American Elephants


Obama’s Scandals: Not Funny Anymore. by The Elephant's Child

U.S. Treasury Secretary Jack Lew has chimed in on the IRS “Lost Emails Scandal:

  • Lew: “Sometimes a broken hard drive is just a broken hard drive.”

From Zero Hedge: “perhaps the NY Post put it best: The thing about dogs eating homework is, it could actually happen. This can’t. This is “The dog ate my hard drive, broke into another building, ate the backup of the hard drive, then broke into six other top officials’ offices and ate their hard drives also.”

20140624_IRS

 



“Political Posturing, Phony Scandals” and Talking Points. by The Elephant's Child

But over the past couple of years in particular, Washington has taken its eye off the ball.  An endless parade of distractions, political posturing and phony scandals shift focus from what needs to be done. 
— President Barack Obama, Wednesday July 26, 2013

Oddly enough, the scandals (plural) only became “phony” just days after a retiring  IRS lawyer implicated the IRS chief counsel’s office, headed by an Obama appointee, as well as the head of the IRS’ exempt organizations office.

“In Thursday’s hearing before the House Oversight Committee, 72-year-old retiring IRS lawyer Carter Hull implicated the IRS chief counsel’s office headed by William J. Wilkins, who attended at least nine White House meetings, and Lois Lerner, head of the exempt-organizations office, in the IRS scandal.”

In so doing, he made clear the targeting of Tea Party groups started in Washington and was directed from Washington.reported Investors.

“Former White House senior adviser David Axlerod on Friday called the IRS’ inappropriate targeting of mainly conservative political advocacy groups applying for nonprofit status “stupid and disturbing” but argued that there are far more pressing issues for the country to deal with.

I think the behavior was something that needs to be corrected, but I don’t think that it was the political scandal that was [there], Mr. Axlerod said on MSNBC”s “Morning Joe.

Noting that President Obama has already replaced the top leadership at the tax agency, Mr. Axlerod added, “I think all these hearings searching for the smoking fun of a political scandal where the White House or someone in [a} high place ordered this — I think that is a phony deal. I don’t think that’s the real issue reported,” the Washington Times.

National Review tells the story of “a tea party group targeted by Democrats gets attention from the IRS —and the FBI, OSHA, and the ATF.” Catherine Engelbrecht’s story of her family’s three-year ordeal is both credible and chilling.  You need to read the whole thing. And she is not alone, there are many other cases. Frank VanderSloot, an Idaho businessman and Romney campaign donor, was threatened, slandered, audited, and audited again. No fine, no penalty, but his legal bills ran about $80,000. The stories abound. Dozens and dozens of conservative groups were targeted by IRS audits, endless questions, requests for more information, targeting by other agencies, anything that could delay the 501(c)(4) status that would enable deductible donations. There certainly seemed to be an official effort to neutralize individual donors and groups who were supporting Mitt Romney, in an attempt to influence the outcome of the election.

The National Law Journal asked “Why Should the Internal Revenue Service Be Beyond Reproach?”

The Internal Revenue Service in recent weeks has acknowledged that it targeted applicants for tax-exempt organization status based on their political viewpoint, in violation of basic First Amendment principles. That was, obviously and admittedly, a big mistake….Imagine that some Tea Party groups subjected to special monitoring by the IRS were considering suing the agency for violations of their speech, association and equal protection rights. If the Internal Revenue Code imposed a large fine on anyone who unsuccessfully sued the IRS, we would all recognize that as an impermissible penalty on the right to petition. Yet that’s exactly how the refund penalty provision works. Imposing a penalty will deter people from seeking refunds in close cases, out of fear that if they lose, they could end up owing a hefty fine. By deterring refund claims, the IRS insulates its own decision-making from legal challenges and impairs citizens’ rights to seek relief from their own elected government.

The Supreme Court has guarded this right assiduously. The right covers petitioning the legislature, the executive branch or the courts. It prohibits any sanction — whether a fine, tort liability or even a retaliatory investigation — on the right to petition.

The president, prior to deciding it was a phony scandal, said he wasn’t going to stand for any misbehavior at the IRS and fired Acting Commissioner Steven Miller, but it turned out that Miller was due to retire in a couple of weeks anyway.

