“It’s just a matter of them going where they think the money’s at,” Steve Rosansky, president and CEO of the Newport Beach Chamber of Commerce, told AP. “I guess if I were running the IRS I’d probably do the same thing.”The Internal Revenue Service only audits 1 percent of tax returns each year and can yield greater taxes by targeting wealthy small business owners who might have underreported their earnings. As a result, the IRS is looking closely at small business owners in New Carrollton, Md., College Park, Ga., Beverly Hills, Calif., and Newport Beach, Calif. – suburbs that are home to wealthy and middle-class Americans, many of which are sole proprietors.These five metropolitan regions are more likely to host tax cheats than other neighborhoods, according to a study conducted by the National Taxpayer Advocate, an independent office within the IRS. And those who own construction companies or real estate rental firms are considered by the IRS to be most likely to cheat on their taxes.Despite the outcome of the study, which looked at tax cheat clusters from 2009, the IRS denies that a person’s ZIP code or employment status determines their likelihood for an audit.“The IRS initiates audits based on information the taxpayer includes – or doesn’t include – on a tax return,” the agency told AL.com. “We don’t base audits on geography. City or state location plays no role in the audit process whatsoever.”But data collected by the National Taxpayer Advocate did find that audits were more likely to occur in specific regions and target small business owners – even if the IRS denies using regional information as an auditing factor.The agency runs all of its tax returns through a program that gives each return a score called the Discriminant Inventory Function (DIF). Higher scores indicate that there are higher chances for the IRS to collect more money from conducting an audit.“If your return is selected because of a high score under the DIF system, the potential is high that an examination of your return will result in a change to your income tax liability,” states an IRS publication, according to AP.Sole proprietors, many of whom have cash businesses, need to be particularly careful about reporting large charitable contributions or home-office expenses if they want to avoid an audit.“If you’re reporting $8,000 of charitable contributions when you’re only making $50,000, that’s a red flag,” Bob Meighan, vice president of TurboTax, told AP. “Likewise if you’re reporting business or employee expenses that are out of the ordinary for your income range, that would attract the interest of the IRS as well.”Elizabeth Maresca, a former IRS lawyer and professor at Fordham University, told the newswire that claiming unusually high employment-related expenses is another red flag that could increase a taxpayer’s DIF score.“I had a case here where the person made about $40,000 and they claimed $25,000 of employment-related expenses,” she said. “Most people don’t spend $25,000 to earn $40,000. That’s an unusual number.”The IRS says it conducts audits primarily to minimize the “tax gap”, which is the difference between what the federal agency is owed and what is actually paid. The National Taxpayer Advocate study found that this gap is largest among small business owners.In 2006 – the most recent year for which the IRS provides an estimate – the tax gap was $345 billion. The study pointed out 350 neighborhood communities whose residents face higher risks of being audited as the IRS attempts to collect more money, particularly from those it believes are well-off. … Read More
5 Govt Videos Every Bit as Terrible as the IRS Star Trek Parody
Just how rotten and outrageous is the IRS’
notorious ;Star Trek ;training video that cost
$60,000 to produce? It’s so bad the William Shatner – the man, the
myth, the legend who played the interplanetary poon hound Capt.
James T. Kirk on the original series – is appalled.
“So I watched that ;IRS ;video. ;I am appalled at
the utter waste of US tax dollars,” ;tweeted
Shatner yesterday.
Say what you will about the star of such cinematic
underachievers as ;Kindom of the Spiders, ;The
Devil’s Rain, Big Bad Mama, and ;Incubus,
an all-Esperanto ;meleagro ;ŝeleto ;(look it
up!), he didn’t directly waste taxpayer dollars while pursuing his
career in stage, screen, and ;spoken-word poetry ;of the
highest order.
While Shatner is absolutely
right to be appalled, the real tragedy is that awful
government-created videos are a dime a dozen.
Here are five more government videos that are every bit as
insulting to the average taxpayer – and moviegoer – as the IRS
Star Trek vid.
We don’t know what they cost to make, but we want our money
back.
NEXT: What Were They Smoking When They Made This
Anti-Drug Reel? (And Can I Get a Dime Bag’s Worth?)
