Dark Brandon’s Policies IV

NationalTitles18

TideFans Legend
May 25, 2003
26,825
29,043
262
Mountainous Northern California
Serious question here:

Other than specifically requiring cash app reporting (I assume by 1099 forms but I haven't had much need to pay attention to the specifics), what is different now from prior to Biden's term beginning?





 

Tug Tide

All-American
Aug 27, 2006
3,454
4,464
187
Redneck Riviera, Panama City Beach, FL
Serious question here:

Other than specifically requiring cash app reporting (I assume by 1099 forms but I haven't had much need to pay attention to the specifics), what is different now from prior to Biden's term beginning?





Good questions.
 

Tug Tide

All-American
Aug 27, 2006
3,454
4,464
187
Redneck Riviera, Panama City Beach, FL

I copied your post here @Bamabuzzard. I don’t know the specifics, but I do know when I receive a reimbursement from my employer it’s on my paycheck as such. Seems to me 1099 cash app reporting would be income based only.
We shall see how it shakes out
 

Bamabuzzard

FB Moderator
Aug 15, 2004
27,803
7,517
237
46
Where ever there's BBQ, Bourbon & Football

I copied your post here @Bamabuzzard. I don’t know the specifics, but I do know when I receive a reimbursement from my employer it’s on my paycheck as such. Seems to me 1099 cash app reporting would be income based only.
We shall see how it shakes out
The problem with the current cash app reporting is anyone who receives $600 total for a year automatically gets issued a 1099 and corresponding one to the IRS. From my understanding, you get one regardless if the money received is for legitimate business purposes/income or just reimbursements over the year of you reimbursing someone for lunch, or picking up kids concessions while you were at another ball field etc. If the 1099 isn't business income, the taxpayer doesn't have to include it on their tax return. If it is, the taxpayer is supposed to include it on their tax return. The IRS applies whatever metrics they use to select taxpayers' for "testing" and begins testing.

I'm not a big fan of this method because it will, at some point increase the number of people who are audited, and going through an audit, even if you have "nothing to hide" is a MAJOR, MAJOR inconvenience and time-consuming exercise for the taxpayer. I don't care what the government says. If they said there were millions of dollars of untaxed income going through cash apps, you can bet your rear end they will audit it. It doesn't make sense not to.
 

TIDE-HSV

Senior Administrator
Staff member
Oct 13, 1999
80,560
30,942
437
Huntsville, AL,USA
The problem with the current cash app reporting is anyone who receives $600 total for a year automatically gets issued a 1099 and corresponding one to the IRS. From my understanding, you get one regardless if the money received is for legitimate business purposes/income or just reimbursements over the year of you reimbursing someone for lunch, or picking up kids concessions while you were at another ball field etc. If the 1099 isn't business income, the taxpayer doesn't have to include it on their tax return. If it is, the taxpayer is supposed to include it on their tax return. The IRS applies whatever metrics they use to select taxpayers' for "testing" and begins testing.

I'm not a big fan of this method because it will, at some point increase the number of people who are audited, and going through an audit, even if you have "nothing to hide" is a MAJOR, MAJOR inconvenience and time-consuming exercise for the taxpayer. I don't care what the government says. If they said there were millions of dollars of untaxed income going through cash apps, you can bet your rear end they will audit it. It doesn't make sense not to.
I think what will happen on the ground is they will look for patterns, just as they do now for deposits of nearly $10K. I'm trustee for four grandchildren and regularly make transfers by direct deposit. All but one are in college, so the transfers closely follow the academic year. I'm not worried. OTOH, if I were making a cash transfer of, say, $2K monthly to the same person, and that person is not reporting it, that's what they will be looking for. Personally, I think the $600 threshold is too low, given what inflation has done to that figure...
 

Tug Tide

All-American
Aug 27, 2006
3,454
4,464
187
Redneck Riviera, Panama City Beach, FL
  • Haha
Reactions: seebell

Bamabuzzard

FB Moderator
Aug 15, 2004
27,803
7,517
237
46
Where ever there's BBQ, Bourbon & Football
I think what will happen on the ground is they will look for patterns, just as they do now for deposits of nearly $10K. I'm trustee for four grandchildren and regularly make transfers by direct deposit. All but one are in college, so the transfers closely follow the academic year. I'm not worried. OTOH, if I were making a cash transfer of, say, $2K monthly to the same person, and that person is not reporting it, that's what they will be looking for. Personally, I think the $600 threshold is too low, given what inflation has done to that figure...
Yep, way too low.

It will be interesting to see the patterns and indicators they establish to determine who they flag and send a notice to.

The "types" of people they are targeting are individuals who own businesses like lawn and landscaping services, and those who teach private lessons for anything that range from musical instruments to sports. They're not targeting big fish because big fish don't use cash apps for their income.

But former minor league baseball player John, who doesn't want to work a commoner's job and realizes how huge the market is for youth sports, charges $60/half hour for hitting lessons, has the parents "venmo" him the money, and racks up over $100,000 per year of tax free income. Those are the types this law is targeting.
 