The new acting commissioner of the IRS is Daniel Werfel, who has risen through the ranks as a civil servant, primarily at the OMB and as a lawyer in the Justice Department.  He has already announced that “inappropriate screening was used more broadly than disclosed.” There were some inappropriate BOLO lists (Be On The Lookout), but he just hasn’t been able to find any evidence of intentional wrongdoing.  Nothing to see here, just move along. Can you spell c-o-v-e-r-u-p?

Jeffrey Zients, former acting OMB head who met with IRS officials at the White House during the targeting scandal, has been out of the country since April, and has not yet returned.

When the IRS targeting scandal broke in May, both the Obama administration and the mainstream media took it quite seriously. Even MSNBC’s Chis Hayes called the selective screening of conservative groups a “genuine abuse of power” at the time.

The evening and morning shows did 96 stories in the first two weeks according to the Media Research Council. The coverage steadily disappeared, and between June 28 and July 24, the Center recorded “zero stories” on the matter. When a major development broke last week — testimony by a retired IRS worker that an Obama appointee was involved in the screening process, only CBS evening news reported it.

In early June, the Democratic National Committee sent a memo to reporters declaring that the word to describe the GOP’s reaction to the Obama administration’s  scandals was “overreach,”  Salon published an article on the IRS issue asserting that in the end, “the entire scandal narrative was a fiction.”

The White House invited selected reporters to attend an off-the-record briefing with White House Chief of Staff, Denis McDonough, in mid June. The White House had been criticized in the previous week after details of the NSA’s surveillance was leaked. About 24 reporters were already in the meeting when the President arrived to discuss his thoughts on recent events — although they were not able to report on what was said. Some reporters said they would not have attended had they known the President would be attending. Getting answers on the record, New York Times reporter Peter Baker said, after all, is our job.

Obama did not specify just which scandals were “phony” and “political posturing” but the administration has been attacked over the National Security Agency’s surveillance programs leaked to the public; the IRS targeting of conservative groups, and the extent to which that influenced the election; the Department of Justice’s seizing of media phone records; last year’s attack on the U.S.mission in Benghazi, Libya and the death of our ambassador and three others, and the attempted coverup; and the government’s Fast and Furious scandal which resulted in the death of Brian Terry and hundreds of Mexican citizens. These are all, we are told, “phony.

The Republican’s “War on Women,” on the other hand, is real?



IRS Commissioner Shulman Visited the White House 157 Times, But Nobody Noticed. by The Elephant's Child

Former IRS Commissioner Douglas Shulman visited the White House at least 157 times during the Obama administration. That’s more visits than any member of the president’s cabinet. Shulman’s predecessor Mark Everson visited the White House once during four years of service in the George W. Bush administration. But Mr. Shulman testified in March that the IRS was not targeting conservative groups.

He was asked what some of the reasons might be that he was at the White House. He answered “Um, the Easter Egg Roll with my kids, our budget, helping the Department of Education streamline application processes for financial aid. “

Attorney General Eric Holder, the president’s friend and loyal lieutenant logged 62 visits. But they didn’t discuss targeting conservative organizations, no Tea Party groups, no targeting groups favoring Israel ( at least five groups have been audited by the IRS) but they didn’t talk about that either. Nobody knows just who he visited or why he was there, but it surely didn’t have anything to do with this seemingly vast array of conservative groups who were selected out for delay, audits, prying questions about their finances, members, friends of members, meetings, agendas, reading material, delay, names and addresses, and more delay. It’s just a puzzlement.



Targeting Political Enemies By Fair Means or Foul. by The Elephant's Child

Once a scandal emerges, more people feel free to talk, or want to proclaim themselves on the correct side of the controversy. The Internal Revenue Service (IRS) gets to handle all the financial information of citizens and businesses who pay taxes because they don’t give out information to anyone, whether government official, press, or private citizen. Apparently the IRS office that handles applications for tax-exempt status has felt free to release the applications and tax returns of citizens, organizations, and businesses that do not hew to the reigning party line freely.

