REVIVING THE IRS….One of the great scams of the 90s was the Roth Hearings, a brilliant piece of performance art staged by Senator William Roth as an attack on the Internal Revenue Service. The hearings were deliberately dramatic: Roth held them in a committee room designed to block electronic eavesdropping and had guards search everyone before they entered the chamber. IRS employees called as witnesses were blocked by black curtains and had their voices electronically altered, like mobsters afraid of being murdered in their sleep.
The testimony was equally dramatic: IRS agents, they said, routinely made false accusations against people, busted into people’s homes and waved guns in their faces, and once even forced a girl caught in a raid to change her clothes while agents watched.
As it happens, virtually none of this was true, but that didn’t matter. Republicans lined up to denounce the IRS as “Gestapo-like” and a law was quickly passed that handcuffed agents and slashed the budget for audits and enforcement, especially against high-income taxpayers. It was a boon for the rich in the same way that it would be a boon for drug dealers and street criminals if Congress slashed the budgets of local police departments.
Today the Wall Street Journal reports that the high times are slowly coming to an end. Continuing a trend started belatedly by his predecessor, IRS Commissioner Mark Everson is cracking down:
Last year the IRS audited nearly 200,000 high earners (people earning $100,000 or more a year), double the number audited four years earlier. Since 2004, the IRS has collected nearly $4 billion under a settlement initiative that required the full payment of taxes plus penalties. All told, collections from increased enforcement measures rose 15% last year to a record $43.1 billion from the year before.
….Mr. Everson’s tougher position reflects concern about the widening tax gap — the difference between the taxes owed by corporations and individuals and the actual amounts collected. The gap was nearly $353 billion in 2001, the last year it was calculated. That is more than twice the amount in 1981 and three times the amount in 1973, calculated in 2001 dollars.
This is good news. The Roth Hearings were little more than hocus pocus designed to allow the rich to evade tax laws by the simple expedient of making tax laws impossible to enforce. It’s about time to let them know they’re expected to obey the same laws as the rest of us.