tag:theconversation.com,2011:/nz/topics/irs-24765/articlesIRS – The Conversation2023-09-27T12:28:13Ztag:theconversation.com,2011:article/2140402023-09-27T12:28:13Z2023-09-27T12:28:13ZWhat will this government shutdown shut down? Social Security and Medicaid keep going; SBA loans and some food and safety inspections do not<figure><img src="https://images.theconversation.com/files/550335/original/file-20230926-25-7ftzlh.jpeg?ixlib=rb-1.1.0&rect=13%2C6%2C4587%2C3014&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A shutdown's effects will be broad and deep.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/government-shutdown-in-washington-interstate-road-royalty-free-image/1095019568?phrase=government+shutdown+congress&adppopup=true">gguy44/ iStock / Getty Images Plus</a></span></figcaption></figure><p>The U.S. is moving toward a government shutdown. House and Senate appropriators are divided on <a href="https://apnews.com/article/politics-us-republican-party-thomas-emmer-united-states-house-of-representatives-hockey-744b602f30285f3398da09d1489f37dd">spending levels</a>, <a href="https://www.politico.com/news/2023/09/13/defense-bill-house-republicans-00115530">policy riders</a> and additional items, such as support for Ukraine.</p>
<p>As a political scientist who studies the <a href="https://gai.georgetown.edu/wp-content/uploads/2022/08/Under-the-Iron-Dome-2022-Blessing-book-chapter-on-eroding-budget-process.pdf">evolving budget process</a>, as well as <a href="https://gai.georgetown.edu/wp-content/uploads/2022/08/Blessing-HBC-testimony-debt-ceiling-2-16-22.pdf">brinkmanship</a> in Congress, it is clear to me that this episode prompts many important questions for how the U.S. is governed. </p>
<p>There’s the larger, long-term question: What are the costs of congressional dysfunction? </p>
<p>But the more immediate concern for people of the country is how a shutdown will affect them. Whether delayed business loans, slower mortgage applications, curtailed food assistance or postponed food inspections, the effects could be substantial. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/550339/original/file-20230926-15-he7bob.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="An airplane landing near an air traffic control tower." src="https://images.theconversation.com/files/550339/original/file-20230926-15-he7bob.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/550339/original/file-20230926-15-he7bob.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=414&fit=crop&dpr=1 600w, https://images.theconversation.com/files/550339/original/file-20230926-15-he7bob.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=414&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/550339/original/file-20230926-15-he7bob.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=414&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/550339/original/file-20230926-15-he7bob.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=520&fit=crop&dpr=1 754w, https://images.theconversation.com/files/550339/original/file-20230926-15-he7bob.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=520&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/550339/original/file-20230926-15-he7bob.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=520&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Air traffic controller training will be halted in a government shutdown.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/the-air-traffic-control-tower-is-seen-at-the-miami-news-photo/1700958797?adppopup=true">Joe Raedle/Getty Images</a></span>
</figcaption>
</figure>
<h2>Affected: Farm loans to Head Start grants</h2>
<p>The total federal budget is almost US$6 trillion. <a href="https://www.cbo.gov/publication/58890">A little over one-fourth</a> is discretionary spending that is funded by the annual appropriations process and thus debated in Congress. This portion of spending provides money for virtually every federal agency, roughly half of which goes to defense. The rest of yearly federal spending is on mandatory entitlement programs, mainly Social Security and Medicare, as well as interest on the national debt. </p>
