Bush’s IRS Refuses to Collect Corporate Taxes

David Cay Johnston, one of the best business reporters in the country, has a story in todays NYT that exposes the way the Bush Administration uses the IRS to unilaterally cut the taxes corporations might otherwise actually have to pay.

Top officials at the Internal Revenue Service are pushing agents to prematurely close audits of big companies with agreements to have them pay only a fraction of the additional taxes that could be collected, according to dozens of I.R.S. employees who say that the policy is costing the government billions of dollars a year.“It’s catch and release,” said Douglas R. Johnson, an I.R.S. auditor in Colorado for three decades who said he grew so frustrated at how large corporations were allowed to pay far less than what he thought they owed that he transferred to the agency’s small-business division.

With one exception, other working agents would talk about the issue only on condition they not be identified because they feared being fired. They said a policy intended to avoid delays in auditing corporations was being pushed so rigidly that it prevented them from pursuing numerous examples of questionable corporate tax deductions.


[A]uditors said they were told to limit questioning only to those specific issues that the I.R.S. and the companies had agreed in advance to examine. When other questionable deductions emerged in the course of the audit, they said, additional taxes were ignored.

Rank-and-file auditors said that the sharp rise in tax dollars collected per hour of audit was not a sign of an improved auditing system but simply reflected the fact that abusive and illegal tax shelters had become so common that it was easy to find additional taxes due. (emphasis added)

The bolded portion above shows just how interlocked the relationship has become between the Bush Admin and the corporations it’s supposed to be separate from. Even though the corporatocracy has bought a record number of tax breaks from the Bush Admin and its puppet Pub Congress over the past six years, they still want more, and Bush’s IRS management team is going to make sure they get it. You try to rush an audit and see what happens.

This is a prime example of the Great Risk Shift – the way the corporatocracy uses govt to shift the burden of taxation onto the backs of the rest of us by paying so little of what they actually owe that you could put it in your pocketbook and have room left over for the IRS manuals that explain what they’re supposed to pay.

The agents – figuring that somebody’s going to catch on somewhere along the line – are covering their asses like mad, leaving notations on case files that point straight to upper level officials. One reluctantly has to conclude that they’re being somewhat optimistic.

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