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IRS, Meet Philip K. Dick: Tax Collectors Launch "Pre Crime" Division

Tyler Durden's picture


From Simon Black of Sovereign Man

IRS to increase “pre-crime” enforcement

Did you ever see Minority Report? It's one of Steven Spielberg's often forgotten about movies based on the short story by Philip K. Dick.  In the movie, pre-couch Tom Cruise plays a police officer in the year 2054 who works for the highly specialized 'pre-crime' division.

Using a bizarre array of technology and metaphysics, the pre-crime division sees into the future and stops criminals in their tracks, arresting them before they commit a crime... sometimes before they even think about committing a crime.

This very elaborate and morally ambiguous law enforcement system is predicated on the government determining what your actions and intentions will be, often before you do.  It's not all science fiction.

A number of politicians and bureaucrats in Washington D.C. are seeking to step up the Internal Revenue Service's powers, and technology, to essentially audit taxpayers before returns are even filed.

In remarks to the National Press Club last week, an IRS spokesman unveiled the agency's vision for the "look forward" model in which most of the pertinent reporting information for the average taxpayer (W2, 1099, mortgage interest etc.) would be submitted to the IRS well in advance of the individual deadline.

After a massive upgrade in technology, the IRS would be able to pre-calculate what it expects to receive in taxes and instantly reject any return that doesn't comply with its determination.

This may work fine and well for some wage earners... but start throwing in a few investment accounts, small business income, private partnerships, etc. and things can quickly diverge from the IRS estimates. 

Imagine you start a new business on the side of your usual employment this year and take an initial loss due to ancillary startup costs.  This wouldn't factor into the machine's pre-calculations of your tax liability, so you would be immediately rejected and flagged for additional scrutiny.

Makes you want to run out and start a business, or invest your capital in someone else's, right? Not exactly.

Deep down, I think these people simply want to try and make things more efficient. Pre-crime is not the way to go.  There are a number of countries that have incredibly successful tax codes, and there are common themes in all of them:

1) Keep it short. The Baltic countries are a great example of this-- the entire Estonian tax code is about 70 pages, roughly 1/1000th the size of the US tax code (which is still prone to so much interpretation). It takes about 15 minutes to fill out an Estonian return, and you can do it online.  In the Maldives, it's even easier.

2) Keep it simple. When you have a tax code that's so complex it has given rise to a multi-billion dollar preparation industry, you have a problem. There are dozens of different forms at the IRS, and over 20 versions for the 1099 alone! This is a system that is prone to massive flaws and a great deal of contradiction.

Hong Kong is a great example of a simple system. Taxes are levied at a flat rate of 15% based on the "territorial principal" that only income derived from Hong Kong is taxed. There is no capital gains tax, no VAT, no estate tax, etc. And yet, the biggest problem the Hong Kong government faces regarding taxes is how to give away their massive surplus.

3) Keep it low.  When you make it easy and painless for people to pay taxes, it removes most of the incentives for them to cheat. In Singapore, tax rates are among the lowest in the world with a maximum rate of 20%. The capital gains rate is zero. The corporate rate varies from 0% to 17% (and keeps falling).

Under these circumstances, why cheat? By keeping rates low, the government is removing any incentive to engage in complicated (and costly) tax avoidance techniques. From a cost/benefit perspective, it's much easier to comply when rates are low.

4) Keep it friendly. Creating an adversarial relationship with taxpayers doesn't do anyone any favors. One of the key themes of the world's most successful tax regimes is that they do not operate like a police agency that's out to get people. This is a massive hurdle for the IRS to overcome.

Perhaps the polar opposite of this is Switzerland, where tax evasion is considered a civil matter, not a criminal matter. In Switzerland, the local cantonal tax authorities actually compete with each other for your business, rather than sticking you up for cash under penalty of imprisonment.

The US government is now searching for answers. Behind close doors, politicians are likely admitting to each other that the kitty is empty and they're completely bankrupt. They don't have to look far for solutions-- the best models in the world are already in practice and have been successfully implemented.

Rather than making things easier, less painful, friendlier, and simpler, the US government seems to be taking the opposite approach-- hiring more agents to sniff out 'suspicious' activity (defined in their sole discretion), raising taxes, and relying on fear and intimidation.

I suspect this path will have the opposite effect-- instead of raising more money for a bankrupt government, it will continue to chase out productive people. More on that in a future letter.

Until tomorrow,

Simon Black
Senior Editor,


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Tue, 04/12/2011 - 13:50 | 1162256 Just Observing
Just Observing's picture

Sounds like a real target for that hacker bunch with the Guy Fawkes masks.

Tue, 04/12/2011 - 14:18 | 1162382 Rahm
Rahm's picture

Recorded Future is funded by an arm of the CIA:

I've been getting the reports for about a year now, they aren't even accurate.  They are nothing more than a waste of time.

Tue, 04/12/2011 - 14:19 | 1162389 downrodeo
downrodeo's picture

the original future viewers:


Tue, 04/12/2011 - 15:01 | 1162502 Hugh G Rection
Hugh G Rection's picture

Fuck the IRS!



thats all

Tue, 04/12/2011 - 16:03 | 1162813 WaterWings
WaterWings's picture


Tue, 04/12/2011 - 16:27 | 1162905 chumbawamba
chumbawamba's picture

These fuckers won't even be around in a few years and they're planning for their future?  Pure comedy.

