Posts tagged with: Internal Revenue Service

uncle-samIt’s tax day, and though I’m sure you’ve already begun your revelry, I suggest we all take a moment of silence to close our eyes and relish that warm, fuzzy feeling we get when pressured by the IRS to pay up or head to the Big House.

Indeed, with all of the euphemistic Circle-of-Protection talk bouncing around evangelicalism — reminding us of our “moral obligation” to treat political planners as economic masters and the “least of these” as political pawns — we should be jumping for joy at the opportunity. Nuclear warhead funding aside, progressive Christianity has elevated Caesar’s role to a degree that surely warrants some streamers.

Yet, if you’re anything like me, you did the exact opposite, writing off purchases, deducting charitable giving, and — gasp! — trying to get some of your money back. (more…)

29taxes.2-500In an attempt to trap Jesus, some Pharisees and Herodians asked him, “Is it lawful to pay taxes to Caesar, or not? Should we pay them, or should we not?” In response, Jesus said,

“Why put me to the test? Bring me a denarius and let me look at it.” And they brought one. And he said to them, “Whose likeness and inscription is this?” They said to him, “Caesar’s.” Jesus said to them, “Render to Caesar the things that are Caesar’s, and to God the things that are God’s.”

The Pharisees and Herodians “marveled” at Jesus answer, but had they asked an agent of the Roman IRS they likely would have been given a similar answer.

Governments have always had to contend with citizens who make what are considered “frivolous tax arguments” to avoid complying with tax laws. Such arguments rarely work (it’s usually not effective to try to present a creative interpretation of tax law to the people who interpret tax laws) but people keep trying.

The IRS has an entire list of responses to the most common frivolous tax arguments. Here are four of my favorites:
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bitcoin“For federal tax purposes, virtual currency is treated as property.”

With those ten words, the IRS has made it more difficult — if not impossible — for bitcoin and other virtual currencies from gaining widespread, mainstream acceptance as a currency for commercial transactions. Because they are now treated as property, virtual currencies are considered, like stocks, bonds, and other investment property, as capital assets and will be subject to capital gains tax.

But why does this hinder bitcoins use a currency? The answer is fungibility: Bitcoins are no longer completely fungible.
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parsonage (1)On Friday a federal judge ruled that an IRS exemption that gives clergy tax-free housing allowances is unconstitutional. The exemption applies to an estimated 44,000 ministers, priests, rabbis, imams and others. If the ruling stands, some clergy members could experience an estimated 5 to 10 percent cut in take-home pay.

Aside from the question of constitutionality, the clergy exemption raises a question that many people — whether religious or not — are likely to be wondering: Why exactly do ministers receive a tax exemption for their housing allowance?

At the website of the Ethics and Religious Liberty Commission, I explain the historical, legal, and ecclesiological reasons for allowing the exemption and why it’s an issue of religious freedom:
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Blog author: jcarter
posted by on Monday, September 23, 2013

IRS-300x300A few months ago I wrote about how when I was a young Marine I learned that when the commanding officer says, “I wish” or “I desire,” these expressions have the force of a direct order and should be acted upon as if they had given a direct order. If our CO were to say, even in musing to themselves, “I wish there was something that could be done about that,” we knew we should jump into action. The main problem with this custom was when Marines would assume they knew the CO’s desires and wishes — and then act on that assumption.

A similar custom appears to be practiced at the Internal Revenue Service. A new report finds that IRS officials thought it was Obama’s unstated desire for them to crackdown on Tea Party groups:
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IRS-300x300Adopting a child can be a laborious, time-consuming, and expensive process. So why is the IRS trying to make it even more laborious, time-consuming, and expensive? As David French notes, in 2012, the IRS requested additional information from 90 percent of returns claiming the adoption tax credit and went on to actually audit 69 percent:

So Congress implemented a tax credit to facilitate adoption – a process that is so extraordinarily expensive that it is out of reach for many middle-class families — and the IRS responded by implementing an audit campaign that delayed much-needed tax refunds to the very families that needed them the most. Oh, and the return on its investment in this harassment? Slightly more than 1 percent.

This audit wave got almost no media coverage, but what was the experience like for individual families? In a word, grueling. Huge document requests with short turnaround times were followed by lengthy IRS delays in processing, all with no understanding for the unique documentation challenges of international adoption.