Last edited:

NationalTitles18

TideFans Legend
May 25, 2003
26,825
29,043
262
Mountainous Northern California


“We have two tax systems in this country,” he said, “and nothing illustrates that better than the IRS ignoring wealthy tax cheats while penalizing low-income workers over small mistakes.”

In a statement, IRS spokesman Dean Patterson acknowledged that the sharp decline in audits of the wealthy is due to the agency having lost so many skilled auditors. And he didn’t dispute that pursuing the poor is just easier.

Because EITC audits are largely conducted through the mail by lower-level employees from a central location, they are “less burdensome for taxpayers than in-person audits as they mail in their documentation and don’t have to take time out of the workday,” Patterson said.

“Correspondence audits are also the most efficient use of IRS’ limited examination resources.”



______

Fewer agents tends to mean more of the poor get audited, as a percent rate. Rich people have more complicated taxes and that requires more resources. Ironically to what republicans are saying more agents probably means more rich people getting audited. Those poor rich people.
 

Bamabuzzard

FB Moderator
Aug 15, 2004
27,803
7,517
237
46
Where ever there's BBQ, Bourbon & Football
Audits of the rich continue to plunge while those of the poor hold steady, and the two audit rates are converging. Last year, the top 1% of taxpayers by income were audited at a rate of 1.56%. EITC recipients, who typically have annual income under $20,000, were audited at 1.41%.
They heavily audit EITC recipients because:

1. It is easier and the intellect of the IRS agents is more along the lines of these types of returns.

2. It isn't uncommon for recipients (like my white trash aunt used to do) to have unreported cash income that puts them well over the income threshold of receiving the EITC benefit. My aunt had four children out of wedlock and refused to marry the guy while working as a hairdresser only reporting a fraction of her income while pocketing the rest in cash. From her own mouth, she was raking in right at six figures if you add the EITC, reported wages, and unreported wages w/tips. That's not what or who the EITC is for, yet there are millions who do some version of this.

Then on the other side of the spectrum, you've got the rich whose tax returns are so complicated (due to the tax law) that the overwhelming majority of the IRS agents can't comprehend them, so they avoid paying anywhere close to the taxes they should owe.

This is why a consumption tax at the register would be an enormous step in capturing the god knows how many billions in tax revenues that go uncollected each year.
 
Last edited:

TIDE-HSV

Senior Administrator
Staff member
Oct 13, 1999
80,560
30,942
437
Huntsville, AL,USA
They heavily audit EITC recipients because 1. It is easier and the intellect of the IRS agents are more along the lines of these types of returns. 2. It isn't uncommon for recipients (like my white trash aunt used to do) to have unreported cash income that puts them well over the income threshold of receiving the EITC benefit. My aunt had four children out of wedlock and refused to marry the guy while working as a hairdresser only reporting a fraction of her income while pocketing the rest in cash. From her own mouth, she was raking in right at six figures if you add the EITC, reported wages, and unreported wages w/tips. That's not what or who the EITC is for, yet there are millions who do some version of this.

Then on the other side of the spectrum, you've got the rich whose tax returns are so complicated (due to the tax law) that the overwhelming majority of the IRS agents can't comprehend them, so they avoid paying anywhere close to the taxes they should owe.

This is why a consumption tax at the register would be an enormous step in capturing the god knows how many billions in tax revenues that go uncollected each year.
That's what the value added tax, or VAT, is in Europe, except it's taxed along the way from production to consumption, any time value is added. The problem with it, just as with sales taxes, is that it's heavily regressive. Poor people end of paying a much larger percentage of their incomes than rich people, for obvious reasons...
 

Bamabuzzard

FB Moderator
Aug 15, 2004
27,803
7,517
237
46
Where ever there's BBQ, Bourbon & Football
That's what the value added tax, or VAT, is in Europe, except it's taxed along the way from production to consumption, any time value is added. The problem with it, just as with sales taxes, is that it's heavily regressive. Poor people end of paying a much larger percentage of their incomes than rich people, for obvious reasons...
Yeah, that seems to be overkill. IMO, the consumption tax shouldn't apply to everything, i.e. certain types of foods and drinks that are deemed necessities, along with other household goods that are nonfood items.
 
  • Like
Reactions: MobtownK

TIDE-HSV

Senior Administrator
Staff member
Oct 13, 1999
80,560
30,942
437
Huntsville, AL,USA
Yeah, that seems to be overkill. IMO, the consumption tax shouldn't apply to everything, i.e. certain types of foods and drinks that are deemed necessities, along with other household goods that are nonfood items.
It doesn't apply to what are deemed to be "essentials," like food, rent, transportation, medical services, etc. However, the EU minimum is 15%, with most countries falling between 19% and 25%...
 
  • Thank You
  • Like
Reactions: Bamabuzzard and UAH

New Posts

Latest threads

TideFans.shop - Bryce Young NIL Jersey


Your purchase through our TideFans.shop links helps support the site! Thanks!