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A Republican Plan to Audit the Poor

By TChris, Section Huricanes Katrina and Rita
Posted on Thu Sep 22, 2005 at 01:56:48 PM EST
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by TChris

This would be funny if it weren't true. Joel Achenbach calls attention to a Republican proposal to find the money that will be needed to help Hurricane Katrina victims: audit the tax returns of poor people to make sure they qualify for the earned income tax credit. Why doesn't the GOP want to audit the rich, or close the myriad loopholes that allow corporations and the nation's wealthiest citizens to avoid tax liability?

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    A Republican Plan to Audit the Poor | 27 comments (27 topical)
    Re: A Republican Plan to Audit the Poor (none / 0) (#1)
    by Talkleft Visitor on Sat Dec 17, 2005 at 01:04:12 PM EST
    "Why doesn't the GOP want to audit the rich?" Cuz they need all that extra money to back GOP election campaigns and to pay for the secret investigations of high ranking Democrats.

    Re: A Republican Plan to Audit the Poor (none / 0) (#2)
    by ras on Sat Dec 17, 2005 at 01:04:12 PM EST
    If there is indeed massive fraud, then the money is not going to those most in need, is it?

    Re: A Republican Plan to Audit the Poor (none / 0) (#3)
    by squeaky on Sat Dec 17, 2005 at 01:04:12 PM EST
    Some one has to pay for all those million dollar condos built by Haliburton that will replace the NO skyline.
    ....They say we need to pay for reconstruction not by asking the wealthiest to sacrifice just a little bit, but by massive cuts to spending. And now we see what that means: The Navy Times today reports that those cuts "include trimming military quality-of-life programs, including health care" . . . This, while troops are fighting and dying for our country in Iraq. The Republicans have put their cutting efforts in military terms, calling it "Operation Offset" - a further insult to the men and women in uniform they are now trying to screw over. The specifics are ugly....
    link via Armondo at dailykos.

    Re: A Republican Plan to Audit the Poor (none / 0) (#4)
    by Joe Bob on Sat Dec 17, 2005 at 01:04:13 PM EST
    It seems that if one really wanted to increase tax revenue one would look for it where the money is, i.e.: wealthy people and businesses. Of course, one reason those of means don't get audited or otherwise harassed by the IRS is that they have the means to obscure their finances in the first place and then fight back if they come under scrutiny. I don't know about you other salary-earners, but every dime of my income and retirement savings gets reported directly to the IRS. If you draw a paycheck, the only way I can think of to cheat on the EITC is to fake your dependents. Granted I've never tried it, but fake dependents seems difficult to pull off for very long. Ergo, I can't see EITC fraud being very common. Meanwhile, I wonder how many working poor you would have to audit to net as much revenue as you would get from one multimillionaire or corporation that played loose with the tax code. 50? 100? 1000?

    Re: A Republican Plan to Audit the Poor (none / 0) (#5)
    by Talkleft Visitor on Sat Dec 17, 2005 at 01:04:13 PM EST
    That's just another expression of radical Christian right wing hatred of the poor. The rich don't have to be audited because they've obviously been blessed by God.

    Re: A Republican Plan to Audit the Poor (none / 0) (#6)
    by Dadler on Sat Dec 17, 2005 at 01:04:13 PM EST
    Ras, If you actually think this "fraud" is anything compared to that of the wealthy in this country, then God help you. You'd probably have arrested people looting food in New Orleans because the food was going to people we could verify were actually the hungriest. I lived on welfare and food stamps, dude, when I was a tot in the ghetto. Yeah, there were times when my single mom made a few dollars over the limit and didn't report it. She thought feeding her child more important.

    Re: A Republican Plan to Audit the Poor (none / 0) (#7)
    by Dadler on Sat Dec 17, 2005 at 01:04:13 PM EST
    That should read "people we COULDN'T verify were the hungriest".

    Re: A Republican Plan to Audit the Poor (none / 0) (#8)
    by aw on Sat Dec 17, 2005 at 01:04:13 PM EST
    About 20+ years ago, when my son was small, I got EITC for a couple of years until my income became too high for it. It was a really welcome shot of money. I think it might have been like $400 or so. I thought it was only fair because I couldn't take any deductions like mortgage interest, like people who made enough to afford a house.