<p>The Office of Management and Budget, which oversees both development of federal budget plans by federal agencies <a href="https://www.whitehouse.gov/omb/">and their performance</a>, regularly requires agencies to <a href="https://www.whitehouse.gov/omb/information-for-agencies/agency-contingency-plans/">develop shutdown plans</a>. Because agencies continually update these plans, no two shutdowns are exactly alike. A week before the expected shutdown, 40% of the plans posted had been updated since July 2023, and 80% had been updated since 2021; late-breaking updates can be consequential for policy.</p>
<p>Details depend on the agency, program and duration of the shutdown, as well as laws passed with funding since the previous shutdown, and the administration’s priorities. These plans identify a <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2023/09/20/extreme-house-republicans-chaos-is-marching-us-toward-a-government-shutdown/">variety of ways</a> the shutdown will affect Americans. </p>
<p>If a shutdown happens this year, new loan approvals from the Small Business Administration <a href="https://www.sba.gov/document/report-sba-plan-operating-event-lapse-appropriations">will stop</a>. The Federal Housing Administration will experience <a href="https://www.hud.gov/sites/dfiles/Main/documents/ShutdownFAQs.pdf">delays</a> in processing home mortgage loans and approvals. The Department of Agriculture will not offer new <a href="https://www.usda.gov/sites/default/files/documents/usda-2021-contingency-plan.pdf">farm loans</a>. Head Start grants will not be awarded, initially affecting 10,000 young children from low-income families who are in the program. </p>
<p>Some food inspections by the Food and Drug Administration, workplace safety inspections by the Occupational Safety and Health Administration, and environmental safety inspections by the Environmental Protection Agency could be delayed, as they have been when the government stopped functioning in the past. </p>
<p>During the <a href="https://www.npr.org/2019/01/14/685369719/government-shutdown-leads-to-a-spike-in-cancelled-immigration-hearings">last shutdown</a>, about 60,000 immigration hearings, organized by the Department of Justice and not the courts, <a href="https://crsreports.congress.gov/product/pdf/R/R47077">were canceled and</a> had to be rescheduled. <a href="https://www.aila.org/advo-media/aila-practice-pointers-and-alerts/government-shuts-down">This year</a> would also see cases involving noncitizens who are not being held by the government reset for a later date, even as other immigration services proceed. </p>
<p>Infrastructure projects awaiting approval from the Environmental Protection Agency could be stalled. The National Institute of Health’s clinical trials for diseases could also be slowed.</p>
<p>This is not a comprehensive list. Agency plans show what happens when federal workers are furloughed – that is, those who cannot report to work in a shutdown. Furloughs will apply to <a href="https://www.govexec.com/workforce/2023/09/see-who-would-get-furloughed-shutdown-year/390517/">over 700,000</a> out of <a href="https://missouriindependent.com/2023/09/20/a-disaster-nears-millions-of-federal-workers-paychecks-would-be-on-hold-in-a-shutdown/">roughly 3.5 million</a> federal employees, but even more workers will be “excepted” and required to work without pay until the shutdown ends. </p>
<p>That of course means employee hardship. But like <a href="https://www.businessinsider.com/government-shutdown-jetblue-ceo-says-air-travel-near-tipping-point-2019-1">past shutdowns</a>, unpaid workers can fail to report to work in larger numbers. Americans relying on those services will face delays. There may be air travel delays as well, as air traffic controllers and Transportation Security Administration agents <a href="https://www.barrons.com/articles/government-shutdown-affect-air-travel-flights-aad0970">go without pay</a>.</p>
<h2>Not affected: The postal service and entitlement programs</h2>
<p><a href="https://crsreports.congress.gov/product/pdf/R/R44763/3#:%7E:text=Mandatory%20spending%20is%20composed%20of,the%20bulk%20of%20mandatory%20spending.">Social Security, Medicare and Medicaid benefits</a> are entitlement programs that are not included in the annual appropriations process. Americans relying on these programs will not see those benefits affected. But these programs require administration. Federal employees would not be available to verify benefits or send out new cards.</p>
<p>There are additional funding sources for government activities, beyond entitlement programs, that aren’t included in the annual appropriations bills and thus are unlikely to be affected by a shutdown. </p>
