Our Republican-led Congress has decided that the President’s “smoke and mirrors” tax scheme to reduce the wealthy’s estate taxes during his term will still be gradually “phased out.” This means that despite his determination to make the cuts permanent, they will suddenly re-appear in 2010 as originally planned, leaving the next administration to deal with the blame and outrage of taxpayers for "new" taxes.
To get around this, Bush defiantly ordered the IRS to make wholesale cuts in the IRS's 345 estate tax lawyers, literally getting rid of half of them, and to also eliminate 17 support personnel in the very department meant to monitor convoluted methods designed to undervalue assets of wealthy taxpayers. As a result of this “end run” around Congress 157 tax lawyer positions at the IRS will be swiftly eliminated within the next two months or so.
New York IRS estate tax lawyer Sharyn Phillips, is quoted as saying that the cuts at the IRS are a "backdoor way for the Bush administration to achieve what it cannot get from Congress, which is repeal of the estate tax."
In conflicting statements, the IRS stated that the savings would allow them to hire more auditors for tax returns of people making more than a million dollars a year, but also that Civil Service rules wouldn’t allow them to move the eliminated tax lawyers into auditor’s positions. This leaves the questions; why cut the positions in the first place only to refill them, and how would that save the taxpayers money?
The short answer is it wouldn’t… unless you make over a million dollars a year.
The eliminated estate tax lawyers are the most effective enforcement tools that the IRS has. Their efforts constitute approximately only 10 percent of the IRS’s audits, but they produce 80 percent of recovered tax revenues due to deception or fraud. They are said to bring in an astonishing $2,200 in avoided taxes per hour on average. The Office of Personnel Management would not respond when permission was asked twice by an IRS official to transfer the affected lawyers into auditing positions.
Spokespeople for both the IRS and the Treasury Department have reported to Congress that tax fraud amongst the wealthiest Americans has become an increasingly growing problem in the five years since President Bush took office.