    Re: A Republican Plan to Audit the Poor (none / 0) (#9)
    by Kitt on Sat Dec 17, 2005 at 01:04:13 PM EST
    If there is indeed massive fraud, then the money is not going to those most in need, is it?
    Well, ras - I would think as a Canadian citizen and all, this is really none of your business, now is it? Unless you're contributing to the federal gov't of the U.S. out of some misplaced generosity - which I'm sure isn't happening. 'Massive fraud' - I say we start working from the top down, beginning with this administration.

    Re: A Republican Plan to Audit the Poor (none / 0) (#10)
    by cpinva on Sat Dec 17, 2005 at 01:04:13 PM EST
    this isn't new, there was a program in place a few years ago to identify and audit returns claiming the EITC, one of the few refundable credits. actually, there are other ways, aside from claiming excess dependents, to fraudulently claim the EITC: 1. create fake tax returns, with fake w-2's, wages, etc., along with the fake dependents. this is actually the most common scam, run by everyone from convicts in prisons, to the local "preparer", who then takes a cut of the refund check as his/her fee. these are the most cost efficient scams to audit: you get a whole bunch of returns at a whack, it's the same adjustment for each, same report, etc. these audits are, for the most part, correspondence audits, done by mail. along with getting the credit back, there are also interest and penalty assessments, in many cases well exceeding the original refund amount. once in a while, if the scam is particularly egregious (ie: huge), there will be criminal charges filed as well. why does this work? simply put, it's because congress mandates that refunds be made in a timely manner, or interest be paid. paying interest on untimely refunds doesn't look good for the managers of the SC's, so audits are done after the refund is made, not before. add to that the archaic computer system the IRS has, making it nearly impossible to instantly match EINS/SSNS to the returns and w-2's as they're filed, and congress has created a situation ripe for the plucking.

    Re: A Republican Plan to Audit the Poor (none / 0) (#11)
    by Talkleft Visitor on Sat Dec 17, 2005 at 01:04:13 PM EST
    Is it true that Haliburton received a $50 Billion no bid contract to clean up New Orleans? If this is true then why isnt someone complaining?

    Re: A Republican Plan to Audit the Poor (none / 0) (#12)
    by john horse on Sat Dec 17, 2005 at 01:04:14 PM EST
    Tax cuts for the rich. Audits for the poor. Just think of George Bush as Robin Hood in reverse.

    Re: A Republican Plan to Audit the Poor (none / 0) (#13)
    by kdog on Sat Dec 17, 2005 at 01:04:14 PM EST
    In a word...typical. The GOP has the Leona Helmsley mindset...."Only poor people pay taxes"

    Re: A Republican Plan to Audit the Poor (none / 0) (#14)
    by Dark Avenger on Sat Dec 17, 2005 at 01:04:14 PM EST
    There was a ring of folks who used fake W-2s to file false income tax returns here in Terra Bella, CA and later in other places around the S.J. Valley. The total take was a cool million, although about 10 or 12 folks were involved. so audits are done after the refund is made If there is an audit that results in disqualification of the EITC credit, then the IRS demands repayment, and the taxpayer is declared ineligible for the EITC in future years unless they file a certain form and provide certain documents to prove that they qualify to the IRS. That said, it's probably more effective to go after one guy who owes 100K dollars(and probably has assets that can be seized to satify the bill) than 100 folks who each owe 1000 bucks, and some, if not most of them, are unable to pay it up in a lump sum, and usually pay by installments if they have income to pay the installments with.

    Re: A Republican Plan to Audit the Poor (none / 0) (#15)
    by Talkleft Visitor on Sat Dec 17, 2005 at 01:04:14 PM EST
    Let's look at this from a common sense cost/benefit POV. Is it a more economical use of limited IRS resources to: 1) Spend thousands of man hours investigating claims that might end up with, at most, a couple of grand from people who will likely not pay, as they can't afford it? 2) Spend thousands of man hours investigating claims (i.e. corporate and upper income) that might end up revealing tens or hundreds of thousands in tax frauds, from people and entities that actually have the money Govt. could recover? I'm pretty sure most wingnuts pick option 1.