<p>The U.S. Postal Service, independently funded through its own services, will be unaffected by a shutdown. The federal judiciary could <a href="https://sgp.fas.org/crs/misc/RL34680.pdf">operate for a limited time</a>, funded by court filings, fees and appropriations allocated off the yearly cycle. But this funding <a href="https://www.reuters.com/legal/government/us-judiciary-can-keep-operating-2-weeks-if-government-shuts-down-2023-09-19/">won’t last long</a> – 10 days was an estimate for the 2013 shutdown. The Supreme Court, which has functioned in previous shutdowns, <a href="https://www.reuters.com/world/us/us-government-shutdown-what-closes-what-stays-open-2023-09-21/">is expected to continue its typical schedule</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/550349/original/file-20230926-23-gcwhwp.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A sign reading 'Because of the Federal Government SHUTDOWN All National Parks are Closed' is posted on a barricade in front of the Lincoln Memorial." src="https://images.theconversation.com/files/550349/original/file-20230926-23-gcwhwp.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/550349/original/file-20230926-23-gcwhwp.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/550349/original/file-20230926-23-gcwhwp.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/550349/original/file-20230926-23-gcwhwp.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/550349/original/file-20230926-23-gcwhwp.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=500&fit=crop&dpr=1 754w, https://images.theconversation.com/files/550349/original/file-20230926-23-gcwhwp.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=500&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/550349/original/file-20230926-23-gcwhwp.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=500&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">National parks will be closed in a shutdown, as the Lincoln Memorial in Washington was in the 2013 shutdown.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/GovernmentShutdownFederalWorkers/db15aad4b2e8423f8579363642314974/photo?Query=government%20shutdown&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=7332&currentItemNo=5">AP Photo/Carolyn Kaster</a></span>
</figcaption>
</figure>
<p>The IRS had <a href="https://federalnewsnetwork.com/government-shutdown/2023/09/irs-to-remain-fully-operational-if-congress-triggers-government-shutdown/">promised</a> that the additional funds from the Inflation Reduction Act meant it could be fully operational in a shutdown. In a sign of how agency plans can get updated at the last minute, the <a href="https://home.treasury.gov/system/files/266/IRS-FY24LapsePlan.pdf">IRS updated its contingency plan</a> on Sept. 28 following a ruling by the OMB, a change that will result in <a href="https://www.washingtonpost.com/politics/2023/09/28/irs-shutdown-furlough-inflation-act/">60,000 furloughed IRS workers</a>. While some activities of the agency will continue, <a href="https://www.washingtonpost.com/politics/2023/09/28/irs-shutdown-furlough-inflation-act/">customer service activities</a> to individual taxpayers will halt. </p>
<p>A <a href="https://www.whitehouse.gov/wp-content/uploads/2023/03/aaa_fy2024.pdf">variety of advance appropriations</a> also exist that provide funding for various programs one year or more beyond the year the appropriations bill was passed, including Veterans Affairs medical care; most VA benefits are unaffected. </p>
<p>The primary <a href="https://federalnewsnetwork.com/government-shutdown/2019/01/government-shutdowns-once-incomprehensible-inconceivable-unthinkable-now-the-norm/">law</a> governing funding gaps also makes exceptions for “emergencies involving the safety of human life or the protection of property,” which includes a variety of military activities.</p>
<h2>The big question mark</h2>
<p>The major unknown is, of course, how long a shutdown might last. Food assistance programs – including the federal food program for poorer women, infants and children, called WIC, and the Supplemental Nutrition Assistance Program, or SNAP – which have some contingency funds that carry over into the next fiscal year but are running low, run the risk of those accounts running out. </p>