I am Chumbawamba.

Tue, 04/12/2011 - 16:42 | 1162954 Shameful
Shameful's picture

If there is any agency I expect to survive it's the IRS (and CIA). Might have to merge them with the Army, but I don't think they are going anywhere even in full revolt and splintering of the Union.

Wed, 04/13/2011 - 16:27 | 1166646 downrodeo
downrodeo's picture

Not a bad business model though when you think about it. Churn out total crap, have the CIA associate their name with it, and see who is dumb enough to hand over money for it. 

Tue, 04/12/2011 - 16:25 | 1162898 ConfederateH
ConfederateH's picture

Paging Bruce Krasting:  Shouldn't you make a counter-balancing post about how evil tax competition is and how we should all be over-joyed to be able to pay "our fair share"?

Tue, 04/12/2011 - 13:51 | 1162258 plocequ1
plocequ1's picture

Too complicated. I will just quit my job and become a fucking Mole rat. 

Tue, 04/12/2011 - 13:59 | 1162298 InconvenientCou...
InconvenientCounterParty's picture

Instead of doing that, why don't you start an IRS expert network?

Tue, 04/12/2011 - 14:00 | 1162311 Ahmeexnal
Ahmeexnal's picture

Who is John Galt?

Tue, 04/12/2011 - 13:51 | 1162269 tmosley
tmosley's picture

Road to Serfdom, much?

Tue, 04/12/2011 - 14:33 | 1162445 slewie the pi-rat
slewie the pi-rat's picture

negative income tax, BiCHeZ!

an idea whose time came 45 years ago!

very simple tax code, progressive.  concentrated wealth not healthy for republic.  anybody noticed that one, yet?

you making dough, you pay into the kitty.  you poor, you file and get food stamps and whatever other bullshit ya got coming, which may not be too fukin much. 

very small IRS.  fraud and human fiangling no longer punishable by death, either economic or emotional. 

no fukin social workers.  well, a few, to answer Q's and help people who are having trouble getting real simple.

any questions?

Tue, 04/12/2011 - 14:49 | 1162518 Buckaroo Banzai
Buckaroo Banzai's picture

Unfortunately, income taxes of any kind are not compatible with a Free society.

By taxing your labor, the state turns you into a de facto and de jure slave. You work for the state now, the state gets paid for your labor first, and the state decides how much money you will keep. You don't wear any chains because the entire world is your prison.

Property taxes are also incompatible with a Free society. If you pay taxes on your property, you don't really own it-- the State does. Seems absurd? Of course not. Try not paying your property taxes and see who REALLY owns your property.

Life, Liberty, and Property are the three legs of the stool of Freedom. Unfortunately, you are trying to sit on a stool with 2 of 3 legs broken. Here in Soviet Amerika, you haven't been Free for a very long time.

That's why the original Constitution forbade direct taxes, and the original federal gov't was only funded by excise taxes (which are avoidable, and thus consistent with a Free society).

Tue, 04/12/2011 - 15:23 | 1162667 konputa
konputa's picture

+1 BB

Tue, 04/12/2011 - 15:36 | 1162712 hedgeless_horseman
hedgeless_horseman's picture

flag as excellent (1)

Tue, 04/12/2011 - 16:54 | 1162992 minus dog
minus dog's picture

Fuck yes.

Giving people a mechanism to vote themselves into other people's wallets is not simply wrong - it's guaranteeing disaster somewhere down the road.  We're living it as we speak.

Property taxes that prevent people from doing something so simple as working the land with their own two hands are, likewise, just plain wrong.

Between the IRS, property tax laws, and eminent domain abuse, they're turning us into a nation of serfs.


Tue, 04/12/2011 - 17:42 | 1163128 TeMpTeK
TeMpTeK's picture

The Founding Fathers told me to  +1000

Tue, 04/12/2011 - 19:04 | 1163316 Sunshine n Lollipops
Sunshine n Lollipops's picture

And the 'fair share' meme is so thoroughly embedded in the minds of the sheeple that this kind of talk will have you painted as some kind of nut. The propaganda worked to absolute perfection. As an example, my father, when he couldn't find the proper tax form this year, contacted the ever-helpful IRS and requested the one he needed. I was there when he received it, and he was genuinely thrilled that they actually sent it out to him, and soooo appreciative. My head fuckin' near exploded.


Tue, 04/12/2011 - 19:37 | 1163400 Max Hunter
Max Hunter's picture

flag as excellent (2)

Tue, 04/12/2011 - 20:06 | 1163488 FreedomGuy
FreedomGuy's picture

Exactly right! A kindred soul. I would like to add that minimum (and maximum) wages and the like are also incompatible. If you own yourself it is up to you what you will work for, low wages, high wages, benefits, conditions, etc. 

The Whiskey Rebellion was over a 3 1/2% sales tax. We are not so feisty these days.

