I believe DCJ commented on this 3 trillion in January

Abusing a tax loophole meant to aid the poor

Each year the Internal Revenue Service receives tax returns that show more income than was actually earned, canada goose outlet germany in some cases twice the actual earnings.

That seems bizarre at first blush. After all, why would canada goose jacket outlet uk anyone tell the tax man they made more than they did?

canada goose coats on sale The answer is thatCongress has created an incentive for the poorest of the working poor to report canada goose outlet eu more than their actual incomes. Doing so can be worth more than $3,000 to impoverished working parents under a form of negative income tax known canada goose outlet toronto address as the Earned Income Tax Credit that sends government money to the working poor. canada goose coats on sale

But it is not the working poor themselves who make up phony numbers. The problem is canada goose outlet washington dc with unscrupulous income canada goose jacket outlet store tax preparers, the IRS Taxpayer Advocate,Nina E. Olson, and others who work with the poor tell me.

Canada Goose Outlet Ginning up nonexistent income lets dishonest tax preparers charge larger fees and helps attract new clients as word canada goose outlet in toronto spreads of canada goose outlet store new york their success at getting big refunds. Canada Goose Outlet

Just last month the Justice Department sued to shut down what it characterized in court papers as a nationwide chain of tax fraud mills that reported inflated incomes and often did not tell people it was filing tax returns for them.

canada goose black friday sale Asked about the allegations,Instant Tax Service general counselTodd Bryant said they were baseless, with a handful of problem cases mischaracterized canada goose discount uk as the norm. canada goose black friday sale

canada goose store The IRS and the Justice Department identified a problem with tax preparers inflating incomes years ago. canada goose store

canada goose clearance sale Abusive tax preparers have been found at canada goose outlet big firms as well as underground operations. Failing to get tough on the abusers makes it hard for the vast majority of honest preparers to prosper, as clients who know nothing about the complexities of canada goose outlet in montreal tax naturally gravitate toward whoever has a canada goose outlet reviews reputation for getting the biggest refunds. canada goose clearance sale

canada goose clearance Congress could fix the problem of canada goose outlet houston exaggerated incomes and at the same time help endAmerica shameful No. 1 ranking among modern nations in child poverty. Sadly, I don expect that, given the focus in both parties on tax cuts for corporations and, among Republicans, on more tax canada goose shop uk cuts for the rich. Indeed, across canada goose outlet black friday sale the country anti tax Republicans have called for ending the Earned Income Tax Credit. canada goose clearance

Canada Goose online Milton Friedman, theChicago School economist and Nobel Prize winner, devised the negative income tax concept decades ago. Friedman demonstrated that people on welfare who go to work could be worse off because of taxes on their earnings. Properly applied, Friedman negative income tax idea can ensure that working makes canada goose outlet ottawa people canada goose jacket outlet toronto better off. Canada Goose online

PresidentRonald Reagan hailed the Earned Income Tax Credit as best buy canada goose uk anti poverty, canada goose womens outlet the best pro family, the best job creation measure to come out ofCongress. He was right. Last year it lifted canada goose outlet mississauga 3.3 million children, and an equal number of adults, out of poverty.

Canada Goose sale Now consider a family with three children that earned $6,000 last year. That may seem extreme, but that was the average wage for a third of American workers in 2010, as I reported in October. Canada Goose sale

However, the family check more than doubles, to $5,751, when a tax preparer falsely inflates their income to $12,800.

Why does the family making $12,800 get more than twice as much as the $6,000 family? BecauseCongress set the maximum tax credit https://www.pick-canadagoose.com for a family with canada goose outlet vancouver three children at wages of $12,800 canada goose outlet new york to $20,800.

buy canada goose jacket The problem of inflated incomes is not with conniving poor people, but with devious tax preparers, everyone I asked about this said. buy canada goose jacket

Nancy Abramowitz, who runs theAmerican University Washington College of Law tax clinic for poor people, said she could not recall any individuals who had inflated their own income to increase the tax credit. always unscrupulous preparers, she said.

Canada Goose Parka Since employers verify wages, tax preparers usually inflate incomes by creating a phony Schedule C, the tax form used by many small businesses, because it is not verified except in canada goose outlet nyc an audit. Canada Goose Parka

cheap Canada Goose Here are four waysCongress and the IRS can fix this: cheap Canada Goose

buy canada goose jacket cheap Congress should lower the threshold for securing the maximum credit for families with children from $12,800 to the average wage of the bottom third of workers, currently about $6,000. buy canada goose jacket cheap

Congress should pay for the prosecution of as many corrupt tax return preparers as it takes canada goose outlet black friday to stop this fraud, including $3,000 rewards to taxpayers who turn in canada goose outlet canada corrupt preparers. Any action by the IRS, not just convictions, should generate a reward check. The reward I propose equals the maximum fraud loss from a single case, making it cost efficient providedCongress requires the IRS to be generous, not stingy, in rewarding whistleblowers.

canada goose coats Congress canada goose outlet florida should delay tax credit refunds for 45 days after a tax canada goose outlet toronto return is filed. Olson, the IRS taxpayer advocate, told me that speeding refunds encourages fraud. TheUnited States is unusual in trying to refund money canada goose factory outlet toronto location instantly, instead of taking time to make sure payments are proper before cutting checks. canada goose coats

For the next few years the 40 percent of IRS correspondence audits that now deal with the Earned Income Tax Credit should concentrate on faked Schedule Cs that inflate incomes.

canada goose deals The focus should be on making work rewarding, not on hurting the working poor. canada goose deals

canadian goose jacket Dodging taxes is a game, just as cheating on tests is a game. A system in which it is stupid not canada goose outlet store uk to lie, or a system where lying is an ease of desperation are all corrupting. But is it any wonder when CEO get bonuses for cutting jobs. As above, So below, as Hermes said long ago. When bankers and hedge fund managers can purchase laws so that whatever they choose to do is not illegal is there any wonder that kids cheat on tests and some folks cheat on taxes. Our system is not only corrupt. It is corrupting. canadian goose jacket

Sorry for being so downbeat, but I just bounced here from cheatingculture dot com where one article mentioned three trillion lost to tax cheats, and you can bet that the big money did not go to those who bilk or mislead the poor. I believe DCJ commented on this 3 trillion in January.

Posted by TheOldSodbuster Report as abusive

canada goose As well, the IRS examines a substantial percentage of those claiming the earned income tax credit and disallows the credit to those canada goose outlet online with false or exaggerated Schedules C, children or canada goose outlet website legit the like, and then makes an assessment again the low income individual. That individual, not the unscrupulous preparer, then owes the money to the IRS. Sometimes, the IRS files a federal tax lien against the individual, and that individual credit rating is ruined for years. Also, some unscrupulous preparers arrange for the refund to be wired to the preparer bank account, provides the individual taxpayer with a cash refund, and has the individual sign a receipt for a refund corresponding to that claimed, but provides a smaller cash refund. In all, often this well intentioned program turns out to be most damaging to many low income taxpayers, and richly rewarding to the fleecing preparer canada goose.

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