<p>The federal judiciary has limited funds. There are also a variety of <a href="https://crsreports.congress.gov/product/pdf/IN/IN11554">federal grants to states and localities</a> that could be short on funds, such as disaster relief and economic development programs, in addition to nutrition assistance. Government officials at the federal, state and local levels will have to make choices about whether a federal shortfall should be covered by state funds, or if workers should be furloughed. Some of these funds have been protected by increased funding in recent laws: The <a href="https://www.everycrsreport.com/reports/R47573.html">Highway Trust Fund is solvent through 2027</a>, due to the Bipartisan Infrastructure Law of 2021.</p>
<p>The economy as a whole will suffer more the longer a shutdown continues. The <a href="https://www.cbo.gov/publication/54937">Congressional Budget Office estimated</a> that the last shutdown, in 2018-2019, reduced gross domestic product growth by 0.2% in the first quarter of 2019. While that 35-day partial shutdown was the longest in U.S. history, it did not affect all agencies.</p>
<p>Federal employees and contractors are disproportionately hurt. Federal employees who are furloughed or excepted and do not receive pay during the shutdown will receive it retroactively, according to a <a href="https://www.congress.gov/bill/116th-congress/senate-bill/24/text">2019 law</a> passed as a response to the last shutdown. </p>
<p>No such policy exists for contractors working for the federal government, including services ranging from janitorial to manufacturing. Beyond affecting individual workers, the private sector loses business and adjusts its hiring decisions and other practices. </p>
<p><strong><em>This story has been updated to reflect revised shutdown plans for the IRS.</em></strong></p><img src="https://counter.theconversation.com/content/214040/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Laura Blessing does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>You won’t be able to ignore a government shutdown. From delayed business loans to slower mortgage applications and postponed food inspections, the effects could be substantial.Laura Blessing, Senior Fellow, Government Affairs Institute at Georgetown University, Georgetown UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2068402023-06-20T13:40:12Z2023-06-20T13:40:12ZHow to protect yourself from drop account fraud – tips from our investigative unit<figure><img src="https://images.theconversation.com/files/532280/original/file-20230615-15-z17k8.png?ixlib=rb-1.1.0&rect=11%2C187%2C2546%2C1388&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Loot stolen from the U.S. Postal Service is displayed on the dark web.</span> <span class="attribution"><span class="source">Via Evidence-Based Cybersecurity Research Group</span></span></figcaption></figure><h2>The types of crimes that use drop accounts are multiplying rapidly, but there are ways to decrease your chances of becoming a victim.</h2>
<ul>
<li>Do not mail checks from anywhere but your local post office. Not even your own mailbox is safe. <a href="https://theconversation.com/how-cybercriminals-turn-paper-checks-stolen-from-mailboxes-into-bitcoin-173796">The best option? Pay bills and send money online</a>.</li>
</ul>
<h2>Protect your identity online by following these steps</h2>
<ul>
<li>Guard your Social Security number. Never use it on medical forms - if asked, write “available upon request” - for a job interview, when applying for a grocery store reward card or when booking travel. If you believe the number has been compromised, <a href="https://faq.ssa.gov/en-us/Topic/article/KA-02220">contact the Social Security Administration to get a new one</a>.</li>
<li>Use only one credit card for online shopping, and never use a debit card.</li>
<li><a href="https://theconversation.com/choose-better-passwords-with-the-help-of-science-82361">Strengthen your online and mobile phone passwords</a>.</li>
<li>If you don’t expect to apply for a credit card or loan soon, <a href="https://www.consumerfinance.gov/ask-cfpb/what-does-it-mean-to-put-a-security-freeze-on-my-credit-report-en-1341/">freeze your credit with all three credit rating agencies</a>.</li>
<li><a href="https://theconversation.com/your-credit-report-is-a-key-part-of-your-privacy-heres-how-to-find-and-check-it-116999">Check your credit reports</a>.</li>
<li>Do not respond to preapproved credit card or loan offers delivered by mail, and, to reduce offers, consider <a href="https://www.optoutprescreen.com/">opting out of receiving these mailings</a>.</li>
<li>Shred your financial information; don’t simply throw it out.</li>
