Tag: taxes

Ticketmaster, PayPal, eBay are hassling customers to report sales even though the IRS says they don’t have to

People are being told they need to provide their Social Security numbers to online platforms and cash transfer app companies for the sales of things like clothes and concert tickets over $600, even though the IRS says they don’t need to.

The prompts from companies like eBay and Ticketmaster are the result of a change in the tax law that was reneged last-minute by the IRS ahead of the 2023 tax filing season.

The switch is causing a lot of confusion among taxpayers and tax professionals — and even within the IRS itself.

The threshold for reporting business income or personal income from using these apps was supposed to change this year. It was downgraded from sales above $20,000 to sales of above just $600 and was part of a provision passed in the 2021 American Rescue Plan.

That means you’d need to pay a capital gains tax on sales worth more than $600 if you used these apps to receive a payment.

But the IRS decided to delay this rule change from tax season 2023 to tax season 2024, citing “confusion during the … 2023 tax filing season” and the need to “provide more time for taxpayers to prepare and understand the new reporting requirements.”

The IRS said some taxpayers may be receiving 1099-K forms “in error.”

“Some individuals may receive a Form 1099-K for the sale of personal items or in situations where they received a Form 1099-K in error (i.e. for transactions between friends and family, or expense sharing),” the agency said in a statement.

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No Math Behind San Francisco’s $5M-per-Person Reparations Proposal

No mathematical calculations justify a San Francisco committee’s recent proposal to provide $5 million in reparations to long-term black residents of the city, according to a report by the Washington Post.

As Breitbart News reported last month, the committee, formed in 2020 amid the Black Lives Matter movement, “proposed that each long-term black resident of the city receive $5 million, though California entered the Union as a free state in 1850.”

The proposal came despite the fact that the city is facing a staggering budget deficit as businesses and residents have fled.

Now, the Washington Post reports, “conservatives” (among others) are questioning the price tag, which was largely invented out of thin air:

“There wasn’t a math formula,” said Eric McDonnell, chair of the reparations committee and the principal of Peacock Partnerships, a San Francisco-based consulting firm. “It was a journey for the committee towards what could represent a significant enough investment in families to put them on this path to economic well-being, growth and vitality that chattel slavery and all the policies that flowed from it destroyed.”

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San Francisco’s $5 million proposal, magnitudes larger than amounts being discussed in other communities, has drawn intense backlash from conservatives who lambaste the idea as financially ruinous for a city with an annual budget of $14 billion that is still recovering economically from the pandemic. The proposal doesn’t explain who would qualify, but if even a fraction of the city’s 50,000 Black residents met the criteria, it would consume a huge amount of the city’s annual budget.

Separately, the State of California has its own reparations committee, which recently considered a more modest proposal to pay each black descendant of slavery up to $233,000 in reparations.

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When the Government Makes Poverty Worse

For individuals struggling to make ends meet, the government might be causing more problems than it is solving.

As part of a new report released Monday, a survey of more than 1,000 low-income Pennsylvanians found that taxes are often a major barrier to economic security—ranking ahead of more commonly discussed problems such as credit card debt and student loans. Among those surveyed, all of whom have incomes below 200 percent of the federal poverty level (about $53,000 annually for a family of four), the average respondent reported paying $4,575 per year in taxes.

Elizabeth Stelle, director of policy analysis for the Commonwealth Foundation, the pro-market think tank that published the report, says the data should prompt officials to rethink some of the root causes of poverty in the state and across the country.

“Before we start talking about more ways to alleviate the symptoms of poverty,” Stelle says, “we need to take a step back and think about what obstacles the government has in place right now that are holding back people that are limiting prosperity.”

That’s not the only common myth that the new report aims to bust. Here’s another: Most poor Pennsylvanians (63 percent) work or are currently seeking a job. Meanwhile, the report also found that poverty is not exclusively a crisis for cities and other urban areas. In fact, of the five Pennsylvania counties with the highest poverty rates, four are found in sparsely populated rural areas (the fifth is Philadelphia).

Poverty in Forest County—deep in the wilderness of the Allegheny Mountains southeast of Erie—is far different from poverty in Philadelphia. Stelle sees that as an argument against one-size-fits-all government-based poverty reduction schemes, which can fail to take into account the needs of individuals in such diverse economic environments.

