The Internal Revenue Service Backs Down

The Wall Street Journal posted an article yesterday about a proposed change to charitable donation reporting to the Internal Revenue Service (IRS). The IRS had proposed a change to the law that would have given charities the ‘option’ of filing detailed reports on everyone who donates more than $250 to the charity. The detailed reports were going to be ‘voluntary’ (at least until the IRS was able to put them into law). The information reported would have included Social Security numbers. The Wall Street Journal is now reporting that the IRS has withdrawn the proposal.

The article reports:

Amazingly enough, in this case the IRS appears to have listened to concerns from the taxpayers who pay their salaries. On Thursday the IRS said it is withdrawing its proposal after receiving “a substantial number of public comments.” Many of the comments “questioned the need for donee reporting, and many comments expressed significant concerns about donee organizations collecting and maintaining taxpayer identification numbers for purposes of the specific-use information return,” said the IRS. The legitimate anger of average citizens was amplified by stalwart IRS watchdogs like Rep.Jim Jordan (R., Ohio) on Capitol Hill.

One year after Republicans took control of the Congress, and one year before President Obama leaves the White House, the pendulum is beginning to swing against IRS abuse of taxpayers. Coming on the heels of other reforms in the year-end tax and spending bills—including a ban on new IRS rules limiting political activity—Thursday’s news is reason to cheer.

Now if we could just get rid of the IRS, we would have something.

The infoplease website reminds us:

In 1913, the 16th Amendment to the Constitution made the income tax a permanent fixture in the U.S. tax system. The amendment gave Congress legal authority to tax income and resulted in a revenue law that taxed incomes of both individuals and corporations. In fiscal year 1918, annual internal revenue collections for the first time passed the billion-dollar mark, rising to $5.4 billion by 1920. With the advent of World War II, employment increased, as did tax collections—to $7.3 billion. The withholding tax on wages was introduced in 1943 and was instrumental in increasing the number of taxpayers to 60 million and tax collections to $43 billion by 1945.

It is interesting to me that the American government was able to fulfill its Constitutional duties prior to 1913 without the billions of dollars they now collect and spend. What are they doing now that has changed that? Do we need to go back to a government that follows the instructions and limitations of our Constitution? I think that would be a really good idea.