<li>Never give out personal information to anyone contacting you through unsolicited phone calls or emails. </li>
</ul>
<h2>To prevent fraud involving a tax return refund or any other tax issue</h2>
<ul>
<li>Complete and send in your tax return as early as possible, which makes it more difficult for someone to steal your refund. </li>
<li><a href="https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin">Establish an identity protection PIN with the IRS</a>, which only you and the agency will know. </li>
<li>If the IRS rejects your attempt to file your tax return, or if you receive any unusual mail from the agency such as a tax transcript you didn’t request, or it notifies you of suspicious activity, contact the agency at the number <a href="https://www.irs.gov/individuals/understanding-your-cp01c-notice">listed here</a> to report possible identity theft. </li>
<li>Pay any <a href="https://www.irs.gov/payments">taxes owed online</a>, not by check.</li>
</ul>
<h2>To prevent losses through business email compromise scams</h2>
<ul>
<li>Learn and teach employees basic email safety techniques. </li>
<li>Confirm urgent emails from supervisors or vendors demanding immediate wire transfers. In fact, urgent requests are the most suspicious.</li>
<li>Assure employees that double-checking whether these purportedly urgent emails came from the listed sender will not result in criticism or punishment. </li>
<li>Never purchase a gift card requested by a supervisor through email or text.</li>
<li>Human resources officials should never change bank accounts for direct deposit if employees ask by email or text. Always call to double-check that the request is real.</li>
</ul>
<hr>
<p></p><div style="float:right;width:205px;">
<a href="https://theconversation.com/us/investigations/mailbox-robberies-drop-accounts-checkwashing-fraud-gangs-of-fullz"><img alt="Graphic showing a masked criminal on a stamp and saying 'Heists worth billions'" class="ls-is-cached lazyloaded" data-src="https://images.theconversation.com/files/532510/original/file-20230618-28-hh0pox.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=200&fit=clip" src="https://images.theconversation.com/files/532510/original/file-20230618-28-hh0pox.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=200&fit=clip"></a></div>
<em>This article accompanies <strong><a href="https://theconversation.com/us/investigations/mailbox-robberies-drop-accounts-checkwashing-fraud-gangs-of-fullz">Heists Worth Billions</a></strong>, an investigation from The Conversation that found criminal gangs using sham bank accounts and secret online marketplaces to steal from almost anyone – and uncovered just how little being done to combat the fraud.</em><p></p>
<ul>
<li><p><strong><a href="https://theconversation.com/behind-the-scenes-of-the-investigation-heists-worth-billions-207158">Behind the scenes of the investigation</a></strong></p></li>
<li><p><strong><a href="https://theconversation.com/announcing-the-conversations-new-investigative-unit-were-looking-for-collaborators-in-academia-207394">Announcing The Conversation’s new investigative unit</a></strong></p></li>
</ul><img src="https://counter.theconversation.com/content/206840/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kurt Eichenwald does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Cyber bank fraud is on the rise. Here are some important ways to protect yourself.Kurt Eichenwald, Senior Investigative Editor, The ConversationLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2061742023-05-28T17:15:23Z2023-05-28T17:15:23ZDebt ceiling negotiators reach a deal: 5 essential reads about the tentative accord, brinkmanship and the danger of default<figure><img src="https://images.theconversation.com/files/528698/original/file-20230528-145930-1dir73.jpeg?ixlib=rb-1.1.0&rect=49%2C437%2C7766%2C4957&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Biden speaks to reporters about the tentative accord. </span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/DebtLimit/5f4e2743ebcf4b4795d386cd54ea90d4/photo?Query=debt%20ceiling&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=1041&currentItemNo=0">AP Photo/Susan Walsh</a></span></figcaption></figure><p>President Joe Biden and House Speaker Kevin McCarthy on May 27, 2023, <a href="https://www.bloomberg.com/news/articles/2023-05-28/white-house-republicans-reach-deal-to-avert-historic-us-default">agreed in principle to a tentative deal</a> that would raise the debt ceiling while capping some federal spending at current levels.</p>
