Raking It In

You may recall that earlier this year the IRS launched an initiative to pursue 125,000 “high-income, high-wealth” taxpayers who have not filed taxes since 2017. These were cases where the IRS received third party information[i] indicating these individuals had received income in excess of $400,000 but had failed to file a tax return. 

Last week, the IRS announced that during the first six months of this initiative, nearly 21,000 of these taxpayers filed returns and paid approximately $172 million in taxes.

Help Us Forget

Having been swept along for nine days “by the force of the hostile winds on the fishy sea,” Odysseus and his crew came to a strange land. After securing their ships, Odysseus sent some of his “companions ahead, telling them to find out what men . . . might live here in this country.” They came upon the Lotus Eaters, a people “who live upon . . . the honey-sweet fruit of the lotus.”[i] Those crew members who ate of the fruit were left in a state of bliss, forgetting all else, including an urgency to return home to Ithaca.[ii]

Almost That Time

In less than four months, the citizens of the United States[i] will be electing their next President to a four-year term.[ii] They will also be deciding which of the two major political parties will “control” the Senate, the House, or both, for at least the next two years.[iii]

In other words, the composition of two of the three branches of the federal government – specifically, those responsible for determining the direction of the country, and perhaps the world – will soon be up for grabs.

You Mess With The Bull . . .

An anonymous thinker, lost to history, is credited with having said that the unofficial motto of the IRS is, “We have what it takes to take what you have.”

In some instances, the truth of the above statement is manifested in what may be described by certain observers as an abuse of governmental power. In other cases, however, like that of the Taxpayers described below,[i] many members of the public will feel vindicated by the outcome, while probably many more will categorically approve of a bad actor’s having received their just deserts.[ii]

“Let’s make sure if they move, they have nowhere else to go because we’re all taxing them together.”[i]

Around the Globe

Earlier this year, the OECD observed there has been a significant increase in global wealth inequality over the last two decades. It also acknowledged that “taxation is a key instrument . . . that governments have at their disposal to address inequalities.” It added that, as “countries are looking for additional revenue sources to meet their long-term public spending needs,” it will be important to ensure “that everyone contributes their fair share,” specifically mentioning those individuals with “offshore wealth.”[ii]

Use Your Imagination

Imagine the IRS notifies Taxpayer that they have an outstanding tax liability with respect to Tax Year, and that the agency intends to levy on Taxpayer’s property to collect the allegedly unpaid tax. Taxpayer challenges the levy, arguing they had already paid the tax. The IRS Office of Appeals sustains the levy, and Taxpayer petitions the U.S. Tax Court to review that decision.

Imagine also, while the issue of the levy is pending before the Court, the IRS withholds from Taxpayer a refund for a later tax period, to which Taxpayer is concededly entitled, and that is unrelated to the levy.