    Re: A Republican Plan to Audit the Poor (none / 0) (#16)
    by kdog on Sat Dec 17, 2005 at 01:04:14 PM EST
    You are looking at it all wrong guys, cost/benefit isn't a concern to the GOP. As far as the GOP is concerned, it's a question of "us" or "them". The rich are one of "us", so let's go after "them" (poor/middle class).

    Re: A Republican Plan to Audit the Poor (none / 0) (#17)
    by jimakaPPJ on Sat Dec 17, 2005 at 01:04:14 PM EST
    kdog writes:
    The GOP has the Leona Helmsley mindset...."Only poor people pay taxes"
    Actually, a family of four pay no FIT on income of up to approx. $38,200. et al - If you want "fair" go to a national sales tax, and exclude food, housing, utilities, medical and certain clothing items from taxes.

    Re: A Republican Plan to Audit the Poor (none / 0) (#18)
    by Talkleft Visitor on Sat Dec 17, 2005 at 01:04:14 PM EST
    Jim, You're forgetting that the family in your example pays very heavy payroll taxes for social security and medicare on dollar one of the their income. And the payroll taxes stop at about $90K, the result being that most of the income of the wealthy does not contribute to social security or medicare.

    Re: A Republican Plan to Audit the Poor (none / 0) (#19)
    by Dark Avenger on Sat Dec 17, 2005 at 01:04:14 PM EST
    Actually, a family of four pay no FIT on income of up to approx. $38,200.
    PPJ, you've really stuck your foot in it this time. I'm sure that there are many families of four that end up paying no tax at that income level because of having one or two IRAs, itemize, pay for child care outside the home, etc. You've made an unqualified statement. Therefore, I'll take the case of a 'vanilla' family of four that had 38,200$ in income. The standard deduction is $9,700, and the personal exemption is $3,100 per person included in the return. $12,400 + $9,700 = $22,100 Of course, if there are one or two family members who qualify the family for EITC money, they would have a nice chunk of change for a refund check. So, if the '38Ks' had nothing they could use to reduce their taxable income or tax on the return(they make too much for EITC, remember), they would end up with a taxable income of 16,100, which tax is much greater than 0. I think someone sold you a bill of goods and the receipt seems to have been written in disappearing ink........ Now, if you want to say that on average, a family of 4 doesn't pay FIT until the figure you mentioned, that is a horse of a different color, and you no doubt can link to a site where the facts and logic behind such an assertion is avaliable for all to see. TTFN

    Re: A Republican Plan to Audit the Poor (none / 0) (#20)
    by jimakaPPJ on Sat Dec 17, 2005 at 01:04:15 PM EST
    DA - Let's see... $38200 income, family of 4... $16100 taxable income, taxes owed $1700... now proceed to Child Tax Credit Worksheet....page 37 1040 Instruction Booklet... do form ..... child tax credit is $1700.... Tax of $1700, Tax credit of $1700. TAXES OWED - ZERO - NONE - NOTHING What business did you say you were in?

    Re: A Republican Plan to Audit the Poor (none / 0) (#21)
    by jimakaPPJ on Sat Dec 17, 2005 at 01:04:15 PM EST
    Larry L - Nope, I am not forgetting. I specified FIT. As for Social Security and Medicare, these are mandated retirement payments. As such I don't see them as taxes. They are not means tested, and SS payments are based on amount paid in. If you think this is screwed up, as I do, perhaps you will join me in pushing for National Health Care and SS reform.

    Re: A Republican Plan to Audit the Poor (none / 0) (#22)
    by Dark Avenger on Sat Dec 17, 2005 at 01:04:15 PM EST
    Actually, a family of four pay no FIT on income of up to approx. $38,200. Funny, you didn't say anything about whether or not the other two people in the family of four are eligible to be covered under the Child Tax Credit or not. And if you look at the Child Tax Credit, you'll see that it only applies if the two family members are under the age of 17, which you didn't specify in your orignal statement. If there were a family with an 18 and 19 year-old as the two children, my scenario would hold. Or if the other two members are siblings or relatives above the age of 17. That's the problem with making statements that are too broad, they catch up to you. TTFN, Whizzle.