<p>The accord, if approved by both houses of Congress, would avert an unprecedented default that threatens to derail the economy and put hundreds of thousands of Americans out of work. Negotiators agreed to lift the ceiling for two years – past the 2024 presidential election – while putting a temporary cap on most nondefense spending at 2023 levels. It would also reduce planned funding for the IRS, impose new work requirements on some people who receive benefits from the federal program known as SNAP and claw back billions of unspent funds from pandemic relief programs.</p>
<p>The Conversation has been covering the debt ceiling drama since January, when Republicans took over the House, raising fears that brinkmanship would lead to an economic catastrophe. Here are five articles from our archive to help you make sense of a couple key aspects of the tentative deal and provide context on the debt ceiling fight.</p>
<h2>1. What is the debt ceiling?</h2>
<p>First some basics. The debt ceiling was established by the U.S. Congress in 1917. It limits the total national debt by setting out a maximum amount that the government can borrow.</p>
<p>Steven Pressman, an <a href="https://ww4.newschool.edu/nssr/faculty/steven-pressman/">economist at The New School</a>, explained the original aim was “to let then-President Woodrow Wilson spend the money he deemed necessary to fight World War I without waiting for often-absent lawmakers to act. Congress, however, did not want to write the president a blank check, so it limited borrowing to US$11.5 billion and required legislation for any increase.”</p>
<p>Since then, the debt ceiling has <a href="https://theconversation.com/why-america-has-a-debt-ceiling-5-questions-answered-164977">been increased dozens of times</a>. It currently stands at $31.4 trillion – a figure reached in January. The Treasury has taken “extraordinary measures” to enable the government to keep borrowing without breaching the ceiling. Such measures, however, can only be temporary – meaning at one point Congress will have to act to lift the ceiling or default on its debt obligations, which is expected to happen by June 5, <a href="https://www.reuters.com/markets/us/yellen-moves-forecast-earliest-potential-us-default-date-june-5-2023-05-26/">according to Treasury Secretary Janet Yellen</a>, if the deal isn’t approved in time.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-america-has-a-debt-ceiling-5-questions-answered-164977">Why America has a debt ceiling: 5 questions answered</a>
</strong>
</em>
</p>
<hr>
<h2>2. The trouble with work requirements</h2>
<p>One of the biggest sticking points toward the end of negotiations was work requirements for recipients of government aid. The tentative deal would raise the age for existing work requirements from 49 to 54 years on able-bodied adults who have no children. This is less than what Republicans had earlier sought. There are exceptions for veterans and the homeless. </p>
<p>But if the goal is to help people find jobs and make more money, work requirements <a href="https://theconversation.com/snap-work-requirements-dont-actually-get-more-people-working-but-they-do-drastically-limit-the-availability-of-food-aid-204257">don’t actually do the job</a>, wrote <a href="https://scholar.google.com/citations?user=Zoc5_aMAAAAJ&hl=en&oi=ao">Kelsey Pukelis</a>, a doctoral student in public policy at Harvard Kennedy School who has studied the issue. Rather, they make it much harder for people who need food aid to get it. </p>
<p>“Our findings do suggest that work requirements restrain federal spending by reducing the number of people getting SNAP benefits,” she explained. “But our work also indicates that in today’s context, these savings would be at the expense of already vulnerable people facing additional economic hardship at a time when a new recession could be around the corner.”</p>
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Read more:
<a href="https://theconversation.com/snap-work-requirements-dont-actually-get-more-people-working-but-they-do-drastically-limit-the-availability-of-food-aid-204257">SNAP work requirements don’t actually get more people working – but they do drastically limit the availability of food aid</a>
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<h2>3. IRS funding takes a hit</h2>
