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.@Carillionplc's indebtedness now put at *£5bn* — dwarfing the dodgy KPMG-audited group's £61m market cap and spelling even worse news for creditorshttps://t.co/bVAEcUR1k2— Ian Fraser (@Ian_Fraser) January 19, 2018
From the article (hat tip Richard Smith):
In addition to the £2.6bn Section 75 pension deficit, Carillion’s liabilities when it went bust included £1.3bn owed to its banking syndicate; £350m arising from early payment facilities with suppliers; cross-guarantees of £630m relating to bonding facilities; £170m of convertible bonds guaranteed by the company; and an unknown debt to Her Majesty’s Revenue and Customs, £16m of which was due by the end of the month.
This is a big deal. The amount of pension shortfall, reported a few days ago and presumably based on published financials, was just under £600 million. So this means accounting fraud, big time. Plus the clowns were paying dividends and hefty exec bounuses until July 2017.
User succumbs to a seizure in virtual reality while other players can only watch The Verge
Machines
are cheap. Humans are expensive. The IRS depends upon both to
administer the fiendishly complex tax code that Congress tirelessly
re-scrambles every year. This year is, of course, much, much worse. And
everyone seems at least aware that a government shutdown will hurt the
IRS’s ability to implement the new law. Here’s a recent WaPo article on the subject.
But the effect of a government shutdown on IRS operations is worse than is being reported. More below the fold.
As I explained in last Monday’s Lesson From The Tax Court,
the chronic shortage of funds has most obviously affected the human
side. The loss of human personnel has been devastating. The IRS
Oversight Board put it well in its FY2015 Report:
“This means a current IRS employee will see five coworkers leave, some
of them the most experienced and well trained, before one new employee
is eventually hired to cope with a growing workload.”
Ironically,
since the Oversight Board wrote that report, it is no longer functional
because of the current administration’s ineptitude at filling
appointments. Here’s what you find when you go to the Board’s home page:
The
IRS Oversight Board does not currently have enough members confirmed by
the U.S. Senate to make up a quorum and as a result has suspended
operations. The Board will reconvene once it has a quorum.
One
might think that if the IRS does not have the employees, it cannot do
the work of processing returns, assessing taxes and collecting unpaid
taxes. One would be wrong. The work will indeed continue, only with more
unchecked errors. Loss of personnel does not mean stoppage of work; it
means increased errors by the IRS because of unchecked automated
processing of taxpayer accounts.
As I have elsewhere described
in long, boring academic detail, the IRS has resolutely automated
various tax administration functions for most of the 20th century to the
point now that it is reasonable to say tax administration is run by
machines, not humans.
Shifting
work to computers is scary for many people, and rightly so. In fact,
when the IRS first started using computers to process returns in the
early 1960s, it created a public relations film to calm fears. The PSA
is called “Right on the Button.”
I have also previously explained
that what truly abuses taxpayers is unsupervised machine processing,
because that’s often where errors creep in and it takes human employees
to manually sort through the discrepancies. The short of it is that most
adverse actions taken against taxpayers result from automated
processing of taxpayer accounts: computers shoot first, and it is up to
the taxpayer to ask questions later. When the computers get it wrong,
adversely affected taxpayers must find a real, actual, live human to fix
the problem. But who ya gonna call when there is no one there? When the
already staggeringly understaffed IRS offices are completely emptied
because of a government shutdown, there is no-one to stop the machines.
And yet the computers keep on keeping on.
We
saw this back in 2013, when the government shut down from October 1 to
October 16. There were very, very few IRS employees working. Yet the
machines kept whirring away. The National Taxpayer Advocate reported
that during the shutdown – even with only a few employees – computers
took a total of 301,807 adverse actions against taxpayers, including
grabbing bank accounts, wages, Social Security benefits, filing Notices
of Tax Liens, setting up deficiency assessments and more.
All
of those actions were computer-generated. No human gave input or
oversight. Let’s assume the computers got it 99% right. That still means
more than 3,000 of the actions were in error, errors that could have
devastating effects on taxpayers. Yet there were no humans to fix the
mistakes.
The 2013 shutdown was 15 days. If this happens again, how long will this one be?
This
is not a rational way to run the county. But I suppose it is futile to
expect collective rationality from the men and women whose bickering
voices fill the halls of the current Congress. They have enough problems
dealing with the personification of Mayhem in the White House. Hey Allstate! Ya got a policy for that?