Related Posts

Don’t Worry, the IRS isn’t Getting Too Soft

IRS_logo-thumb-150x140.jpgIn 2004, Congress wanted to lay the smackdown on individuals and entities using tax shelters. In order to scare the beejesus out those thinking about the practice, Congress enacted penalties of $100,000 for individuals and $200,000 for entities per non-disclosure to the IRS.
Problem is, Congress, who often pulls out the jump to conclusions mat, didn’t give the IRS any discretion on enforcement so Mom & Pop (who often don’t have kids) shops were getting hammered with fines they couldn’t pay:

In one case cited by the Small Business Council of America, a husband and wife followed the advice of a consultant and set up a limited liability company and Roth individual retirement accounts. When the IRS challenged the way the transactions were done and found income tax deficiencies of $6,812, it was required to impose a penalty of $1.2 million.

The IRS figured that maybe, just maybe, this wasn’t really working the way it was intended and has suspended the collection of fines in order to make the penalties more proportional. Not to worry though, the IRS hasn’t decided whether or not apply the changes retroactively and are only suspending the fines until September 30. They wouldn’t want to tarnish their image as faceless cold-blooded bureaucrats.
IRS Halts Fine Linked To Tax Shelters [WSJ]

Eric Cantor Will Not Be Entertaining Any of This Talk of Compromise on Tax Cuts

The presumed next Majority Leader in the House has gone on the record (with Fox News no less) that any pragmatism on the President’s part will be slapped away like a homeless vet’s outstretched hand:

The Obama administration’s hopes of reaching a tax deal with Republicans that would decouple rates on the rich from the middle class appear dead.

House GOP Whip Eric Cantor (Va.) threw cold water on the proposed plan, which would temporarily extend tax cuts for the wealthy while permanently extending tax cuts for the middle class. “Taxes shouldn’t be going up on anybody right now,” Cantor said.

So, in other words President Obama, you can take any of this “compromise” talk and stick it in your tea because that’s what was mandated by the people:

“This election … was really the American people saying they are tired of the lack of results in Washington,” he said. “They want to see more jobs for more Americans. They want to see us … cut government spending, rein in the size of government so we can get this economy growing again. That was the prescription, that was the mandate that came from the people.”

So a fair amount of ellipsises there, so maybe he’s not exactly sure what he’s saying but Cantor is a fool if he thinks that “cutting government spending” and” reining in the size of government” is not part of the GOP agenda despite what Paul Ryan writes in the Financial Times.

Security Agency spending seems to be a pretty big piece of the shopping spree; doesn’t it make sense to start there? If not, are we going to continue buying predator drones on the credit card and cut education again since raising taxes is absolutely out of the question?

Cantor, Republicans signal Obama tax proposal is dead in the water [The Briefing Room/The Hill]