<p>The deal also takes aim at a big boost in spending Congress gave the Internal Revenue Service beginning in 2022 to crack down on tax cheats and upgrade its software. Democrats agreed to a Republican demand to cut the extra IRS funding from $80 billion to $70 billion. </p>
<p>Back in August 2022, <a href="https://scholar.google.com/citations?user=J_S5pkkAAAAJ&hl=en&oi=ao">Nirupama Rao</a>, an economist at the University of Michigan, <a href="https://theconversation.com/will-the-inflation-reduction-act-actually-reduce-inflation-how-will-the-corporate-minimum-tax-work-an-economist-has-answers-188786">explained why Democrats included all that funding</a> in their Inflation Reduction Act and how it would help the IRS collect more tax revenue, since the agency does not fully collect all the taxes that are owed.</p>
<p>“The main target of this spending is the so-called tax gap, which is currently estimated at about $600 billion a year,” she wrote. “While an $80 billion investment that returns $204 billion already sounds pretty impressive, it may be possible that it’s a conservative estimate.”</p>
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Read more:
<a href="https://theconversation.com/will-the-inflation-reduction-act-actually-reduce-inflation-how-will-the-corporate-minimum-tax-work-an-economist-has-answers-188786">Will the Inflation Reduction Act actually reduce inflation? How will the corporate minimum tax work? An economist has answers</a>
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<h2>4. The hard road to compromise</h2>
<p>It took a long time for Republicans and Democrats to get the current agreement. </p>
<p>Yellen warned in January that the government was about to hit the debt limit and would be unable to pay all its bills by May or June. McCarthy and House Republicans, who hold a razor-thin majority, appeared unwilling to raise the debt ceiling unless they could extract <a href="https://apnews.com/article/debt-limit-bill-house-republicans-kevin-mccarthy-f73e6c2fce8abdfab4973c727ea79517">deep spending cuts</a>. Meanwhile, Biden <a href="https://www.reuters.com/world/us/biden-will-talk-budget-wont-negotiate-debt-ceiling-congress-meeting-white-house-2023-05-02/">refused to negotiate</a>, insisting on a clean debt ceiling bill. Both of those positions were dropped during negotiations. </p>
<p>Why did it take so long for them to reach a compromise? </p>
<p>Blame political trends that have been accelerating for decades, explained <a href="https://scholar.google.com/citations?user=cfH3-8sAAAAJ&hl=en&oi=ao">Laurel Harbridge-Yong</a>, a specialist in partisan conflict and the lack of bipartisan agreement in American politics at Northwestern University. Many Republicans come from very safe districts, which means their primary against other conservatives is more important than the general election. <a href="https://theconversation.com/most-voters-want-compromise-in-congress-so-why-the-brinkmanship-over-the-debt-limit-206465">This makes it more important to stand firm</a> and fight until the bitter end. </p>
<p>“So you now have many Republicans who are more willing to fight quite hard against the Democrats because they don’t want to give a win to Biden,” she wrote. “Democrats are also resistant to compromising, both because they don’t want to gut programs that they put in place and also because they don’t want to make this look like a win for Republicans, who were able to play chicken and get what they wanted.”</p>
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<strong>
Read more:
<a href="https://theconversation.com/voters-want-compromise-in-congress-so-why-the-brinkmanship-over-the-debt-ceiling-206465">Voters want compromise in Congress -- so why the brinkmanship over the debt ceiling?</a>
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<h2>5. Latest in a long line of fiscal crises</h2>
<p>This was hardly the first fiscal crisis the U.S. government has faced. In fact, there have been many – including 22 government shutdowns since just 1976. </p>
<p><a href="https://www.linkedin.com/in/raymond-scheppach-19b98536">Raymond Scheppach</a>, a professor of public policy at University of Virginia, <a href="https://theconversation.com/link-205178">offered a brief history</a> of recent crises and the damage they’ve caused – and why a default would be far more consequential than past crises.</p>