Frankly, it should be Unconstituional to have a code you cannot know or understand no matter what type of tax you wish to assess. The problem with this pre-crime type system is that I cannot know what documents the IRS has on me before I file. I ran into that this year. I like gamble and I am not sure if I have the same number of W-2g's that the IRS might have. It would be nice if they gave them to me before I filed.

The biggest problem as I see it is that our income tax with infinite subparagraphs requires me to document virtually my entire life. By the time you research charitable, business, medical, local tax, etc. deductions and similar income documents you find that every single aspect of your life must be documented and submitted to the IRS/State for its approval. The assumption is that you are a liar and fraud. I hate it more and more each year. It begins to make me wonder why I am bothering to be productive at all. I begin to ask if it is worth it at all and George Orwell's famous words come back to me, "Only proles are free."

I think Republicans will fail miserably in all their budget and governmental efforts. It will not be because they don't have the right sentiments. It is because they don't have a strong underlying ideology that will drive them to do the right things. They are not eliminating a single government agency. They will not revamp the tax code and they won't consistently represent liberty. The Democrats will consistently grow the State and dispense favors.

We need to elect Libertarians by party or if they are hiding in other parties, like Ron Paul. ONLY when we return to liberty will we return to honest prosperity.

Tue, 04/12/2011 - 20:24 | 1163551 Zero Govt
Zero Govt's picture

+100% Bucakroo

Tue, 04/12/2011 - 20:17 | 1163533 Hephasteus
Hephasteus's picture

"Property taxes are also incompatible with a Free society. If you pay taxes on your property, you don't really own it-- the State does. Seems absurd? Of course not. Try not paying your property taxes and see who REALLY owns your property."

Ya you should really try not paying your property taxes. As in DON"T PAY IT. SHOOT anyone who comes to collect. The state has ownership issues. They seem to think they own the people they govern and need to have all sorts of lessons concerning this.

They also need to learn the basice leo to virgo lessons about how you rise to leadership and fall to service. Since you have to slaughter them like rabid dogs to take them out of leadership and into service they don't get those lessons taught either. Basically the state is a know it all who won't learn anything but thinks they can teach other people how to behave as long as they teach them slavery is the only way.

They also aren't responsible. As long as you define responsible as actually responding. I emailed the oklahoma tax commission about revolting against taxes and forcing them to have armed law enforcement collect taxes instead of ordinary citizens and by what authority of agency they authorize people to collect taxes on their behalf and why they don't pay them for the work and duties they impose. They still haven't emailed me back. So their responsibility rating is a 0 in that they have not responded positively or negatively to me at all. So my responsiblity rating is at 0. I won't respond to any government agents request for information or demand for action. Because I'm just not going to be responsible any more.

And I'm starting a helicopter race hate group. The helicopter klux klan. We are going to demand an expensive helicopter every month which we will slaughter with sledge hammers and burn in a religious ceremony. If they don't offer sacrificial helicopters we'll hunt them down and slaughter them in the wild. I think there's a lot of people that really really hate helicopters and would like to see a very large helicopter genocide movement take off. As we demand the death of evil helicopters everywhere. We'll eventually become so hip we'll just go by copter klux klan or chopper klux klan. White's, blacks, indians, gays, straights anyone can join. You just have to violently slaughter helicopters and spread your helicopter hatred to as many people as possible. And since helicopters are used to photograph housing improvements to increase home owner taxes. Homeowners are welcome to join too.

Stand up for your right to murder stinky, ugly, noisy helicopters.

It took the coast guard a week to get 43 lousy helicopters to katrina. And if we are actually attacked all the helicopters will be dead within days anyway. Why let foreignors enjoy destroying our helicopters when that joy should go to US. Everywhere helicopters go lies and rumor go with them as they stir up the air (intellect) and lift themsevles to elevated positions. They are simply lying machines.

Remember and mark my words. If there's an economic collapse there will be tons of helicopter activity and all the evil that goes along with it. :)

Tue, 04/12/2011 - 23:14 | 1164007 pods
pods's picture

Fantastic post BB. I have often engaged others at work about how we are in fact all slaves, as our incomes are our labor and we do not choose how much is taken, we are in fact slaves.

As for "our" property, they need that as collateral for the FED, much like they used our gold.



Tue, 04/12/2011 - 13:53 | 1162270 Ruffcut
Ruffcut's picture

They have been using this for years. That's how they selected turbo timmy for the job at treasury.

Tue, 04/12/2011 - 14:05 | 1162330 citta vritti
citta vritti's picture

and with turbo timmy, they assessed what he was worth (0), compared it to what he'd paid (0), cross checked to the worth of the organization he worked for (0) and concluded: all okay, nothing to look at here, keep moving.

Tue, 04/12/2011 - 14:38 | 1162477 slewie the pi-rat
slewie the pi-rat's picture

+ ruffcut!

Tue, 04/12/2011 - 13:53 | 1162271 NotAllowed
NotAllowed's picture

Big Brother Bitchez!!

Tue, 04/12/2011 - 13:54 | 1162286 JLee2027
JLee2027's picture

Phillip K. Dick was a genius, who died far too early. Great story and good movie.

IRS...pre-crime, lol.




