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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Just Observing's picture

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

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.

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.

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.

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. 

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"?

plocequ1's picture

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

InconvenientCounterParty's picture

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

tmosley's picture

Road to Serfdom, much?

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?

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).

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.


TeMpTeK's picture

The Founding Fathers told me to  +1000

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.


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.

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. :)

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.



Ruffcut's picture

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

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.

NotAllowed's picture

Big Brother Bitchez!!

JLee2027's picture

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

IRS...pre-crime, lol.




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.

gall batter's picture

agree.  brilliant, brilliant novelist.

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!

InconvenientCounterParty's picture

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

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. 

InconvenientCounterParty's picture

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

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 >:) ....

savagegoose's picture

betya didnt see this comming tax man



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?

rosiescenario's picture is not about the revenue it is about control and power.

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.


Hard1's picture

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

bob_dabolina's picture

Training provided by the SEC

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.

BigJim's picture

I saw a precogs job ad next week.