Income tax identity theft baffles IRS Things aren't as bad as you think. They are actually worse. http://www.usatoday.com/story/money/columnist/2015/11/14/weisman-tax-identity-theft/75303596/ Income tax identity theft is a huge problem that is only getting worse. According to a 2015 report of the General Accountability Office (GAO), the IRS paid out 5.8 billion dollars in bogus refunds to identity thieves for the tax year 2013 and according to the GAO, the real figure is quite probably higher because of the difficulty of knowing the amount of undetected fraud. (More information at above url)
I don't see that happening. I believe the real risk here to tax-payers including traders is that the escalating issue with identity fraud will make the processing of taxes by the IRS slower and more difficult. This will especially impact individuals such as traders and contractors who pay their own quarterly estimated payments and have more complex taxes.
my point was, here is a man running for president who claims if you just go to a 36K exemption and flat corporate and flat personal you will eliminate the IRS. So who do you report your 36K exemption to? And who do you report your 16% corporate taxes to? And who collects it if you don't pay? And this guy is running for president.
I think many people will also start getting in the habit of ensuring that they owe just a bit every tax year instead of getting a refund. Not enough to pay a penalty/interest, but definitely owe some. That way, if your identity gets hijacked the IRS is waiting on their money instead of the taxpayer fighting to get theirs back. On the Cruz plan...and other "simplifying" and flat tax ideas. In principle, it's a great and simple, wonderful idea. In reality, it has no prayer of ever working in the US. All of the plans have an exemption or two for this thing or that, even if it's just a standard deduction. Exemptions and carve outs are the only means to incentivize behavior - as well as take care of the special interest lobby and punish the other side. There's absolutely no way Washington gives up that weapon. Start with a flat tax with a home interest deduction to encourage home ownership, then Congress adds ten things each year and soon we're right back to what we have now. The tax code isn't the problem, it's the people that made this mess and continue to support & defend it.
Better than our current president who told everyone healthcare would be cheaper if we added millions more people for free. Moron
This won't help. Looks like the ID-jackers are filing false returns, so that the refund they claim to be owed has no relation to the person's actual tax situation. Even if, as in the article, the IRS does a better job of checking e-filed returns against W2's before issuing refunds, a fraudulent filer who got access to someone's W2 could simply add a Schedule C to someone's expected return. They could use this to claim a large amount of phony business losses, offsetting their work income, and thus getting all of the withholding tax returned.
Yes, but at least you're not waiting for a refund while the IRS works through the establishing the fraud.
Not only that, but a flat tax is a terrible idea! There are myriad ways to greatly simplify the tax code or to completely overhaul it. But there is no worse idea than a flat tax. There are good proposals out there. In the meantime we need to put progressiveness and more brackets back into the U.S. income tax structure. Sanders is correct about that. This: https://fairtax.org/about/how-fairtax-works is an interesting idea, but it incorporates no mechanism to prevent the distortion in wealth distribution from continuing to compound. It will result in worsening the distortion over time. That will lead to social unrest and a stagnating economy. Currently too little capital is remaining with the lower economic classes. Any tax proposal that does not address this problem, but instead makes it worse, will lead to trouble.