Tuesday, April 29, 2008

A Less Tolerant IRS Claims Benefits Exceeded Costs

The Treasury Inspector General for Tax Administration announced that the Internal Revenue Service audited nine percent more tax returns in 2007 (vs. 2006) and that revenue from enforcement activities went up 22% or about $10 billion. Levies and collections on past-due accounts also increased during the year. This continues a trend which has been occurring since 2000; the likelihood of audit for an individual return has doubled during that period. Audits of corporate returns have been had a much slower rate of increase--and in fact have decreased in likelihood since the late 1990s.

I have mixed emotions about IRS audits; on one hand, it is important to protect honest taxpayers by looking for scofflaws; on the other hand, increased IRS auditing virtually by definition is an evidence of greater government power and as such at least a mild threat to American freedom. The ultimate cure--less government influence and control of the economy. Unfortunately this looks like a pipe dream; the Republicans sold out early this decade and may or may not have learned a lesson from 2006; the Libertarian party has no organization or power and does anybody really think that either the Democratic or Green Party have any desire to control in any substantive way big government?


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