Though the report surveys only a single state, Pennsylvania is a useful political and economic microcosm for the country as a whole. It has urban pockets, sprawling and prosperous suburbs, an industrial legacy, and widespread rural areas that are often overlooked. It remains a crucial swing state and a political bellwether—its state legislature is currently enduring a weeks-long crisis that makes Speaker of the House Kevin McCarthy’s election look tame by comparison. As such, it’s an important laboratory of democracy and a state where shifting views on policy can have national implications.

Pennsylvania has increased spending on social welfare programs over the past few decades, but the poverty rate in the state has remained stubbornly flat, the report shows. The paper asks officials to consider a counterfactual history: If Pennsylvania had enacted a rule in 2003 that capped future government spending increases at a combination of inflation and population growth (and had returned the surplus to taxpayers), the average low-income resident of the state would have an extra $20,000 in the bank today, simply due to the lower tax burden.

That’s a messier solution to poverty than drawing up government programs that specifically target people living in certain conditions. But it’s one that would empower every individual in the state to make their own decisions about how to pursue prosperity.

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The Cost of the Nation’s Endless Wars

To hear President Biden talk about the Russia’s aggression against Ukraine, you might imagine that Putin is the only dictator bent on expanding his military empire through the use of occupation, aggression and oppression.

Yet the United States is no better, having spent much of the past half-century policing the globe, occupying other countries, and waging endless wars.

What most Americans fail to recognize is that these ongoing wars have little to do with keeping the country safe and everything to do with propping up a military industrial complex that has its sights set on world domination.

War has become a huge money-making venture, and the U.S. government, with its vast military empire, is one of its best buyers and sellers.

America’s part in the showdown between Russia and the Ukraine has already cost taxpayers more than $112 billion and shows no signs of abating.

Clearly, it’s time for the U.S. government to stop policing the globe.

The U.S. military reportedly has more than 1.3 million men and women on active duty, with more than 200,000 of them stationed overseas in nearly every country in the world.

American troops are stationed in Somalia, Iraq and Syria. In Germany, South Korea and Japan. In Saudi Arabia, Jordan and Oman. In Niger, Chad and Mali. In Turkey, the Philippines, and northern Australia.

Those numbers are likely significantly higher in keeping with the Pentagon’s policy of not fully disclosing where and how many troops are deployed for the sake of “operational security and denying the enemy any advantage.” As investigative journalist David Vine explains, “Although few Americans realize it, the United States likely has more bases in foreign lands than any other people, nation, or empire in history.”

Incredibly, America’s military forces aren’t being deployed abroad to protect our freedoms here at home. Rather, they’re being used to guard oil fields, build foreign infrastructure and protect the financial interests of the corporate elite. In fact, the United States military spends about $81 billion a year just to protect oil supplies around the world.

The reach of America’s military empire includes close to 800 bases in as many as 160 countries, operated at a cost of more than $156 billion annually. As Vine reports, “Even US military resorts and recreation areas in places like the Bavarian Alps and Seoul, South Korea, are bases of a kind. Worldwide, the military runs more than 170 golf courses.”

This is how a military empire occupies the globe.

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US Military Aid To Ukraine Exceeds The Costs Of Afghanistan

Ukraine receives the most military aid from the United States: Since the beginning of the war and as of Jan. 15, 2023, $46.6 billion in financial aid for military purposes has flowed to the country now at war with Russia.

When calculating the average annual costs (in 2022 prices) of previous wars in which the United States has been involved in, the true magnitude of the country’s Ukraine aid expenditure can be seen.

As Statista’s Martin Armstrong shows in the infographic below, the payments to Ukraine have already exceeded the annual military expenditure of the U.S. in the war in Afghanistan from 2001 to 2010. The U.S. military costs in the Vietnam War, the Iraq War and the Korean War were significantly higher – according to calculations by the Kiel Institute for the World Economy as part of its Ukraine Support Tracker.

