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CrimeAndPunishment

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CrimeAndPunishment
  • Applicant

Hopefully we can have a nice tax law discussion in this forum, we hear a lot of people talk about wealth inequality nowadays and there is no better area to deal with this than tax law! So get in the kitchen and make a double Irish with a Dutch sandwich 😉 

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Salazar
  • Law Student

As a 1L, I’d be interesting in knowing what tax law actually entails. What do tax lawyers actually do? What does a day in the life of a tax lawyer look like?

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leafs_law
  • Lawyer

I will see if I can get my tax lawyer friend who was active on LS to post here. Although, full disclosure required, the only reason to be friends with a tax lawyer is to get the charity donation credit associated with it 🙂

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Kurrika

https://www.propublica.org/article/the-secret-irs-files-short-form-a-quick-guide-to-what-we-uncovered

 

Quote

ProPublica has obtained a vast trove of IRS data on the tax returns of thousands of the wealthiest people. It reveals just how effectively the richest sidestep the tax system, which we’ll show below. But first, to understand the scale of that wealth, let’s look at the richest person in the United States: Jeff Bezos.

 

American, but it looks like some IRS data leaked?

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Kurrika
Posted (edited)

https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax

 

Longer form article

 

Quote

ProPublica has obtained a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years. The data provides an unprecedented look inside the financial lives of America’s titans, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. It shows not just their income and taxes, but also their investments, stock trades, gambling winnings and even the results of audits.

Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year.

Many Americans live paycheck to paycheck, amassing little wealth and paying the federal government a percentage of their income that rises if they earn more. In recent years, the median American household earned about $70,000 annually and paid 14% in federal taxes. The highest income tax rate, 37%, kicked in this year, for couples, on earnings above $628,300.

The confidential tax records obtained by ProPublica show that the ultrarich effectively sidestep this system.

 

Edited by Kurrika
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Jaggers

I saw a lot of tweets about that article, but is there anything new in it?  Like, it compares people earning regular employment income to the amount that business owners' "fortunes grow every year". This particular aspect of our tax system is pretty well known. That growth hasn't been taxed yet.

 

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Kurrika
Posted (edited)
3 minutes ago, Jaggers said:

I saw a lot of tweets about that article, but is there anything new in it?  Like, it compares people earning regular employment income to the amount that business owners' "fortunes grow every year". This particular aspect of our tax system is pretty well known. That growth hasn't been taxed yet.

 

They've focused a lot on pregnant gains.

 

I'm less interested in that particular policy issue and more on the leak part of it.

Edited by Kurrika
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Kurrika
Posted (edited)

For an american audience though, having specific names and graphs and numbers and such may be persuasive or make a policy debate resonate? 

 

It can sometimes feel very random what pieces of tax information resonates with the public or what policy issues they suddenly care about.

I think in Canada at least, that this is partly due to the fact that reporting on tax stuff is pretty dogshit. Only a couple of them actually bother to try to understand what is going on.  Most articles are 95 per cent word for word copies of either background stuff put out by the government or background stuff put out by a stakeholder / accounting firm / the canadian taxpayers federation.

Edited by Kurrika
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Jaggers

They published their thinking behind the article too:

https://www.propublica.org/article/why-we-are-publishing-the-tax-secrets-of-the-001
 

Quote

 

We obtained the information from an anonymous source who provided us with large amounts of information on the ultrawealthy, everything from the taxes they paid to the income they reported to the profits from their stock trades.

We do not know the identity of our source. We did not solicit the information they sent us. The source says they were motivated by our previous coverage of issues surrounding the IRS and tax enforcement, but we do not know for certain that is true. We have considered the possibility that information we have received could have come from a state actor hostile to American interests.

Provenance is not essential; accuracy is. We have gone to considerable lengths to confirm that the information sent to us is accurate. We compared the tax data in our possession to other sources of the same information wherever we could find them, some of which were public (a tax return for a candidate for national office), others of which were private. In every instance we were able to check — involving tax filings by more than 50 separate people — the details provided to ProPublica matched the information from other sources.

 

 

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Kurrika
Posted (edited)

The state actor angle is wild.  "Either your IRS staff has gone rogue and walked out of the building with a usb drive  or everyone's tax records got hacked.... Care to comment IRS?"

Edited by Kurrika
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Chambertin
  • Lawyer

I'm kind of with Kurrika, the tax aspect of it is dumb and clearly driven to produce clicks. 

 

The leak part is kind of interesting. You have to wonder if there is a contingent within the IRS that sort of thinks we can't stop these people, maybe we can shame/outrage the public enough to do something. 

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realpseudonym
  • Lawyer
On 6/7/2021 at 10:38 PM, leafs_law said:

the only reason to be friends with a tax lawyer is to get the charity donation credit associated with it 🙂

I was also promised access to a timeshare in a tropical tax haven 🙂 

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CrimeAndPunishment
  • Applicant
Posted (edited)
5 hours ago, Chambertin said:

I'm kind of with Kurrika, the tax aspect of it is dumb and clearly driven to produce clicks. 

 

The leak part is kind of interesting. You have to wonder if there is a contingent within the IRS that sort of thinks we can't stop these people, maybe we can shame/outrage the public enough to do something. 

They essentially want to tax additional wealth, "In the coming months, we plan to use this material to explore how the nation’s wealthiest people — roughly the .001% — exploit the structure of our tax code to avoid the tax burdens borne by ordinary citizens." This would be like if you have a cottage and a house and the real estate market is going up, we don't tax the citizen on the market value of the property every year if the value of the cottage increases, we wait until they dispose of the property and any gain or loss is realized. I agree with their point of making tax returns public information however. 

Edited by CrimeAndPunishment
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Skweemish
  • Lawyer

Well I feel foolish, I made a tax thread in the practitioner discussion subforum because I didn't see this thread. BUT HONESTLY WHO PUTS TAX LAW UNDER CORPORATE IT IS CLEARLY AN INDEPENDENT DISCIPLINE-

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