    Re: A Republican Plan to Audit the Poor (none / 0) (#23)
    by jimakaPPJ on Sat Dec 17, 2005 at 01:04:15 PM EST
    DA writes:
    So, if the '38Ks' had nothing they could use to reduce their taxable income or tax on the return(they make too much for EITC, remember),
    Ho hum. Too bad you didn't note the credit in your original response. You had to be reminded of it, I guess. What business did you say you are in?

    Re: A Republican Plan to Audit the Poor (none / 0) (#24)
    by Dark Avenger on Sat Dec 17, 2005 at 01:04:16 PM EST
    Ho hum. Too bad you didn't note the credit in your original response.
    If there is an audit that results in disqualification of the EITC credit, then the IRS demands repayment, and the taxpayer is declared ineligible for the EITC in future years unless they file a certain form and provide certain documents to prove that they qualify to the IRS.
    Posted by The Dark Avenger at September 23, 2005 09:41 AM In case you didn't know, PPJ, EITC is the acronym of Earned Income Tax Credit, so I was discussing it in my first post. LOL, PPJ, I prove your general statement false, then you attempt to get into side issues while digging your hole deeper and deeper. TTFN, Whizzer.

    Re: A Republican Plan to Audit the Poor (none / 0) (#25)
    by jimakaPPJ on Sat Dec 17, 2005 at 01:04:16 PM EST
    DA - You never mentioned child tax credit, you mentioned EITC. Quit trying to change the subject. My point was valid and straight forward, followed with a social liberal comment that if you want fair we need to go to a sales tax with certain things excluded. Instead of engaging a debate about fair, or the audit, you get into a snit over trying to prove me wrong. Nice. Nice.

    Re: A Republican Plan to Audit the Poor (none / 0) (#26)
    by Dark Avenger on Sat Dec 17, 2005 at 01:04:16 PM EST
    You never mentioned child tax credit, you mentioned EITC. You used the word credit in your excerpt from my post which included EITC, so I don't know where you get off blaming me for your sloppiness. If I didn't know what you were talking about, it's a state of mind I seem to share with you all too frequently these days.
    My point was valid and straight(-)forward, followed with a social liberal comment that if you want fair we need to go to a sales tax with certain things excluded.
    No, PPJ, your original point was too broad a statement to be true as it stood. If you had posted about a family of four with two children under the age of 17, then your point would've been correct. Instead, you make a general statement without researching it, and now you squeal like a stuck pig, when I (along with everyone else, I guess )'should' have known that the family of four you were talking about didn't pay any tax because of the CTC(that's the acronym for Child Tax Credit, btw). Instead of engaging a debate about fair(?), or the audit Which I did by using the scant info you gave me in your original statement. you get into a snit over trying to prove me wrong. Nice. Nice. I have proven you wrong. Your original unmodified statement is wrong. If you had been honest and/or careful to modify your statement to reflect the situation you were thinking of, you wouldn't be howling like a pack of wolves under a full moon. as the kids would say:
    I have told you before, n doubtless wiznill hizzy ta reference this thread ta tizzay you at some time in tha future, tizzle if you makes a dumba** mistake, n I ciznatch(catch) you at it, I will post `bout it so bow down to the bow wow.
    BTW, et al: This is from the same guy who had a nice comment here, before he had to trumphet his poker playing 'expertise' to us in every post:
    Your lack of understanding of this situation is exceeded only by the uniqueness of your name.
    Posted by Jim at November 14, 2003 11:35 PM Nice, nice. Link Read the whole thing folks, don't let me mislead you about PPJ, he tries to do that himself and fails miserably most of the time. TTFN, Whizzle.

    Re: A Republican Plan to Audit the Poor (none / 0) (#27)
    by Talkleft Visitor on Sat Dec 17, 2005 at 01:04:16 PM EST
    Yep. Prove JIM wrong and he cries about how "mean" everyone is being. I expect similar treatment for calling him out on a fundamental failure of logic over in the "Friday open thread" anytime. And my response will be about the same as yours, TDA.

    A Republican Plan to Audit the Poor | 27 comments (27 topical)