Back in 2007, the prohibitionists at the White House Office of
National Drug Control Policy (ONDCP) created an elaborate website
that followed the adventures of pith-helmet-clad explorer Dr.
Barnard Puck and his assistant Baldrick as they tried to study
potheads in their native habitat. The results were more
embarrassing – yet no less trippy – than a Dude, Where’s My
Car? marathon.
The ONDCP has scrubbed the “Stoners in the Mist” site and its
long-form videos from the web and all that remains (like an LSD
flashback) is this short promo for the series.
NEXT: Worst. Indiana. Jones. Knockoff.
Ever.
Brought to you by the Treasury Department geniuses behind such
disaster flicks as “Too Big To Fail,” “TARP,” and “TARP II,”
“Montana Jones and the Raiders of the Forgotten Bonds” manages to
combine the elaborate-yet-unconvincing setting of ;Land of
the Lost ;with an aimless plot lifted from the
least-interesting porn you could imagine. Suffice it to say it has
something to do with a jungle, a father and daughter, and – wait
for it – savings bonds.
If you’ve ever wondered why Americans don’t save money, it’s
probably because of videos like this one.
NEXT: The U.S. Navy is Full of Old Salts…Who Are High
on BATH SALTS!
Remember the good old days when the Village People sang about
navy life as one big floating party? Those days are over, according
to this December 2012 video from U.S. Navy. Inspired by the
pathbreaking first-person POV first used in 1947′s The Lady in the
Lake ;and random capitalizaton patterns popularized by
Kitten on the Keys, “BATH SALTS: It’s not a fad…It’s a
NIGHTMARE.” includes the best bowling alley action scenes since
Kingpin and The Big Lebowski as our hero
struggles with demons real and imagined in a military setting.
It’s not From Here to Eternity – it only feels like
it.
NEXT: Jesus Died For Somebody’s Sins, But Not for This
Video of the White House Easter Egg Roll.
As this 2009 ;production, “White House Easter Egg Roll
Highlights,” documents, tragedy struck when President Barack Obama
declared that despite the sequester, this year’s Easter Egg
activites would proceed as scheduled.
Kenneth Anger and Luis Bunuel were never so surrealistic
as this terrifying mix of pagan ritual and forced-march frivolity.
“Our goal today is just to have fun,” announces First Lady Michelle
Obama, who
has replaced Easter candy in years since with pre-screened
fruit and hand-washing stations. “We want to focus on activity,
healthy eating. We got yoga, we got dancing, we got
storytelling.”
The result is something darker than all of Bergman – and
in just 2.30 minutes!
NEXT: David Berkowitz, Your White House Dog is
Calling…
Of all the tragic decisions emanating from the Bush
administration, none was more perfectly realized than “Barney Cam
5: Barney’s Holiday Extravaganza,” the official 2006 White House
Christmas video. Featuring an all-star cast that includes George W.
Bush, Laura Bush, Karl Rove, football great Emmitt Smith, and
B-list presidential pets Kitty and Ms. Beasley, the video follows
First Dog Barney in his attempt to stage a celebratory pageant. The
problem is, as Treasury Secretary Hank Paulson explains (a full two
years before he admitted it to the American people), “We’re outta
money.”
The mainstream media announced in early February that Barney
had died this year at the age of 12. As viewers of “Barney Cam
5″ know, that’s way off. He died years ago, about a minute into
this video.
Got other government videos that we should be talking about?
