irs scandal corruption political purpose

The IRS Is Deplorable
bir tax code irs party

The IRS's Long History of Scandal

The present IRS scandal is just the latest but maybe the last if outrage boils over. These two 2013 excerpts are from (1) The Week Staff, June 8, on IRS history and (2) The Huffington Post on the party scandal, June 4, by G. Van Susteren.

by The Week Staff and by Greta Van Susteren

Franklin D. Roosevelt brazenly used IRS audits as a weapon against conservative publishers William Randolph Hearst and Moses Annenberg, right-wing radio demagogue Father Charles Coughlin, and industrialist Andrew Mellon. FDR would not be alone in succumbing to that temptation. "In almost every administration since the IRS's inception," wrote David Burnham, author of A Law Unto Itself: Power, Politics and the IRS, "the information and power of the tax agency have been mobilized for explicitly political purposes."

In 1951, widespread corruption at the Bureau of Internal Revenue lead to the dismissal of 66 agents for such activities as bribe-taking and extortion. President Harry S. Truman proposed a reorganization in which tax agents would be hired through the civil service, rather than political patronage. Republican Dwight Eisenhower endorsed Truman's reform plans and in 1953 changed the agency's name to the Internal Revenue Service.

In the early 1960s, the IRS responded to President John F. Kennedy's public complaints about tax-exempt conservative groups by setting up the Ideological Organizations Audit Project, which challenged their tax status. In 1969, the Nixon administration set up an IRS unit called the Special Service Staff, which used tax records to assemble dossiers on more than 11,000 groups and individuals. After the 1972 election, Nixon staffers gave the IRS a list of 576 supporters of Democrat George McGovern.

The tax code has been amended 4,680 times in the past 12 years alone and now runs to 74,000 pages. Such "complexity creep" only confirms "taxpayers' suspicions that the tax laws are designed to entrap them and obscure what is and is not being taxed."

Wichita contractor Arthur Porth unsuccessfully argued in a 1954 case that taxation amounts to "involuntary servitude," making it illegal under the 13th Amendment. More recently, a Pennsylvania small-business owner named Larken Rose concocted the so-called 861 argument, named after the section of the code that lays out the sources of taxable income. In Rose's arcane reading of that section, which he turned into a video that sold more than 15,000 copies, only income derived from "international commerce or federal possessions'' is taxable. Courts have repeatedly rejected this reading of the code, and Rose has served 15 months in jail for tax evasion. Nonetheless, actor Wesley Snipes tried a version of the 861 argument to explain why he paid no taxes on $38 million he earned from 1999 to 2004. Unmoved, a judge sentenced him to three years in prison.

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Think about the IRS employees: If any knew what has been going on and did not speak up (no one did), he or she is corrupt. If any employees conveniently looked the other way in order to have deniability, he or she is corrupt. If any should have known and he or she made sure he did not and did not blow the whistle, that person is corrupt. No more excuses.

One IRS conference in Anaheim in 2010 cost 4.1 million dollars. 4.1 million of YOUR dollars to party! How could they possibly think it was okay to take YOUR money to party?

And don't tell me it was a conference -- that is absurd! It was a party. We all know about government conferences -- they are parties. If they were really serious work conferences, they would rent an empty high school gym, get folding chairs and a podium with a microphone. They didn't do that (and it isn't just the IRS -- how about the high flying federal judges in the 9th circuit going to a ritzy resort in Hawaii last year -- and YOU paid for it?!)

I don't know about you... but I am sick and tired of this culture in Washington. I am sick of all the excuses... I am sick of everyone passing the buck and pretending he or she did not know (they all know... you don't send 2600 people to a party in Anaheim and not have the entire IRS know about it)... I am sick of no one taking responsibility. I am sick of the stealing.

The Tea Party was formed back in 2009 by a bunch of hardworking nonpolitical Americans who were just fed up with the way Washington was spending their money. So what happened? The IRS was unleashed to shut them up. Plain and simple -- IRS revenge to shut them up.

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JJS: Americans might not know their history -- IRS scandals are old news -- but maybe this time they’re fed up enough to put a stop to it. And the only way to do that is to abolish the income tax -- and eventually all taxes.

You could replace the income tax with citizenship dues at a flat rate without any exemptions or deductions whatsoever, and if anyone did not want to pay then they’d give up being a citizen. They’d lose the right to vote and to lobby and to contribute to campaigns. Even more impactful, they’d lose the right to get a contract or a subsidy or a citizen’s dividend.

Membership dues in a nation would be low if the federal government only defended national sovereignty, and would be high if the military budget were bloated to finance imperialism. So to attract citizens and dues, most governments would wage peace. And most people, whose dues would be low relative to the size of the dividend, would happily stay citizens just to benefit from the bottom line, even if for no other motive.

Eventually, we could abolish all taxes. Replaces sales taxes and business taxes with charges for depletion and pollution. Replaces property taxes with land dues. Would we still need an IRS? Maybe not. The local assessor could handle land dues. The EPA could handle charges for extraction and emission.

As for citizenship dues, perhaps a toothless IRS could be retained for that, an agency without any power to punish, to fine or confiscate or haul into court. Any and all disputes would be decided in a civil court, not a criminal one. Then government would no longer be a power above people but instead become an organization that’s user-friendly.


Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .

Also see:

Ever Hear of Bradley Birkenfeld?

Taxes Force People to Make Sub-Optimal Choices

Firms Keep Wage Taxes, Don't Pay Profit Taxes

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