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The Case for Abolishing the IRS

The American public has long held an unfavorable view of the Internal Revenue Service, as evidenced by several historical surveys. A Gallup poll taken more than 25 years ago in October 1997 found that 69 percent of the American public held the opinion that the IRS “frequently abuse[d] its powers.” Fast forward to October 2022, when another Gallup poll was taken on the American public’s job-performance rating of 11 federal agencies. The poll ranked the IRS dead last, with only 34 percent of Americans regarding the job performance of the IRS as “excellent/good.”

Another poll released by the Pew Research Center in March 2015 on the “complexity of the tax system” indicated that 72 percent of the American public were at least somewhat bothered by the complexity, and 44 percent were a lot bothered by it. Public concern over the complexity of the federal tax code is certainly understandable when you consider that the body of law that codifies all federal tax laws, the Internal Revenue Code (U.S. Code Title 26), comprised 6,979 pages as of year-end 2022.

Aside from the American public’s unfavorable view of the tax system, there is a real economic reason for addressing its complexity: the enormous cost of compliance for the American taxpayer, both individual and corporate. The Tax Foundation issued a report in August 2022 estimating that “Americans [would] spend over 6.5 billion hours complying with IRS tax filing and reporting requirements in 2022.” This equates to approximately 3.1 million full-time workers focused entirely on federal tax compliance.

The Tax Foundation estimates that the monetary cost of compliance based on its estimated 6.5 billion work hours would at minimum amount to $313 billion in 2022 — nearly 25 times greater than the IRS’s $12.6 billion 2022 budget with a workforce of approximately 80,000 employees.

An additional unknown cost of significant size is the time spent by American taxpayers in calling the IRS for tax-filing assistance. Based on information from the IRS’s Taxpayer Advocate Service, Americans made 72.8 million calls to the IRS in 2022 seeking help. Only 7.4 million calls were answered — just over 10 percent — and these had an average wait time of 28 minutes.

The Taxpayer Advocate Service, an independent organization within the IRS established in 1996 to help Americans address federal tax problems, issues an annual report to Congress every January with an assessment of the IRS’s prior-year operations and some legislative recommendations. The recommendations typically include more amendments to the Internal Revenue Code, more IRS rules and rule revisions, more funding from Congress, expanding jurisdiction of the U.S. Tax Court, and more mandates on the private sector, such as establishing new IRS competency standards for tax preparers. Hence, these ongoing annual recommendations, while well-intentioned, only serve to tinker with a massive system already fundamentally broken and beyond repair.

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Gun-Toting Wing of IRS Wants to ‘Put the Fear of God in People’: Ex-Agent

As the Internal Revenue Service seeks to bolster the ranks of its weapon-carrying Criminal Investigation unit, a former special agent described the inner workings of the division and said its key function is “to put the fear of God in people” and intimidate Americans into tax compliance.

Former IRS Special Agent Robert Nordlander told Accounting Today, in a wide-ranging interview published on Feb. 20, that while most Americans have a sense of what IRS tax audits look like, the work of the IRS Criminal Investigation (IRS-CI) unit is shrouded in some mystery.

Dubbed “gun-toters,” the armed special agents in the unit are responsible for enforcing those parts of tax code whose violations amount to crimes, he said. “When crimes are committed, the IRS-CI are the ones that actually enforce” the law, Nordlander said.

The IRS-CI examines potential criminal activity related to tax crimes and makes recommendations for prosecution to the tax division of the Department of Justice (DOJ).

There are now around 2,100 “gun-toters” in the criminal investigations division, and the IRS—flush with funds from a new cash injection—is looking to hire more special agents.

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SEC Charges Mormon Church For Concealing $32 Billion Portfolio

The Securities and Exchange Commission (SEC) has charged an investment arm of the Mormon church for disclosure failures and misstated filings.

Ensign Peak, a nonprofit entity operated by the Church of Jesus Christ of Later-day Saints, agreed to pay a $4 million penalty for failing to file forms that would have disclosed the church’s equity investments, and instead filing forms for shell companies that concealed the Church’s portfolio – as well as misstated Ensign Peak’s control over investment decisions, according to the Wall Street Journal.

The church, which requires its members give 10% of their income in the form of tithing, itself agreed to pay a $1 million penalty, according to the SEC.