List ‘em and link ‘em in the comments below. … Read More
Indebted California county grants its administrator $400k salary for life
Using taxpayer money, the county’s supervisors are rewarding Administrator Susan Muranishi with a minimum annual salary of $423,664 for the rest of her life – including the years of her retirement.Even though the county is struggling financially, it pays Muranishi significantly more than other US counties pay their administrators. In 2011, Washington County reported paying its administrator $120,228, which is the most it paid any of its salaried county employees. The average salary for a chief administrative officer is $94,992, the International City/Council Management Association reported in 2008.By giving its administrator more than four times as much money than the average American in that position, Alameda County has come under scrutiny for wasteful spending. Locals who heard about Muranishi’s pay have responded to the situation with shock and anger, infuriated that their county is being forced to slash its budget while the richest Americans continue to receive their pay – plus bonuses.“You know, all the money’s going up to the top and everybody at the bottom has to suffer,” Alameda County resident Billy Rodgers told KGO-TV, an ABC affiliate. “That’s a hell of a lot, 423 thousands dollars.”According to state records, Muranishi’s base salary is $302,000, but she receives more than $121,000 in benefits such as equity pay, longevity pay, car allowance and performance bonuses. As a reward for working for the county for more than 30 years, she is receiving an extra $54,000 per year. Her performance bonus tops $24,000 and she receives nearly $9,000 in ‘car allowance’ each year.Muranishi is the highest-paid county administrator in the state of California, and a recent study found that Alameda County’s public employees have the second-highest average salaries in the state.”The obscenely exorbitant salary received by the CAO of Alameda County reveals a fundamental disconnect between our public leaders and ordinary citizens. The ‘guaranteed salary for life’ is particularly galling and will burden Alameda County taxpayers for decades,” Presdeitn of the Howard Jarvis Taxpayers’ Association Jon Coupal told KGO-TV.While Muranishi’s salary tops that of other California county representatives, she does not represent an isolated case of wasteful spending by deficit-ridden governments.Stockton Police Chief Tom Morris retired with a $204,000 pension last year after just eight months on the job. Meanwhile, the former police chief moved to a different city and makes an addition $76,066 salary at a new job while still raking in his retirement from a destitute city. Stockton declared bankruptcy late last year and is now fighting for bankruptcy protection in court throughout the next month.And at a California mental hospital, one state psychiatrist is making $822,302 annually at taxpayers’ expense. About 16 state psychiatrists each rake in more than $400,000 a year, making more than California Governor Jerry Brown.To compensate for these salaries, some cities and counties have been forced to lay-off city workers, slash public services, reduce the number of employed firefighters and police officers, and hold off on construction projects. San Bernardino filed for bankruptcy in Aug. 2012, after having awarded some of its employees with unusually high salaries. Former San Bernardino police chief Keith Kilmer, for example, receives $216,581 a year while also working another job.The city of Chico became California’s latest to undergo government restructuring and reduce the number of city departments from 10 to 5. Facing a $3.5 million structural deficit and dwindling resources, the city has been forced to downsize.While struggling with a massive deficit for years, the state of California has repeatedly been forced to cut its spending at both the local and state level. But as long as county administrators make more than $400k each year, taxpayers will continue to bear the consequences as the money is channeled to those at the top. … Read More
The IRS spent nearly $60,000 in taxpayer funds on “Star Trek” parody video
In 2010, the IRS boldly went “where no government employee has gone before” when it produced a six-minute “Star Trek” parody video, designed to train IRS employees about how to act in B-rated comedy leadership.It begins with the following monologue:”Space: the final frontier These are the voyagers of the Starship Enterprise Y Its never-ending mission is to seek out new tax forms To explore strange new regulations To boldly go where no government employee has gone before.”The video, which features affectless government employees doubling as fist-bumping crew members headed toward planet Notax, is hilarious and jarring and so bad that it’s good until you realize that the government agency paid for the video, along with another spoof of “Gilligan’s Island,” with $60,000 in taxpayer funds for production alone. And then, it’s angering.From CBS, who first obtained the video:Continue Reading… … Read More
How to turn a state liberal
As Colorado goes, so goes the nation. With the culture and demographics of the Intermountain West so rapidly changing, this motto about my home state has become conventional wisdom in national electoral politics, and for good reason. After all, the square state is the capital of the so-called Rocky Mountain Empire, a region that is fast becoming the political equivalent of a test market for the whole country. And if it is true that the way Colorado goes is the way the nation as a whole goes, then America better get ready for some extremely large changes.Part of Colorado’s story of change comes from the statehouse where Democrats control both the governor’s office and both chambers of the Legislature. But as much of the story comes from outside the Capitol, where organic grass-roots uprisings are obliterating old political assumptions.For decades, this was a state whose electoral topography was reliable Republican and whose politics was dominated by an unholy coalition of cultural conservatives and oil and gas interests. In the 1980s and 1990s, it became the national conservative movement in a microcosmic petri dish, passing socially conservative constitutional amendments and a so-called Taxpayer Bill of Rights aimed at pulverizing the public sector.Continue Reading… … Read More
Covered at Reason 24/7: China’s Solar Bubble Bursts
American solar economy supporters like
to point the finger at China solar panel producer Suntech for the
industry’s troubles. They’ve flooded the market with cheap,
subsidized solar panels, making it impossible for American
companies to compete. And that’s why all those bankruptcies of
American companies (many of them subsidized with taxpayer dollars)
happened.
