Saturday, July 29, 2006
An editorial in the New York Times, More Hope for the Truly Rich (July 27, 2006), says the plan to eliminate 157 estate tax attorney positions, previously blogged here, appears politically motivated.
The I.R.S. says the layoffs are warranted because the Bush tax cuts mean fewer people are obliged to pay estate taxes.
That’s not very reassuring. Fewer smaller estates — currently, those worth up to $2 million are exempt — are subject to the tax today than when Mr. Bush first took office. But large estates are still taxed, and with inequalities in income and wealth producing ever more billionaires and millionaires, there’s ever more gold in those hills for auditors to mine.
Still, the I.R.S. says it is confident it is catching most tax cheaters since auditing of 10% of estate tax returns accounts for 80% of additional taxes. However, until 2004, the I.R.S. released information to Syracuse University research organization Trac containing
comprehensive I.R.S. audit figures — by size of the estate, the number of hours spent and the amount of extra recommended tax. Researchers analyzed the data and posted it on the organization’s Web site, so the public had a continuing sense of the I.R.S’s fairness, efficiency and effectiveness.
However, upon receiving the request in the following years, the I.R.S did not release the information. Though ordered by a Federal court in 2006 to release the information, the data released was not nearly as comprehensive. “If the I.R.S. wants to avoid suspicion that its actions are politically motivated, it should release all the data that researchers need to evaluate its actions.” (NYTimes.com)