Tue, 04/12/2011 - 14:06 | 1162337 Mercury
Mercury's picture

The future, according to PKD, will be a lot like the past: full of sordid money grubbing, petty malevolence and official violence.

Tue, 04/12/2011 - 14:37 | 1162470 gall batter
gall batter's picture

agree.  brilliant, brilliant novelist.

Tue, 04/12/2011 - 14:44 | 1162490 slewie the pi-rat
slewie the pi-rat's picture

it's just fabulous to have brad pitt running our site, in character as tyler durden!  holly-wood-lore for zeros!  say hi to angie and the kids for us, too!  we luvya, fukhead!

Tue, 04/12/2011 - 13:55 | 1162288 InconvenientCou...
InconvenientCounterParty's picture

just like any law, the meat is in the enforcement.

Tue, 04/12/2011 - 13:55 | 1162290 suckerfishzilla
suckerfishzilla's picture

I've always treated the IRS like my wayward uncle who has just showed up out of the blue to visit me.  When I was a poor minimum wage sap on my W-2 forms I always claimed zero dependents.  That would ensure that I would get a refund after tax day when I filed.  I have never had a problem with the IRS.  Just pay them what you owe according to their Faustian ledger. 

Tue, 04/12/2011 - 13:59 | 1162308 InconvenientCou...
InconvenientCounterParty's picture

I'm with you. I'll gladly pay my due so our corporate benefactors can prosper.

Tue, 04/12/2011 - 14:06 | 1162338 SilverRhino
SilverRhino's picture

>> I have never had a problem with the IRS.  Just pay them what you owe according to their Faustian ledger. 

You never had a problem because you act like a totally compliant  slave.   Of course they like you.  

Why are we paying income taxes when Bernanke and Geithner could just gin up a trillion a year for the Fed budget and call it a day?    If they dilute the currency for Government operating expenses they effectively TAX everyone at the same rate.   

There might be something to this >:) ....

Tue, 04/12/2011 - 14:00 | 1162307 savagegoose
savagegoose's picture

betya didnt see this comming tax man



Tue, 04/12/2011 - 14:01 | 1162314 AR15AU
AR15AU's picture

This goes against everything that liberals believe in. How can they improve your life if they don't have the power to change your behavior and redistribute your resources?

Tue, 04/12/2011 - 17:12 | 1163052 rosiescenario
rosiescenario's picture is not about the revenue it is about control and power.

Tue, 04/12/2011 - 14:05 | 1162334 Incubus
Incubus's picture

Yeah, take my tax money to go secure oil in the middle east, kill some a-rabs, and give bankers some well-earned dough.  Nevermind making sure public education & jobs are sorted here, stateside—since that doesn't affect the future of the country in any sort of way, huh? I can't possibly see what a well-educated and well-employed populace could mean for a country's prosperity, nope—I just can't see it.


IDGAF about monkeys and their goddamn domestic terrorist labels, what the hell we need is to ramp up guillotine production here in the US and bring these smug kleptocrats to 'em.


Tue, 04/12/2011 - 14:15 | 1162357 Hard1
Hard1's picture

I saw a precogs wanted ad in the Washington post today.

Tue, 04/12/2011 - 14:14 | 1162370 bob_dabolina
bob_dabolina's picture

Training provided by the SEC

Tue, 04/12/2011 - 14:18 | 1162393 Hard1
Hard1's picture

Yep, no precog will want to leave his/her wall street job to go for the IRS, only half-elves do such things these days.

Tue, 04/12/2011 - 14:37 | 1162465 BigJim
BigJim's picture

I saw a precogs job ad next week.

Tue, 04/12/2011 - 14:45 | 1162505 slewie the pi-rat
slewie the pi-rat's picture

that's, like,  deja vu all over again, BJ!

Tue, 04/12/2011 - 20:18 | 1163536 Hephasteus
Hephasteus's picture


Tue, 04/12/2011 - 14:50 | 1162525 Almost Solvent
Almost Solvent's picture


Tue, 04/12/2011 - 17:12 | 1163059 rosiescenario
rosiescenario's picture

...very nice.

...and I saw a post-cogs ad last week.

Wed, 04/13/2011 - 00:34 | 1164146 Hephasteus
Hephasteus's picture

I think we all saw that one coming.

Tue, 04/12/2011 - 14:29 | 1162433 Mercury
Mercury's picture

Shit, the SEC is still trying to master postcog.

Tue, 04/12/2011 - 15:01 | 1162565 MachoMan
MachoMan's picture

My vision is clouded...  by the tranny porn...

Tue, 04/12/2011 - 14:17 | 1162364 Rodent Freikorps
Rodent Freikorps's picture

The IRS, like Obama, are above the law.

Just check out yesterday's Ninth Circuit decision on the Arizona illegal immigration law. The Obama "policy" of non-enforcement of federal immigration law trumps both federal and state law.

Fucking USSA has been given a thumbs up by the federal judiciary.

The Federal courts are now on record for supporting an Imperial government.

The USA is officially dead.

Long live the Empire.

Tue, 04/12/2011 - 16:00 | 1162797 Dolar in a vortex
Dolar in a vortex's picture

It's the 9th Circus though, just what we expect of them.