Read more . . .

(Via: HotAir)

IRS agents appear to need a refresher course on First Amendment freedoms. While applying for tax-exempt status in 2009, an Iowa-based pro-life group was asked by the agency to provide information about its members’ prayer meetings:

On June 22, 2009, the Coalition for Life of Iowa received a letter from the IRS office in Cincinnati, Ohio, that oversees tax exemptions requesting details about how often members pray and whether their prayers are “considered educational.”
“Please explain how all of your activities, including the prayer meetings held outside of Planned Parenthood, are considered educational as defined under 501(c)(3),” reads the letter, made public by the Thomas More Society, a public interest law firm that collected evidence about the IRS practices. “Organizations exempt under 501(c)(3) may present opinions with scientific or medical facts. Please explain in detail the activities at these prayer meetings. Also, please provide the percentage of time your organizations spends on prayer groups as compared with the other activities of the organization.”

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After the recent admission by the IRS that employees targeted conservative groups, two prominent Christians have come forward claiming they too were harassed for their political views. Franklin Graham, son of the famed evangelist, and Dr. Anne Hendershott, a Catholic professor and author, say they were audited by the IRS after making political statements that criticized liberal political groups.

Franklin Graham recently sent a letter to President Obama saying that he believes his organization was also unfairly targeted for extra scrutiny because the Billy Graham Evangelistic Association urged voters to back “candidates who base their decisions on biblical principles and support the nation of Israel” during last year’s presidential race.

The newspaper ads the group ran concluded with the words: “Vote for biblical values this November 6, and pray with me (Billy Graham) that America will remain one nation under God.” Graham says the ads were purchased with designated funds given by friends of the ministry for that purpose.

Three months prior to the election, both Samaritan’s Purse and the Billy Graham Evangelistic Association received notification from the IRS that a review would be conducted for the tax year ending 2010. Graham says that in light of the subsequent revelations, “I do not believe that the IRS audit of our two organizations last year is a coincidence—or justifiable.”

Similarly, Hendershott says the IRS audited her in 2010 and demanded to know who was paying her and “what their politics were.” The professor says she was surprised she was being audited on business grounds since her freelance activity primarily consists of writing for Catholic outlets for which she receives no pay. Her husband was not included in the audit even though he brings in most of the family’s income and the couple filed a joint tax return.
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This week I wrote about the dignity of paying taxes (among other ways of contributing to social flourishing). But as we know, not all taxes are created equal. Indeed, as Antony Davies and James Harrigan write this week at US News, “Politicians are in the business of buying votes with tax breaks and sweetheart deals for their preferred constituencies, and they have to offset these deals by taxing disfavored constituencies at increased rates. The longer this game is played, the more convoluted the tax code becomes.”

As I argued previously at Capital Commentary, this amounts to a kind of back door social engineering (as well as playing favorites, picking winners, and so on). The fundamental purpose of taxation is not to buy votes and give preference to lobbies and special constituencies. Instead, as I write, “The point of taxation is to raise funds to enable the government to fulfill its moral, political, and social responsibilities.” Such a view is ultimately at odds with a Utilitarian theory, which considers taxation to be a tool rather used “to maximize overall well-being in society.” Matthew Weinzierl argues for greater attention to a theory of Equal Sacrifice, which on Weinzierl’s account “assumes individuals have the first claim to their output, and that they voluntarily agree to form societies that collect taxes in order to purchase public goods.”
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In addition to internal logical inconsistencies which raise serious concerns of long term economic sustainability regarding the Affordable Care Act (ACA), recently analyzed by John MacDhubhain, Robert Pear reports in the New York Times over the weekend how confusion over certain ambiguities in the law (ironically over the meaning of the word “affordable”) would end up hurting some of the people it is precisely designed to help: working class families.

Pear writes,

The new health care law is known as the Affordable Care Act. But Democrats in Congress and advocates for low-income people say coverage may be unaffordable for millions of Americans because of a cramped reading of the law by the administration and by the Internal Revenue Service in particular.

Under rules proposed by the service, some working-class families would be unable to afford family coverage offered by their employers, and yet they would not qualify for subsidies provided by the law.

Read more . . .