On Monday, a story appeared in CNN reporting that routine traffic stops in North Miami Beach, Fla., frequently find evidence in the vehicle of tax fraud. The police estimate that close to $450 million has been drained from the treasury over the past two years by people with lists of names, Social Security numbers and birthdates. Some criminals file hundreds of fraudulent returns in others’ names and have the “refund” sent to anonymous Visa cards. When the real person files, it can take years to sort out the mess, but the IRS won’t send them a refund before then.
But on Tuesday, the IRS announced an effort to crack down on tax fraud by corporations that transfer assets among subsidiaries. IRS said they might even notify the police. Most tax professionals say the agency has little chance of succeeding: Valuing intellectual property moved from one country to another is very difficult, and that’s what the argument is about.
This is the fourth year that police in North Miami Beach have been begging the IRS to help stop the fraud, by reviewing electronic filings. No can do. The IRS says they have to get the refunds out quickly, and lots of people who file don’t have a bank account, so they need the Visa cards.
So when the police beg for help four years in a row, the IRS can’t be bothered. But when IRS accountants are engaged in an argument about intellectual property valuations, they’re going to report that to the police?
Now jump forward a year or two, should the Supreme Court decide that the Commerce Clause is the only part of the Constitution that matters, and uphold Obamacare.
How will this work when the IRS pays a fraudulent medical billing in my name for an operation I never had, but later need? “Sorry, our records show you had that operation three years ago, and it is limited to once in your lifetime.”
They’ll probably report me to the police for fraud. Maybe each old-folks home will have its own police sub-station. Geriatric police officers could arrest us and move us to a different room in the facility. And meanwhile, the career criminals in Florida will still be collecting refunds on all the old folks being investigated by police for medical fraud.
During most of my life, politicians have been very successful in convincing us that the bureaucracy is filled with incompetent, stupid people, and we need the politicians to fix things like this. Vote for me! I’ll fix it!
Well, guess what? We voted for them, but they haven’t fixed it.
Maybe the IRS is simply doing the bidding of its political masters in the executive and Congress. “Get the tax refunds out now! It might help the economy, and if there is fraud it will help the economy all the more! I want to be re-elected!”
Regarding corporations, politicians are a lot like Willie Sutton, who when asked why he robbed banks responded, “Because that’s where the money is!”
Corporations buy influence. Politicians buy re-election ads. And big media pockets the money. You and I pay for it. It’s a nice racket if you live in D.C. and don’t care about the rest of the nation.
But don’t despair! Romney, should he be fortunate enough to be elected, will get those incompetent bureaucrats whipped into shape!