The progressive-leaning investigative journalism group ProPublica says the Internal Revenue Service office that targeted and harassed conservative groups during the 2012 election cycle gave them nine confidential applications of conservative groups whose tax-exempt status was pending. The initial spin was that the perpetrators were low-level people in some back office in Cincinnati.  It seems that groups that seemed to be associated with the Tea Party, patriotism, the Constitution, the Declaration, were pro-Israel, expressed any opposition to the Federal Government, the National Debt, the Budget Deficit.

ProPublica, undoubtedly on the advice of attorneys, wants to get out ahead of the scandal and admit that they received, and made public information from applications or returns, assuming that they were newsworthy. Oddly, they did not target any groups with the word “progressive” or who received millions from the Sandler Foundation or George Soros” Open Society Foundations. ProPublica was initially given millions from the Sandler Foundation to “strengthen the progressive infrastructure” meaning very liberal. The group has won two Pulitzers for their investigative reporting — attacks on oil companies, the health care industry, opposition to fracking, and coal, of course:

Throw in a couple of investigations making the military look bad and another about prisoners at Guantanamo Bay and you have almost the perfect journalism fantasy— a huge budget, lots of major media partners and a liberal agenda unconstrained by advertising.

ProPublica is not the only Soros-funded organization stacked with members of the supposedly neutral press. There’s the Center for Public Integrity, which received $651,650 from the Open Society Institute in 2009 alone. The Center for Investigative Reporting (CIN) which received close to $1 million from Open Society from 2003-2008. They lean to stories on climate change, illegal immigration and the evils of corporations.

We are constantly told that journalists are neutral, and it isn’t true. They bemoan the influence of money in politics, yet make no mention of the influence of money in journalism. They need be more up front about their connections, their funding and who sits on their boards. There is a reason why they are losing money, losing subscribers and losing advertising.

And trust for the IRS is gone. Everybody lawyer up. Obama seems unconcerned. He does not take this seriously, any of this.  He has never felt, as far as I can tell, that the words he says particularly matter. What he says today doesn’t necessarily stand. He might say something different tomorrow. Whether it’s because he doesn’t think you will remember, or that he doesn’t think you’ll care, I don’t know. He got a full four Pinocchio’s from the Washington Post for his claim that he identified the Benghazi attack at the time as a terrorist attack.

All these scandals are inflating into vast bubbles, and the more you find out, the more questions there are.



First Shoe Dropped on Friday, The Other Next Week! by The Elephant's Child

The IRS in the infamous Friday Night News Dump admitted that it had targeted conservative organizations —specifically Tea Party groups, or any group that has words like “Patriot,” “Constitution,”or “Declaration of Independence” in their materials. The IRS also admitted that they improperly demanded donor lists from some of these organizations. This is playing politics with tax records, and an appalling violation of the bedrock principle of American democracy that the coercive powers of government are never to be used for partisan purposes.  But groups with “progressive” or “progress” in their names were not similarly targeted.

So why are they admitting this late on a Spring Friday just before Mothers’ Day when the public is supposedly out buying flowers for their moms? That’s what you do when you hope no one will notice. It seems that a report is due out this next week from the IRS Inspector General. By next week, maybe it will all be old news and no one will pay attention. The Agency even use the timeless passive phrase designed to absolve any actual humans. “Mistakes Were Made.”

It is disturbing that Treasury Secretary Jack Lew has not apologized to the American people and promised a full investigation. Nor had President Obama.  It was only low-level people in Cleveland who didn’t know any better.

The chairman of a House subcommittee is demanding more information from the IRS about its practice of searching the emails of  suspected tax fraudsters. Chairman Charles Boustany (R-LA) of the Ways and Means Committee according to an April article in The Hill, asked the IRS to provide information about whether it mines Facebook, Twitter or other social  media without a warrant, and what searches it has conducted since 2010. The ACLU released documents in which the agency claimed that it does not need a warrant to access emails, text messages and other electronic communications.