Tue, 04/12/2011 - 17:38 | 1163114 Rodent Freikorps
Rodent Freikorps's picture

We are one vote among the Supremes to this being our new reality.

I imagine the US is about to break up, and the hell of it is, the break-aways will be the ones who truly value the Constitution.

Tue, 04/12/2011 - 21:14 | 1163687 Ridgerunner
Ridgerunner's picture

Nothing new there... same as last time. Wonder if the result might not be different, though.

Tue, 04/12/2011 - 14:15 | 1162373 Shameful
Shameful's picture

Just an intermediary step. After all why not directly send the IRS all wages and allow them to reallocate them to the "citizens" based on their wisdom and knowledge of the arcane and sanity blasting rules?

Tue, 04/12/2011 - 14:39 | 1162475 BigJim
Tue, 04/12/2011 - 14:52 | 1162534 Shameful
Shameful's picture

And once again the UK leads the way! Shine on you wacky police state, shine on! So by my estimate we in the US are usually about 5ish years behind the UK, so we can expect to see this under a Red Goon in 2017? You know assuming the system has not totally flown to pieces by that point. Hell maybe sooner, going to have more wars to fight and hard to get blood from stones.

Tue, 04/12/2011 - 18:58 | 1163297 Rodent Freikorps
Rodent Freikorps's picture

Brits have a long history of being grateful for the crumbs that fall from the aristcracy's table.

We should try to not be like them.

Tue, 04/12/2011 - 18:38 | 1163250 BigJim
BigJim's picture

Yes, when it comes to leading the sheep to the promised land of total slavery, I like to think the UK is up there with the big boys.

Tue, 04/12/2011 - 20:14 | 1163510 Zero Govt
Zero Govt's picture

compared to the Yanks 35% of GDP siphoned off to the parasites Blightys 60% of GDP joins Sweden and the old Eastern Communist block for the 'Big Boys Club' of draining the economy dry that's for sure ...and Eaton Commie Cameron has even more tax hikes on the merry way... the State may as well take our wages direct and just refund us tax credits and food stamps ...oh the joy of having 3 Parties of Socialists to 'choose' from come election time

Tue, 04/12/2011 - 14:17 | 1162374 Cdad
Cdad's picture

IRS, Meet Philip K. Dick

How about instead, "SEC, Meet the Criminal Syndicate Dick that Manipulated the Roach Motel[SPY] @ 1:31 : how the dumbest dipshit traders on Earth get bailed out day in and day out by a rigged system filled with computerized fuckwards."   A love story about bankers in love with themselves.

How about that title, instead?  HELLO SEC?  Is there anybody out there?

Tue, 04/12/2011 - 14:52 | 1162533 Almost Solvent
Almost Solvent's picture

Only the FBI & CIA track this blog.

The SEC & IRS are over at MarketWatch.

Tue, 04/12/2011 - 16:31 | 1162899 hedgeless_horseman
hedgeless_horseman's picture

The FBI and CIA rank and file are mostly on our side, just like the military.  They get paid with inflating dollars, too.  The smart ones know, better than us, what is going on. 

If only we the people made it illegal for politicians and judges to take contributions (bribes), then the FBI might be able to help out. 

If only we the people made it illegal for our Federal government to bribe foreign countries (foreign aid), then the CIA might be aable to help out.

Tue, 04/12/2011 - 21:33 | 1163741 joshbot
joshbot's picture

IMHO They + Northern Command and the NSA are the real government who take orders from the offshore eugenecist / moral nihilist bankers.

Tue, 04/12/2011 - 14:18 | 1162376 Cthonic
Cthonic's picture

Search terms like FINCEN BSA SAR "fusion center" FBAR and see just how interested your overlords are in remaining, well, your overlords.  Can't have their (cash) cows wandering off their pastoral estate...

Tue, 04/12/2011 - 14:50 | 1162524 slewie the pi-rat
slewie the pi-rat's picture

now dress them in checkered tu-tu's, nice sandals, ripped panty hose,  and viking horns,  and arm them with bows and little rubber cup-tipped arrows. 

how we doin, now?

Tue, 04/12/2011 - 14:16 | 1162381 topcallingtroll
topcallingtroll's picture

I really consider it a duty now to cheat anyway i can from hiring workers off the books to online purchases. Every time you can cheat the system out of five bucks is a small victory and hopefully in a small way limits the food that keeps this monster growing out of control

Tue, 04/12/2011 - 15:11 | 1162611 MachoMan
MachoMan's picture

Obviously if they're not getting W-2s or 1099s on your cash transactions, then it's going to be pretty hard to pre-screen your return...  Ultimately, voting takes place with money and there is no more direct way to vote than via tax revolt...  And, further, as the economy deteriorates and stagflation grows worse, the incentive to knock a little off of uncle sugar's cut grows for the vast majority of people...  the pathological liars at the top are already incentivized to do so...  this is ultimately the FED's vice.

Tue, 04/12/2011 - 14:18 | 1162394 savagegoose
savagegoose's picture

i applied for this job last year, before they even know they needed me.