Well, now Suntech has problems of its own.
Agence France-Presse
reports:
Chinese solar panel giant Suntech Power announced Monday that it
was in default on its debt after failing to make a payment on $541
million worth of bonds.
One of the world’s top two solar cell and panel producers,
targeted last year by US trade sanctions, Suntech said it had
already entered an agreement with 60 percent of the bond holders to
hold off legal claims while a debt restructuring can be
negotiated.
The non-payment on the bonds triggered cross-default clauses
with other lenders, putting Suntech in default on debt to the
International Finance Corp. and Chinese domestic lenders.
Follow this story and more at Reason 24/7.
If you have a story that would be of interest to Reason’s
readers please let us know by emailing the 24/7 crew at
24_7@reason.com, or tweet us stories at ;@reason247. … Read More
US misspent billions on fruitless Iraq ‘reconstruction’
One decade after the US invaded Iraq, the reconstruction efforthas been largely deemed a failure. In his final report to Congress,a 171-page assessment titled “Learning from Iraq”, SpecialInspector General for Iraq Reconstruction Stuart Bowen concludedthat the costs of the war far surpassed the results.“You think if you throw money at a problem, you can fix it.It was just not strategic thinking,” Kurdish governmentofficial Qubad Talabani, son of Iraqi president Jalal Talabani,told auditors of the report.“You can fly in a helicopter around Baghdad or other cities,but you cannot point a finger at a single project that was builtand completed by the United States,” Iraq’s acting interiorminister told Bowen, who said that dumping so much money into awarzone simply created a “triangle of political patronage” thatinstigated further corruption.Bowen interviewed numerous American and Iraqi officials, many ofwhom criticized the US for taking on too many large projectswithout consulting Iraqis. When American troops withdrew, many ofthese projects were largely abandoned and Iraq continues to look asbroken as before.Additionally, Americans “wore out [their] welcome” byplanning to “do it all and do it our way” – all whilewasting taxpayer dollars, Deputy Secretary of State William J.Burns told the inspector general.The US has spent more than $60 billion in reconstruction grants,which comes out to about $15 million for each day of the conflict.A $2.4 billion fund set up by Congress to rebuild Iraq’s water andelectricity systems and to provide food, healthcare and governancewas largely wasted. President George W. Bush asked for $20 billionmore just a few months after the March 2003 invasion to accomplishthese goals.Abandoned projects include a 3,6000-bed prison that cost $40million but was never finished or used and a $108 millionwastewater treatment center that still remains unfinished. The USalso spent millions repairing infrastructure they blew up,including a $75 million pipeline and a $29 million bridge innorth-central Iraq. Contractors were also found to have overchargedthe US government for supplies, with one contractor charging thePentagon $900 for a $7 control switch.“Waste and fraud at the levels we saw are a symptom of afailure to have a structure in place to effectively plan forstabilization and reconstruction operations, execute suchoperations and be held accountable for them,” Bowen said in aninterview with Business Week.The failures in Iraq have raised concern over the future ofAfghanistan after the 2014 withdrawal of US troops. The USgovernment has spent $90 billion on reconstruction projects inAfghanistan over the course of 12 years, which US officials areafraid could go to waste if oversight isn’t coordinated better.Ten years after the American invasion of Iraq, the countryremains impoverished and plagued by near-daily deadly bombings. Fewpeople have access to electricity and clean water, and someprojects that the US spent millions on have been reduced to nothingbut rubble.“If we had better controls and better planning, betteroversight, better quality assurance, better quality control all inplace, we would have wasted less – for sure. There is no doubtabout that,” Iraqi Prime Minister Nouri al-Maliki toldBowen. … Read More
