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Tuesday, August 25, 2009

More Health Care Tax Mischief

More tax mischief surfaces, once again, when the pending House health care bill is squeezed. This analysis by a tax lawyer at the law firm of Cleary Gottlieb shows that when various cross-referenced provisions are read together, the House bill limits the discretion of the IRS to waive penalties for honest taxpayer mistakes:

One [provision] would change the law to mandate that the Internal Revenue Service slap penalties on honest but errant taxpayers.

Under current law, taxpayers who lose an argument with the IRS can generally avoid penalties by showing they tried in good faith to comply with the tax law. In a broad range of circumstances, the health-care bill would change the law to impose strict liability penalties for income-tax underpayments, meaning that taxpayers will no longer have the luxury of making an honest mistake. The ability of even the IRS to waive penalties in sympathetic cases would be sharply curtailed.

The proposed changes in penalty rules have largely escaped notice because they are buried in a part of the bill that purports to deal with abusive tax shelters. They are barely mentioned in the Ways and Means Committee summary. Their inclusion in the bill underscores the need to read it closely. If anyone had doubts about the value of loading the text of the bill into a wheelbarrow and bringing it to the beach this August, the proposed changes to tax penalties should dispel them.

Sorry, but we should not have to load any piece of legislation into a wheelbarrow and take it to the beach, just to figure out what is in there. And to think that the President wanted this passed prior to the August recess.

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Related Posts:
Leave Our Vending Machines Alone
Throw Out The Democratic Health Care Sponge
IRS The New Health Care Enforcer
Taxing Your Mere Existence
Health Care Tax Insanity Chronicles, Part 3 (IRS To Decide Amount ofTaxation)

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1 comment:

  1. It should be considered a lie when a government presents an explanation for legislation that leaves out important details. Of course, there is not yet an explanation for the healthcare legislation.

    The government demands detailed, researched Environmental Impact Statements before starting a building. We should have Official Policy Impact Statements before our representatives change our society.

    We need proposed results, expected evolution, methods, justifications, comparative studies, past successes of similar policy, funding sources, expected difficulties, the works.

    I hope people of all parties and positions could agree that this is fundamental. It is non-partisan to demand that the President and all politicians show how they have carefully researched their proposals.

    It is not our job to read tea leaves and pick apart 1000 page bills written in Old English to figure out what the bills are really saying. The bills are not enough. They are implementation, not coherent policy. We have been directed to look only at the bills as a tactic to make the press and public scratch for the underlying ideas.

    Did Obama (or any politician) start with such a policy study, or not?
    If so, then where is it? If not, then he is a fool. And we are fools if we accept legislation without explanation.

    Is Obama legislating from some scribbles on a cocktail napkin?
    Does he want to pass just anything, then rearrange it later to do what he wants?

    Where is the policy paper?
    If they won't answer:
    OK, so where is the cocktail napkin?

    No Legislation Without Explanation

    A Few Words About Policy
    http://easyopinionsoutlink.blogspot.com/2009/07/few-words-about-policy.html

    ReplyDelete