The New York Times is running an article today entitled "Tech Company Settled Tax Case Without an Audit". The text basically shows how a secret agreement between the IRS and a minor semiconductor firm allowed said firm to avoid paying some $51 million in back taxes on shady stock option packages given to employees. Frustrated with the failure of the internal chain of command to address the illegal nature of the deal, Remy Welling, the auditor who was asked to approve it, took her case to the FBI, the Securities Exchange Commission (SEC), and the press. She will lose her job for her honesty.
This deal is made even more questionable by two additional facts: first, it was negotiated by a retired high ranking IRS official who now works for the company, and, second, the deal was made before an intended audit of the company was carried out, and the audit was stopped as a result. IRS policy dictates that, while such deals are allowed, they must be made after the audit is complete. This company's audit will never be carried out. At least two similar incidents have been exposed to the press in recent years.
This comes on the heels of a claim by Speaker of the House J. Dennis Hastert (R, Illinois) that his party would support the abolition of the IRS and its replacement with a federal sales tax (see here), in accordance with reccomendations by an organization known as Americans For Fair Taxation. This has met with skepticism from libertarians who have long supported the abolition of the IRS which is illegal and unnecessary (see esp. question 4 and question 11a) anyway.
If ever there was ever an opportune time to abolish the IRS and stop them from illegally extorting money from the American people, this is it. This is just one more area in which the American people find fault with how the Republicans and Democrats have been running this country. Perhaps Hastert will really carry out this plan, but, since Bush will not go on record on the issue, this is just one more reason to vote for Libertarian Michael Badnarik.Posted by Kenny at August 10, 2004 10:39 PM
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