If the law were changed, the IRS would change its programs accordingly. The IRS disagrees with TIGTA’s recommendation on requiring additional documentation to verify child credit claims. As TIGTA acknowledges in this report, the IRS does not currently have the legal authority to verify and disallow the Child Tax Credit and the Additional Child Tax Credit during return processing simply because of the lack of documentation. The IRS has procedures in place specifically for the evaluation of questionable credit claims early in the processing stream and prior to issuance of a refund. The IRS continues to work to refine and improve our processes.

Why do I have the feeling that if I start listing my nieces or nephews on my tax return, the IRS will pay me a visit?

 

 

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Something To Keep In Mind As We Discuss The Deficit

One of the problems with our deficit is that the government does not always spend money wisely. Occasionally they do, but as with any large organization, mistakes are made. We could cut some of our deficit simply by being more efficient and avoiding stupid mistakes. Speaking of stupid mistakes…

Hot Air is reporting today that illegal aliens not authorized to work in the United States collected $4.2 billion in tax refunds from the Internal Revenue Service. This number is the result of an audit by the Treasury Inspector General for Tax Administration (TIGTA). The article reports:

Many individuals who are not authorized to work in the United States, and thus not eligible to obtain a Social Security Number (SSN) for employment, earn income in the United States.  The Internal Revenue Service (IRS) provides such individuals with an Individual Taxpayer Identification Number (ITIN) to facilitate their filing of tax returns.  Although the law prohibits aliens residing without authorization in the United States from receiving most Federal public benefits, an increasing number of these individuals are filing tax returns claiming the Additional Child Tax Credit (ACTC), a refundable tax credit intended for working families.  The payment of Federal funds through this tax benefit appears to provide an additional incentive for aliens to enter, reside, and work in the United States without authorization, which contradicts Federal law and policy to remove such incentives.

The article goes on to explain that the IRS says it does not have the authority to deny the claims. I don’t mean to be difficult here, but shouldn’t Congress (or even President Obama) be doing something about this? Isn’t that their job?

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