At Powerline, John Hinderaker notes that “this is not the first time the Obama administration has abused the IRS. In August 2010, Austin Goolsbee, who directed Obama’s Economic Recovery Advisory Board and later chaired his Council of Economic Advisers gave a press briefing in which he discussed corporate income taxes. In that briefing, he suggested that he had access to confidential IRS data, and falsely accused the administration’s beta noire, Koch Industries of not paying corporate  income taxes.”

The claim was false, but how would an administration official have access to records that show how much a corporation pays in taxes.? Such access would be illegal.

Last month it was reported that dozens of IRS employees claim to be unemployed in order to receive welfare, housing allowances and food stamps. Twenty-four current and former IRS employees have been charged with stealing government benefits. They were indicted on charges that they illegally received more than $250,000 in benefits.

It is going to be very interesting to find out what the IRS Inspector General has to say, in his report next week.

 



Tax Day, 2013 by The Elephant's Child
April 15, 2013, 9:41 pm
Filed under: Capitalism, Economy, Freedom, Taxes | Tags: , ,

Hmmmph. Have you ever finished your tax return, scanned the whole thing before putting it in the envelope and noticed OMG! I left off a major number. The one, of course that requires re-doing all the forms, because it makes all the numbers wrong.  That was my day.

I always put off mailing it in until the last minute, unwilling to allow the government more time than necessary to play with my return, so it’s probably only what I deserve.  I hope your day was better than mine.

There is really no use in the tax forms being so complicated. Give me a flat tax please, to send in on a postcard. And a much smaller government that doesn’t need so much support from beleaguered citizens.

 



Tax Time: You’ll Be Happy to Know the IRS Failed to Adequately Screen 77% of New Hires. by The Elephant's Child

Have you finished doing your taxes? Have you started? Your tax return undoubtedly will contain information that you expect will remain private, between the gigantic IRS and  you. Now the Treasury Inspector General for Tax Administration has challenged the IRS on their pre-screening and employment practices. They found that at four of nine branch offices, nearly 77% of new hires were not adequately screened  to meet standards of honesty, integrity and security. Oops!

In Fiscal Year 2010, taxpayers filed over 230 million tax returns that contained sensitive financial information. Because many IRS employees must have access to sensitive taxpayer information to administer the Nation’s tax system, the IRS must be particularly cognizant of hiring only those applicants who hold themselves to the highest standards of integrity. The IRS uses several controls to deter and detect the abuse of sensitive information. Pre-screening applicants and conducting background investigations on them are the initial steps in the process of ensuring that the IRS meets the highest standards of honesty, integrity, and security.

The IRS has implemented controls designed to ensure that applicants pursuing permanent or temporary employment with the IRS are suitable, and background investigation requests are properly initiated. However, our review at four of nine Employment Operations branch offices revealed that nearly 77% of the cases reviewed (507 of 662 cases) did not have sufficient documentation that would allow us to verify that the Employment Operations offices completed all of the required pre-screening steps before the employee reported for duty.

(ht: TaxProfBlog)



Taxing Matters! by The Elephant's Child

Nobody likes paying taxes.  Many, who have their taxes withheld at work, are more or less unaware of paying taxes and appreciative of the size of their refund, thinking of it as a sort of gift rather than an overpayment of the amount actually due.   Folks who are their own bosses suffer through paying quarterly taxes, and are very conscious of how much they pay.  “Withholding” was designed to make paying taxes less noticeable and therefore more pleasant.  It apparently works, for the taxes most resented in all cases are those taxes of which one is most aware.

Our relationship with the collectors of taxes is therefore complicated.  Some live in terror of the IRS, possibly because of the extra charitable donation they claimed.  But the collectors only collect.  Our argument should be with those who raise our taxes so casually.  That’s those folks in the House of Representatives whose ideas of “fairness” are so very, very strange.

Which brings us to the Chairman of the House Ways and Means Committee, Charles Rangel, who is in trouble with the Ethics committee for, among other things, not paying his taxes.

And we have the case of Timothy Geithner.  Timothy Geithner is Obama’s Treasury Secretary-designate.  He was most recently President of the New York Federal Reserve, and before that he was at the International Monetary Fund.