Tue, 04/12/2011 - 14:21 | 1162402 sun tzu
sun tzu's picture

This has been going on for years. It's called a CP2000 correspondence audit. They make sure your W-2 wages match the amount reported to them and your 1099 income matches the amount reported to them. They are looking at the minimum income you should be reporting on certain lines. A schedule C loss won't cause your return to be rejected. Sch C losses are already  under scrutiny.

Tue, 04/12/2011 - 14:19 | 1162403 sun tzu
sun tzu's picture

This has been going on for years. It's called a CP2000 correspondence audit. They make sure your W-2 wages match the amount reported to them and your 1099 income matches the amount reported to them. They are looking at the minimum income you should be reporting on certain lines. A schedule C loss won't cause your return to be rejected. Sch C losses are already  under scrutiny.

Tue, 04/12/2011 - 15:01 | 1162561 slewie the pi-rat
slewie the pi-rat's picture

every time they say one fukin word to me except, "here's yer check, slewie!" i just immediately write them, in pencil, like all my tax forms are forever filed, by me, no one else, ever (!), that i don't lie to the fukin IRS (i call it creative writing time, ok?  to myself, of course) and that they can just see me in fukin court asap if they have any problems, what-so-fukin-ever, and charge me with whatever the FUK they want.  i don't care.  i'll see them downtown in court, in pro per, anytime, and they will not beat me!

and, they stop corresponding with slewie.  really.

Tue, 04/12/2011 - 15:12 | 1162587 slewie the pi-rat
slewie the pi-rat's picture

these missives look like they're coming directly from "Big Nurse's favorite ward" and they generally also smell a bit funny, too...

my tax forms are creative:  pencilled messes, no letters or numbers the same size, scribbles, dick & jane math all over the place, coffee stains, catsup, oatmeal, snot, wonderful varieties of signatures, and a first-class stamp!  postmarked?  4.15, even for extensions...  unless i'm broke.  then, i file in december!

Tue, 04/12/2011 - 17:39 | 1163113 Dirt Rat
Dirt Rat's picture

You also might try filling out your forms in Roman Numerals.

Tue, 04/12/2011 - 15:15 | 1162638 gall batter
gall batter's picture

I'm impressed.  Big time.  Pencil?  That's a clever idea.  

Tue, 04/12/2011 - 20:02 | 1163484 Mister Meaner
Mister Meaner's picture

And why people e-file is beyond me. Those are nice, neat, clean tax returns, all for the benefit of da gubba mint. Of course they e-file to get their "refunds" back faster.

People need to get their W-4's in order, so that you OWE tax (e.g. no interest free loans to da gubba mint--to fund their criminal activities), and pay that on 11:59pm April 15, and done "a little messy", in pencil, as slewie suggests, but otherwise all perfectly legal and in order.

Use TurboTax to get the numbers, then write it all up in pencil. Erase it and re-write it. Squeeze a jelly donut on it and wipe it off. Fold it up and keep it in your pocket for a couple of days. Etc.

This would throw some big rocks in the IRS's gears.

But Noooooooooo...people want to efficiently get screwed by the IRS.

Tue, 04/12/2011 - 14:24 | 1162412 janchup
janchup's picture

And so we begin to see the real meaning of "Change We Can Believe In."

Tue, 04/12/2011 - 14:29 | 1162434 cosmictrainwreck
cosmictrainwreck's picture

Fuckin' idiots. Just trash the whole Code & create a goddamn half-page form. Then you can talk about how smart you are. Fat chance.......

Tue, 04/12/2011 - 14:30 | 1162441 Aristophanes
Aristophanes's picture

I'll give you precrime:

Politician: Treason.

Banker: Theft.

There...I must be a fucking clairvoyant.

Tue, 04/12/2011 - 21:24 | 1163709 WaterWings
WaterWings's picture

Nice. Often with a dash of Genocide.

Tue, 04/12/2011 - 14:37 | 1162476 Just Observing
Just Observing's picture

The idiots can't find their asses with both hands now, much less add to their load.


One year, back when my IRA was still deductible, and I still believed in IRA's, ( feeling much better now, thanks ), they sent me a letter:

"You claimed a $2,000 deduction on your IRA for the tax year 19XX.  According to our records you only deposited $500 with  AAA....., another $500 with BBB...., and $1,000 with CCCC..... mutal funds.  You will need to write us and clear this up".


I scrawled on it with a crayon "You're fucking kidding, right ? " and sent it back.  Never heard a word from them.

Tue, 04/12/2011 - 15:19 | 1162644 gall batter
gall batter's picture

Learning so much from you "its" here on ZH.  Crayons and pencils.  Brilliant!

Tue, 04/12/2011 - 15:22 | 1162660 Mach1513
Mach1513's picture

Similar story:  received a letter "demanding payment" within ten days because I had failed to respond to a letter which I had never received informing me of a delinquency in my return of $00.00. 

This is not a joke. All of my numbers were correct. No delinquency.  But they still wanted a check.

You guessed it:  a check for $00.00!


