Thursday, May 13, 2021

Commissioner Rettig Tax Gap Comments Relevant to Federal Tax Crimes

 We could never learn to be brave and patient, if there were only joy in the world.

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Helen Keller

Author, lecturer, and disability rights advocate Helen Keller wrote these words in a letter to a friend in 1890. But the person to whom she’s really directing this insight is her younger self. In the letter, she reflects on becoming deaf and blind at 19 months old. She recalls feelings of deprivation and isolation, believing that “everybody [else] was always happy.” With perspective, however, she grew to appreciate the benefits that came with surviving hardships. In this quote, she highlights bravery and patience — two undeniably remarkable virtues — but leaves out the underlying reason for her bravery and patience in the first place: hope, her ability to find light where there was none; to see in the dark

UK company law and tax enforcement is so bad it’s almost as if the government wanted to encourage tax abuse

The Guardian ran an excellent article yesterday on the likely tax abuse inherent in the outsourced Covid track and trace contracts. As they recounted: Many
Read the full article…


David R. Agrawal (Kentucky) & Weihua Zhao (Louisville), Taxing Uber:

UberTransportation network companies (TNCs) such as Uber and Lyft create new challenges for local governments that provide public transit services, but they also create new opportunities to raise tax revenue. To shed light on the effect of taxing Uber, we construct a pseudo-monocentric city model to include multiple endogenously chosen transportation modes, including ride-hailing applications. In addition to trips to downtown, we also allow for idiosyncratic short trips for leisure purposes. We show that most tax and spending programs that cities have currently adopted only mildly increase transit usage. However, our model predicts significant increases in public transit ridership when TNCs are subsidized as a "last-mile" service



Chris Edwards (Cato Institute), Corporate Taxes: Rates Down, Revenues Up:

U.S. Treasury Secretary Janet Yellen recently complained about a “30-year race to the bottom on corporate tax rates,” and is pushing for a higher U.S. rate and a global minimum rate. Yellen wants to make sure that corporate taxes “raise sufficient revenue to invest in essential public goods and respond to crises.” Economist Gabriel Zucman approved of the proposed tax hike, saying corporations should “pay more in taxes, instead of them paying less and less."

Zucman’s claim about “less and less” is incorrect when looking across the major economies in recent decades. ... The chart below shows the average corporate tax rate and average corporate tax revenues as a percent of GDP for 22 countries. The average rate fell from 47 percent in 1980 to 25 percent in 2019. As a consequence, Yellen or Zucman might think that corporate tax revenues would have fallen. But corporate tax revenues are up substantially since the 1980s. Corporate tax revenues for the 22 countries rose from 2.2 percent in 1980 to 3.0 percent in 2019.

Alice Guerra (Bologna, Google Scholar) & Brooke Harrington (Dartmouth, Google Scholar), Regional Variation in Tax Compliance and the Role of Culture:

To address a debate in the literature concerning the impact of culture on tax compliance, we examine a case where extreme disparities in the two variables coincide, and test for a causal relationship. Our research design isolates the role of culture by focusing on regional differences within a single country: Italy. Southern Italy has long been a focus of research interest, not only for its extremely high rates of tax evasion, but for a host of other social and political ills, all usually attributed to regional culture.

EFIN scams, selecting reputable tax preparers, weather-related scams

By Robert E. Holtfreter, Ph.D., CFE

Learn how Financial Times journalist Dan McCrum investigated and exposed criminal actions at Wirecard

Multi-award-winning investigative journalist Dan McCrum overcame many roadblocks while investigating the Wirecard fraud scandal for the Financial Times. Watch him discuss how he brought this important story to light. View the video.



Commissioner Rettig Tax Gap Comments Relevant to Federal Tax Crimes

The IRS has a new web page titled “Impacting the Tax Gap” here.  The page is a summary of Commissioner Rettig’s comments which are set forth in a linked pdf here.  Commissioner Rettig’s comments are excellent.  Highly recommended.

I will cut and paste the comments I think most relevant to readers of this Federal Tax Crimes Blog (footnotes omitted; I stated the categories of the report but only include the text under the category relevant to criminal matters so some comments will not be included; I do not state the page numbers but searching the pdf can get the pages):

Research on high wealth noncompliance

            Several RAAS researchers recently participated in a study published by the National Bureau of Economic Research (NBER) entitled “Tax Evasion at the Top of the Income Distribution: Theory and Evidence.” This study examined tax evasion at the highest income levels and estimated that the top 1 percent of Americans hide more than 20 percent of their income from the IRS. With more, specialized, and targeted enforcement resources, the IRS could significantly reduce the income tax gap for the top 1% and collect another $175 billion of taxes annually. 

  1. “Philosophers often feel superior on the grounds that they provide arguments. It is surprising, then, that the poets are more likely to provide demonstrations” — AfB’s series of brief reflections by philosophers on art, music, poetry, films, and literature continues, with a recent entry from Errol Lord (U Penn)
  2. In July 2020, a dozen philosophers submitted an amicus brief in support of legal personhood status for an elephant at the Bronx Zoo — yesterday, the New York Court of Appeals agreed to hear the case (via Spencer Lo)
  3. “Constructor theory puts counterfactuals at the very foundation of physics, so that the most fundamental laws can be formulated in these terms” — Chiara Marletto (Oxford) is interviewed about an approach to physics based on possibility and impossibility
  4. Philosopher, artist, and now education activist — Adrian Piper, who moved to Berlin 16 years ago, is planning a demonstration calling for smaller school class sizes in Germany
  5. “Philosophy is about acquiring wisdom and developing the virtues… with proper instruction, boxing can be fertile ground for those two endeavors” — a profile of philosophy professor and boxing coach Gordon Marino (St. Olaf)
  6. Criticisms of Howard University’s decision to shut its classics department “overlook a deeper and more urgent problem” — Brandon Hogan & Jacoby Adeshei Carter, “philosophy professors at Howard who have reverence for the classics”
  7. “My diet is emphatically not the product of an effective-altruist calculus, but rather a strange blend of Kafka-like hunger artistry, neo-Stylitism, deep visceral horror at the very thought of factory farming…” — Justin E.H. Smith (Paris) on eating animals, converting convictions into an identity, and the aesthetics of moral life