Public Comment

1. According to the Republicans in Congress, the auditing practices of the Internal Revenue Service (IRS) are much too harsh on the big corporations and the wealthy. So to reduce the number of audits of those with lots of money, Congress has cut the budget every year for the last eight years. But have these cuts really been significant? Yes, indeed. Since 2010 there has been 675,000 fewer audits. That is a whopping 42 percent reduction. As the IRS auditing continues to decline every year the news gets better for the rich.  

2. If an audit is not made within 10 years after a tax return is submitted, the right to audit that submission expires. This problem has become more frequent because cutbacks in auditors has resulted in a growing backlog. In 2010, 482 million dollars in tax debt had lapsed. By 2017 that figure had risen to $8.3 billion. That’s 17 times as much than in 2010.  

3. What can be done to halt this theft? The most appropriate solution is for Congress to take Bernie Sanders advice, which is to legally prohibit business from deferring their tax obligations. Isn’t that much better than continuing to allow the wealthy an open invitation to cheat?  

4. Even more costly in lost taxes is that 80 percent of the large corporations place their profits abroad, which legally exempts these companies from paying income tax in the United States. In these tax haven countries the taxes are either very low or do not exist. The amount stored abroad is 1,3 trillion dollars (that’s over a thousand billion). The cost to the public is enormous. If, for example, the pharmaceutical industry had paid their taxes instead of avoiding their obligations, that money could have covered the cost of health insurance for almost one million poor children.  

5. Because of tremendous pressure from Republicans in Congress, the IRS has acknowledged that it is has become too difficult and often impossible to audit major corporations and the wealthy. In fact, millionaires are now 80 percent less likely to be audited than in 2011.  

6. Then what alternative does the IRS have? Unfortunately for low income workers, the IRS has been shifting resources to auditing the working poor. That’s fine with the Republicans and it is much easier and less expensive for the IRS. So low income workers are now being audited at about the same rate as the wealthiest 1 percent. Moreover, a person is more likely to be audited by those whose annual earnings are $20,000 rather than $400,000.  

7. Incredibly, the most heavily audited county in the country is Humphreys County, which is an impoverished rural county in Mississippi. And the racial group that is most likely to be audited is African Americans.  

8. So what can be done to overcome the inequality and prejudice that characterize American tax practices? The problem apparently is that although progressive ideas usually originate at the bottom, they are almost always violated by those at the top. Clearly, we need to develop strategies to shift the nation politically from oligarchy to genuine democracy. Of course that road entails a very steep climb. But there is no other alternative.