Tue, 04/12/2011 - 14:44 | 1162479 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

this pre-active gubmint is post-hope&change...

feels kinda changey but not very hopey

Tue, 04/12/2011 - 14:40 | 1162481 Waterfallsparkles
Waterfallsparkles's picture

Most People are taxes twice in this environment.  Once on their Income and again on the Depreciation of the Dollar.

Plus they pay taxes after taxes on Property, sales tax, transfeer tax, recording tax, capital gain tax, water tax, sewage tax, cigarette tax, liquor tax, gasoline tax, ect., ect, ect.

Tue, 04/12/2011 - 15:06 | 1162585 Rodent Freikorps
Rodent Freikorps's picture

Hell, there is even a stamp tax on your dog.

Tue, 04/12/2011 - 14:44 | 1162498 Trundle
Tue, 04/12/2011 - 15:08 | 1162609 Calculated_Risk
Calculated_Risk's picture

Sounds like an Enron mark to market scam to me, the .gov wants to book furture earnings based on estimated taxes.

This will end well...

Tue, 04/12/2011 - 15:11 | 1162624 Geoff-UK
Geoff-UK's picture

5 points for the first part that informed me of a new IRS practice.


-3 points for giving us your opinion of the ideal tax code.  Who gives a shit about your unicorn fantasies that will never bear fruit?

Tue, 04/12/2011 - 15:44 | 1162730 SilverRhino
SilverRhino's picture

Read them both asshole.  If you want the unvanished dry facts without the opinion do you own fucking research.

Tue, 04/12/2011 - 15:21 | 1162649 dark pools of soros
dark pools of soros's picture

you assume that they want it fair and easy

Tue, 04/12/2011 - 15:24 | 1162656 dark pools of soros
dark pools of soros's picture

you assume that they want it fair and easy

Tue, 04/12/2011 - 15:25 | 1162663 pazmaker
pazmaker's picture

what happens if you don't file?  how long does it take them to catch up to you?

Tue, 04/12/2011 - 15:23 | 1162666 Urban Redneck
Urban Redneck's picture

IRS are there to rape the defenseless serfs. Civil Retards are too cowardly to stand up to Turbo Tax Timmy and his tax fraud, even though those just slightly lower on the Treasury totem are subject to termination for tax errors.  How are they ever going to stand up to a real banker?

To paraphrase Dbag Dodd, "I'm glad 100% of their Social Security and Civil Service pension is invested in US Treasuries."

Tue, 04/12/2011 - 15:44 | 1162732 proLiberty
proLiberty's picture

The tax department of my state did this for a few years with business sales tax payments until the politicians throttled them.  If you were late in filing your quarterly report, the computer made a projection based on your previous filings and sent you a bill for that amount.  It was up to you to prove the bill was wrong.  What a nightmare.

With the IRS, this is just an extension of their tyrranous doctrine of the presumption of guilt.  But I note that it is still not outrageous enough for anyone in Washington to consider repealing the 16th Amendment.  That would mean the end of the big government gravy train and everyone knows it.


Tue, 04/12/2011 - 15:49 | 1162756 pcrs
pcrs's picture

"keep it friendly?", by it's very nature tax is a gun on your head and a hand in your pocket. Take that away and it is a normal bussiness.

Tue, 04/12/2011 - 16:23 | 1162883 WTF_247
WTF_247's picture

The biggest hinderance to ridding the US of the IRS and simplifying the tax code is the government uses it for social engineering and political favors.  Politicians care about two things only ... getting reelected and making themselves rich.  The tax code does both of these for them.

Not to mention, if you rid the US of the tax code, 200k IRS workers would be out of a job (probably VERY conservative) and another 300k accountants/tax preparerers, office workers in those offices etc. who prepare individual taxes. Accountants would still be needed for corporate and business accounting, just not for taxes.

My guess is you would see an immediate boost to the US GDP by 5-7% with a move like this, but it will never happen until the SHTF and the hands are forced to do it.  Eliminate red tape and "fear" of the IRS, money flows.   

Tue, 04/12/2011 - 16:34 | 1162929 kumquatsunite
kumquatsunite's picture

Traditionally, "taxes" as in "render unto Ceasar" were set at ten percent. This, of course, meant a flat ten percent and no more. Now adding up "fees" and various taxes on all the different taxes accessed at various "entry points" of a business, especially for those starting up a business, the taxes often run up to the fifty to sixty percent level.

As a number of books have shown, for example a wonderful book is Mao's Great Famine by Frank Dikotter, who should win a Nobel Prize for this book, when the productive become fettered by taxes and the ever-increasingly lusty appetite of the non-productive (aka "government" and "government workers"), the productive begin to be, shall we say, "non-productive." Seeing the fruits of their labor appropriated and spirited away, the productive become demotivated and begin believing in afternoon siestas, late night carousing and wine imbibing, and most assuredly, the productive begin to act like the grasshopper rather than the ant. Always, communism (and its taxation system) will eat until it eats the seed corn, and those who grow the seed corn, and then communism learns what is real and what isn't, as the famine sets in. Frank Dikkoter is brilliant in explaining this to us. So recall as they steal from you, that they are bringing famine and misery in their self-glorifying "share the wealth" munificence.