The SEC’s order finds that, from 1997 through 2019, Ensign Peak failed to file Forms 13F, the forms on which investment managers are required to disclose the value of certain securities they manage. According to the order, the Church was concerned that disclosure of its portfolio, which by 2018 grew to approximately $32 billion, would lead to negative consequences. To obscure the amount of the Church’s portfolio, and with the Church’s knowledge and approval, Ensign Peak created thirteen shell LLCs, ostensibly with locations throughout the U.S., and filed Forms 13F in the names of these LLCs rather than in Ensign Peak’s name. The order finds that Ensign Peak maintained investment discretion over all relevant securities, that it controlled the shell companies, and that it directed nominee “business managers,” most of whom were employed by the Church, to sign the Commission filings. The shell LLCs’ Forms 13F misstated, among other things, that the LLCs had sole investment and voting discretion over the securities. In reality, the SEC’s order finds, Ensign Peak retained control over all investment and voting decisions. -SEC

“We allege that the LDS Church’s investment manager, with the Church’s knowledge, went to great lengths to avoid disclosing the Church’s investments, depriving the Commission and the investing public of accurate market information,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “The requirement to file timely and accurate information on Forms 13F applies to all institutional investment managers, including non-profit and charitable organizations.”

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President Biden Makes Surprise Visit To Kyiv, Pledges New Military Aid

President Biden departed from Joint Base Andrews in Prince George’s County, Maryland, early Sunday morning. He stopped at Ramstein Air Base in Germany before making an unannounced visit to Ukraine on Monday morning. The visit comes ahead of the first anniversary of Russia’s invasion of Ukraine.

Biden’s visit comes as Russia prepares for a massive spring offensive. Western countries are racing to flood Ukraine with new weaponry, including main battle tanks and armored vehicles. Biden delivered remarks alongside President Volodymyr Zelenskyy at Mariinsky Palace in Kyiv and announced new military aid worth $500 million, according to AP News. The new military aid includes anti-tank missiles, air-surveillance radars, howitzers, shells, ammunition and other support, but no new advanced weaponry.

“I thought it was critical that there not be any doubt, none whatsoever, about US support for Ukraine in the war,” Biden said in joint remarks with Zelenskyy. He said, “I’m here to show our unwavering support for the nation’s independence, sovereignty, and territorial integrity.”

Zelenskyy thanked Biden for coming to Kyiv “at a huge moment for Ukraine.” He said he and the US president would hold talks about the war and what’s happening on the frontlines and also “about the people, about Ukrainians, about Americans . . . what we have to do to stop the war, to have success in this war . . . and how to win this year”.

Biden said, “I am meeting with President Zelenskyy and his team for an extended discussion on our support for Ukraine.” He added that Russian President Vladimir Putin was “dead wrong,” believing he could instantly take Ukraine during the invasion nearly one year ago.

“Over the last year, the United States has built a coalition of nations from the Atlantic to the Pacific to help defend Ukraine with unprecedented military, economic, and humanitarian support – and that support will endure,” he continued.

Biden also said, “We will announce additional sanctions against elites and companies that are trying to evade or backfill Russia’s war machine.”

The president’s social media team was busy tweeting this morning.

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On target? Democrats AND Republicans write to Biden demanding he send F-16 jets to Ukraine so its troops can dominate Russia ahead of Putin’s spring offensive

A bipartisan group of House members wrote to President Biden this week to urge him to send fighter jets to Ukraine in a move that would escalate U.S. involvement in the nation’s war with Ukraine. 

Five House members said modern jets like the F-16 ‘could prove decisive for control of Ukrainian airspace this year.’ Kyiv has long urged the U.S. to provide fighter jets, but President Biden weeks ago told reporters he would not.

The letter was led by Maine Democrat Rep. Jared Golden, with GOP Reps. Tony Gonzales, Texas, and Mike Gallagher, Wis., and Democratic Reps. Chrissy Houlahan, Pa., and Jason Crow, Colo., signing on. All five have military experience. 

The bipartisan group first praised Biden for his continued support for Ukraine, before asking him to send the F-16 Fighting Falcon aircraft or similar fourth-generation aircraft ‘as soon as possible.’ 

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