The IRS has shown that it has a hard time finding emails and a hard time explaining its recycling of hard drives. Then there are the guns. The elite unit of the IRS that gets to carry guns doesn’t exactly have a perfect safety record.
According to a government audit, IRS Agents ‘Accidentally’ Discharged Guns 11 Times between 2009 and 2011. Some of those weapons discharges resulted in property damage or personal injury, claimed the report. In fact, agents accidentally fired their guns more times than they did intentionally, said the Treasury Inspector General for Tax Administration. The IRS’s Criminal Investigation Division is armed, but armed or not, the IRS wields enormous power.
In United States v. Adams, Charles Adams’ conviction for conspiracy and tax evasion were upheld despite his claims that the IRS agents carried guns not allowed by law. Mr. Adams said guns were legal only when the government is enforcing alcohol, tobacco and firearms laws. But this was just a tax search, he argued.
Turns out that the IRS does searches the old fashioned way. Indeed, the IRS doesn’t fly around staging tax raids in helicopters, in sharp contrast to the federal tax collector in Brazil. There, groups of armed tax agents of Brazil’s Federal Revenue Service fly around by helicopter. They look for suspects, value property, and stop to pound on doors.
In short, Brazil’s taxman is tough and creative. And you have to love the agency’s nickname: the tax lion. In its ferocious pursuit of tax dodgers, Brazil’s taxman include gun-toting operatives and armed operations with names like “Black Panther” and “Delta.” Like army special forces, they even use helicopters in tax audit and collection efforts.
And they don’t seem to play favorites either. They ignore social status and political connections. Brazil has chased Luis Fabiano, a soccer star for Sao Paulo. Even Brazil’s President Dilma Rousseff came under scrutiny in 2009. Corruption cases seem rare.
That has caused tax officials from abroad to study Brazil’s helicopter-enabled example. So far, the IRS doesn’t seem to be one of the admiring tax agencies. Still, tax evasion is Brazil is pegged at only about 16% of income. That’s a far cry from the 40% and 50% figures in many countries.
To Americans, a 16% tax evasion rate may sound high. In South America, though, that figure sounds pretty low! In Brazil, more than 25 million people declare and pay income taxes. And technology and manpower play large roles.
Brazil’s taxman monitors the books of companies year-round. With 12,000 agents across Brazil, they monitor tax receipts and hunt for smugglers. And it isn’t just helicopter raids either. As a check on temptation, cashiers at supermarkets and stores in Brazil’s big cities constantly ask customers for their personal tax identification number.
Think of it like Brazil’s Social Security Card. The carrot for turning it over is a tax refund to the customer. But the real idea is to get the taxpayer’s data so it is in Brazil’s tax system from then on. After all, it’s not easy to pay taxes in Brazil. It takes many times longer to prepare company taxes in Brazil than elsewhere in Latin America. Brazil ranks 150th out of 183 countries in terms of ease of paying taxes.
Let’s see, how would you like the IRS to start hovering over your home or place of business with a cadre of gun-toting IRS Agents? A correspondence audit doesn’t sound quite so bad anymore.
You can reach me at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
via The Tax Lawyer http://ift.tt/1rWay1i