By the way, anyone notice that Oboma is looking unusually thin? Not saying he is worried about that birth certificate thingy, but Trump is a tough guy. I wouldn't want him sticking his finger in my chest and saying, "Hey, buddy...."

Tue, 04/12/2011 - 17:19 | 1163071 rosiescenario
rosiescenario's picture long as it is your chest, your ok.

Tue, 04/12/2011 - 16:47 | 1162964 velobabe
velobabe's picture

hell, i just realized i have a rolling $200,000.00 loss, bitchez. should last me untili i am dead.

Tue, 04/12/2011 - 16:46 | 1162968 PulauHantu29
PulauHantu29's picture

Why change anything? GE, GS and most Big Wall Street Corps pay zero in taxes already.

Tue, 04/12/2011 - 17:21 | 1163078 rosiescenario
rosiescenario's picture

One thing that has always been true is that whenever the tax code is simplified it becomes larger and more convoluted. The Byzantine Empire pales in comparison to what our folks in D.C. can come up with.

Tue, 04/12/2011 - 18:16 | 1163199 gwar5
gwar5's picture

Thanks Simon. You're right, the tax best models are already there. Seems like our friendly new IRS agents armed with 3000 shotguns are being increased used to expand the police state.

I'd like to abolish the IRS and get rid of income taxes and the Federal Reserve. Instead, insitutute a USA "Fair Tax" aka, a VAT. This would tax the illegal underground and the touristas who visit. 

Tue, 04/12/2011 - 19:14 | 1163339 Coldfire
Coldfire's picture

The IRS is the crime. The Sixteenth Amendment is still in existential conflict with the Fifth Amendment's "Takings" Clause.

Tue, 04/12/2011 - 21:35 | 1163729 Tunga
Tunga's picture

Actually Coldfire; the Fifth Amendment protects Americans, whereas the 16th only has effect on US citizens. The difference is found in the 14th Amendment. Fortunately the 14th is a fraud. The 16th merely clarifies the Governments right to tax it's employees. When you sign a W-4 you swear to being an "employee".  Therein you'll see your "self" branded a government serf. A taxable position. 

Title 26 (AKA the tax code); 

Section 3401. Definitions

(c) Employee For purposes of this chapter, the term "employee" includes an officer,

employee, or elected official of the United States, a State, or any political subdivision

thereof, or the District of Columbia, or any agency or instrumentality of any one or more

of the foregoing. The term "employee" also includes an officer of a corporation.

Tue, 04/12/2011 - 19:27 | 1163368 AndrewJacksonsGhost
AndrewJacksonsGhost's picture

2003-2008 I went to work for someone else, previous Cash work only.

Got mine in 2009 for 04 and 05.

I never returned anything to them and never will.

What are they going to do, put me in a slave camp? I might just like it. LOL

Tue, 04/12/2011 - 19:29 | 1163373 TheObsoleteMan
TheObsoleteMan's picture

The Federal government could easily adopt a new tax system that is more fair, CONSTITUTIONAL and would bring in more revenue. But they will never do it. Why? Because collecting revenue is really just a secondary function of our current system. The primary reason the system is still in use despite of all of it's obvious problems is INTELLIGENCE COLLECTION. If we had a national sales tax, or something similar, there would be NO REPORTING REQUIRMENT. Every year, you send in a dossier to the g-men {and women} on you and you family. They know all of your investments, liabilities, assets, children in your home, expenses, charitable controbutions, YOU NAME IT. Considering how almost 50% of all filers get a 100% {or in some cases, MORE} refund of the taxes paid, why bother then if it were all just about the money. Thats because it isn't. You are federal property, and the master wants to know all about the affairs of their slaves.

Tue, 04/12/2011 - 19:34 | 1163389 Coldfire
Coldfire's picture

Only about 100,000 people in Hong Kong - mostly expats working in Central - pay income taxes. The top marginal rate is 15%, the composite rate is about 13.3%. As mentioned, there are no sales taxes, capital gains taxes or taxes on interest. Oh yeah, and no withholding. The armed gang known as the US government is desperate for revenue and will become more so as its fiscal situation continues to deteriorate.

Tue, 04/12/2011 - 21:11 | 1163648 Tunga
Tunga's picture

The IRS maintains an "ENTITY MODULE" for all US citizens. It contains information relating to your drug running in the Grand Caymans and money laundering activities. You did know you were a drug runner didn't you? Try to keep up will ya?


Income has been defined by the US Supreme Court (because the US Congress is too lazy to do it and the IRS is prohibited from defining it) as the profit or gain realized from the exercise of PRIVILEGE !!!. That's right People; exchanging work for pay is a right, but laboring in the service of the government is a taxable privilege. If you don't know your rights you don't have them! 


Smarten up already. 

Wed, 04/13/2011 - 08:51 | 1164672 Aristophanes
Aristophanes's picture

I read somewhere (probably on this blog), that the government doesn't care about tax revenue.  Why would they?  They can and do just print as much fiat as they want.  The real goal is to keep everyone using their created money for real items. 

It makes a lot of sense.  Their imaginary and corrupt value system only works at all because we buy into it. Taxes ensure that that majority of us stay playing the fiat game.

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