The IMF does not withhold state and federal income taxes or self-employment taxes — Social Security and Medicare — from its employees’ paychecks.  Because this might be confusing, the IMF goes to great lengths to explain to their employees just what their tax liabilities are.  Each employee receives a IMF Employee Tax Manual.  For the purpose of calculating their quarterly tax returns, each employee receives a quarterly wage statement.  Then, there are year-end wage statements.  Each employee is required to file for an Annual Tax Allowance Request.

Although employees are expected to pay their taxes out of their own money, they receive an allowance to cover those tax payments.  The employee fills out a form with their basic information — marital status, dependent children and so forth, and the IMF estimates the taxes due and gives the employee a corresponding allowance.   At the end of the form are the words, “I hereby certify that all the information contained herein is true to the best of my knowledge and belief and that I will pay the taxes for which I have received tax allowance payments from the Fund.”

Geithner signed the form.  He received all the paperwork and the allowance.  He just did not pay the social security and medicare taxes from 2001,2002,2003 and 2004.  In a 2006 audit the IRS discovered that he had not paid in 2003 and 2004.  He was assessed $17,230 including interest. which he paid.  The Obama transition team uncovered the fact that he had failed to pay in 2001  and 2003, at which point he dredged up another $25,970.  There was also an additional $4,334 plus interest for some other infractions.  Mr. Geithner did his own taxes.

The Obama administration said that it was “a common mistake.”

Charlie Rangel neglected to pay taxes on the rental income from some houses he owns in the Dominican Republic.

Does this matter?  Mr. Geithner is an important economist who, as Secretary of the Treasury, would be in charge of the IRS, as well as the complications of the economic recovery.  Mr. Rangel is the most influential person in Congress related to taxing and spending.

Is this a big deal?  Or just a common error like most people make at one time or another?    Ordinary hypocrisy?  Something embarrassing to be overlooked?  Cause for dismissal?  It does matter, doesn’t it?



The Surprising Story of Bar Stool Economics by The Elephant's Child
November 12, 2008, 9:00 pm
Filed under: Humor, Politics | Tags: , ,


By David R. Kamerschen, Ph.D., Professor of Economics

(This came to me in an email, so it has probably been floating around the internet.  It is so good I couldn’t resist posting it, for I’m sure some of you have never seen it.)

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.  If they paid their bill the way we pay our taxes, it would go something like this:

  • The first four men (the poorest) would pay nothing.
  • The fifth would pay $1.
  • The sixth would pay $3.
  • The seventh would pay $7.
  • The eighth would pay $12.
  • The ninth would pay $18.
  • The tenth man (the richest) would pay $59.

So, that’s what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. “Since you are all such good customers,” he said,” “I’m going to reduce the cost of your daily beer by $20.”  Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes, so the first four men were unaffected.  They would still drink for free.  But what about the other six men — the paying customers?  How could they divide the $20 windfall so that everyone would get his “fair share?”

They realized that $20 divided by six is $3.33.  But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

  • The fifth man, like the first four, now paid nothing. (100% savings)
  • The sixth man now paid $2 instead of $3. (33% savings)
  • The seventh now paid $5 instead of $7. (28% savings)
  • The eighth now paid $9 instead of $12. (25% savings)
  • The ninth now paid $14 instead of $18. (22% savings)
  • The tenth now paid $49 instead of $59. (16% savings)

Each of the six was better off than before.  And the first four continued to drink for free.  But once outside the restaurant the men began to compare their savings.

“I only got a dollar out of the $20,” declared the sixth man.  He pointed to the tenth man, “but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man.  “I only saved a dollar, too.  It’s unfair that he got ten times more than I!”

“That’s true!!” shouted the seventh man.  “Why should he get $10 back when I got only two?  The wealthy get all the breaks!”

“Wait a minute!” yelled the first four men in unison.  “We didn’t get anything at all.  The system exploits the poor!!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him.  But when it came time to pay the bill, they discovered something important.  They didn’t have enough money between all of them for even half of the bill.

And that, boys and girls, journalists and college professors, is how our tax system works.  The people who pay the highest taxes get the most benefit from a tax reduction.  Tax them too much, attack them for being wealthy, and they just may  not show up anymore.  In fact they might start drinking overseas where the atmosphere is somewhat friendlier.




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