Monday, April 11, 2011

From Joe's Vault: IRS Tax Gestapo Loves To Pick On Poor People

Originally posted in April 2007.
By Manifesto Joe
"... In 1976, my mother owed $300 in taxes. They were not paid due to the fact that she was diagnosed with cancer and given 12 weeks to live. In May, as she lay dying, two IRS agents showed up at my house where we had moved my mother to take care of her. They told me they were friends and had come to visit. I took them to the room, where they introduced themselves as IRS agents and served her papers to confiscate everything she owned. She was to (sic) weak to sign the paper but did make an X and I signed for her. On that day, they took everything she owned ... even the soda bottles at her place of business! She died within the week. ..."
-- IRS Abuse Report #193, from
Those were supposed to be the bad old days of the IRS. After countless complaints like this, in the late '90s there was a bid to reform the service into something BusinessWeek called, a bit facetiously, a "kinder, gentler IRS." The Internal Revenue Service Restructuring and Reform Act of 1998, signed by President Clinton, was gauged to make "significant structural changes in the management and oversight ..." and strengthen and enhance "the rights of and protections applicable to taxpayers ..."
There were a few meaningful changes in the new law. But it didn't take long for the IRS to revert to stonefaced abuse of poor and financially distressed taxpayers -- while ignoring most of the cheating by the rich.
Under the Bush regime, the working poor have come under special attack over their claims of the Earned Income Credit. This is an especially valuable tax credit for people coming off the welfare rolls and into the low-wage job market, because it can bring a refund of all income tax and Social Security tax withheld from their paychecks. The bottom line: This credit is an incentive for welfare recipients to go to work. Wasn't that what the Right-Wingers wanted when they "reformed" welfare in 1996?
But, being a conservative means never having to say you're sorry. In the conservative world, the poor are a sub-species, basically faceless and worthless. If people are poor, then they must be lazy, drink too much and gamble, rent their kids to pedophiles, or such. It most certainly has to be their fault; and if you honestly try to help them, I'm told that they'll spend the money on a console and play Nintendo all day. So, as the thinking on the Right goes, we might as well kick this sort of gutter trash around a whole lot more.
So, this is where the IRS comes in. David Cay Johnson reported in this story, first published by the New York Times on Jan. 10, 2006, that:
Tax refunds sought by hundreds of thousands of poor Americans have been frozen and their returns labeled fraudulent, blocking refunds for years to come, the Internal Revenue Service's taxpayer advocate told Congress today.
The taxpayers, whose average income was $13,000, were not told that they were suspected of fraud, the advocate said in her annual report to Congress. The advocate, Nina Olson, said her staff sampled suspected returns and found that, at most, one in five was questionable.
A computer program selected the returns as part of the questionable refund program run by the criminal investigation division of the Internal Revenue Service. In some cases, the criminal division ordered that taxpayers be given no hint that they were suspected of fraud, the report said.
Most of the poor people whose returns the computer flagged as fraudulent were seeking the earned income tax credit, a benefit for the working poor. The credit can return all of the income taxes and Social Security taxes withheld from the paychecks of poor people. Without the credit, many poor people coming off welfare and going to work would receive less money because of taxes taken out of their paychecks and the loss of health benefits, I.R.S. data and other government documents show.
The average refund sought was $3,500, which under the rules for obtaining the credit means that the vast majority of those suspected of fraud were single parents or married couples with children. The maximum benefit for singles is less than $400.
Ms. Olson said the I.R.S. devoted vastly more resources to pursing questionable refunds by the poor, which she said cannot involve more than $9 billion, than to a $100 billion problem with unreported incomes from small businesses that deal only in cash, many of which do not even file tax returns.
Let's forget any discussion of "small" businesses here. And, going into the way the rich and corporate giants get by without paying taxes is a whole different post. There isn't nearly enough room here.
Suffice it to say that some of us know what this is about, from schoolyard memories. It's a lot easier to pick on little kids than to take on the big ones. The IRS is just one of many bully magnets in our society. I haven't got time or space to describe all the others. It is merely one manifestation of a rising bully culture. And conservatives seem to be leading the swagger.
Manifesto Joe Is An Underground Writer Living In Texas.


Jack said...

Our tax code has become steadily more regressive. Corporations have successfully shifted a huge amount of what they owe onto individual income taxes and the rich have been gaming the system for far too long. IT IS TIME TO REINSTATE EISENHOWER-ERA TAXES ON CORPORATIONS AND THE WEALTHY, AND THIS TIME WITHOUT ANY LOOPHOLES!

Goodbye, deficit. Hello, new infrastructure work and workers. Goodbye, Great Recession! Hello, prosperity for ALL instead of just the few!

Cletis L. Stump said...

Joe, it's good to see you back. I hope you are well. Son, you sure pour a lot of emotion onto a simple sheet of paper. I hope you have or will publish some of your posts from over the years. Here's a small post a friend put up Sunday regarding his elderly mother.

Anonymous said...

Too bad the Tea Party and their corporate masters want to make what's left of the Middle Class into MORE poor people to sh@t on and financially milk. No wonder the rest of the 1st World laughs at and/or pities us. Just look at what the "best" of us do to the least. Didn't Jesus have a problem with that societal behavior in his time?

Manifesto Joe said...

Hi to all:

I've been taking time off for bereavement, as I mentioned before. But with Obama's speech this week, the tax issue seems like something that neither he nor his foes nor the MSM are taking on honestly. I will have a current post on the issue very soon.