<p>“While these were very disruptive and damaged the economy and employment, they pale in comparison to the potential effects of failing to lift the debt ceiling, which could be catastrophic,” he wrote. “It could bring down the entire international financial system. This in turn could devastate the world gross domestic product and create mass unemployment.”</p>
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Read more:
<a href="https://theconversation.com/a-brief-history-of-debt-ceiling-crises-and-the-political-chaos-theyve-unleashed-205178">A brief history of debt ceiling crises and the political chaos they've unleashed</a>
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<p><em>Editor’s note: This story is a roundup of articles from The Conversation’s archives. Portions of this article originally appeared in <a href="https://theconversation.com/yellen-puts-congress-on-notice-over-impending-debt-default-date-5-essential-reads-on-whats-at-stake-204863">a previous article</a> published on May 2, 2023.</em></p><img src="https://counter.theconversation.com/content/206174/count.gif" alt="The Conversation" width="1" height="1" />
The deal would raise the ceiling for two years, cap some federal spending and impose new work requirements on certain federal benefits. It still needs the blessing of Congress.Bryan Keogh, Managing EditorMatt Williams, Senior International EditorLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2037072023-04-13T19:26:32Z2023-04-13T19:26:32ZWhy is Tax Day on April 18 this year? And how did early spring become tax season, anyhow?<figure><img src="https://images.theconversation.com/files/520926/original/file-20230413-28-prjdsv.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4000%2C2646&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A red-letter day? Hardly!</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/tax-payment-day-marked-on-a-calendar-april-18-2023-royalty-free-image/1461423007?phrase=tax%20deadline%202023&adppopup=true">iStock / Getty Images Plus</a></span></figcaption></figure><p>Mid-April has arrived. And along with the spring sunshine, that means the often dreaded civic duty of finishing off one’s taxes.</p>
<p>It’s an arduous time for many, characterized by navigating increasingly confusing rules to arrive at the best refund possible. For some, it means <a href="https://theconversation.com/i-tried-to-pay-my-taxes-in-cash-heres-what-happened-and-why-the-irs-should-make-it-easier-to-do-so-203282">writing a check</a> to the federal government. Not fun.</p>
<p>On a brighter note, the tax deadline has been pushed back to April 18 this year, giving those leaving it to the last minute a few extra days. Usually, the day falls on April 15.</p>
<p>But why is Tax Day in April anyway? Well, it hasn’t always been.</p>
<p>The federal individual income tax was permanently enacted by the <a href="https://www.reaganlibrary.gov/constitutional-amendments-amendment-16-income-taxes#:%7E:text=The%20Congress%20shall%20have%20power,to%20any%20census%20or%20enumeration.">16th Amendment in 1913</a>. Before that, the only federal individual income tax that existed was in place for <a href="https://guides.loc.gov/this-month-in-business-history/april/tax-day">about a decade beginning in 1861 to ease the financial burden of the Civil War</a> on the government.</p>
<h2>Extending the deadline</h2>
<p>The tradition of filing tax returns in early spring has historically been a practical one. Since individual tax returns encompass a calendar year, Congress sought to allow time for individuals to fully account for all of their income, deductions and credits.</p>
<p>The original due date for individual income tax returns was March 1, just over a year following the adoption of the 16th Amendment on Feb. 3, 1913.</p>
<p>Back then, not many taxpayers needed to file a tax return, since the filing requirement applied only to <a href="https://www.crf-usa.org/bill-of-rights-in-action/bria-11-3-b-the-income-tax-amendment-most-thought-it-was-a-great-idea-in-1913.html">single filers with income over US$3,000</a> and married filers with income over $4,000 – about $90,000 and $120,000 in today’s dollars, respectively.</p>
<p>In 1914, this threshold represented approximately the top 4% of earners, so filing a tax return was a burden reserved for the wealthy.</p>
<p>Quickly realizing that many taxpayers needed more time to complete their returns, Congress pushed the tax deadline back to March 15, effective in 1919.</p>
<p>And on that date Tax Day stood for over 30 years. </p>
<p>But with more taxpayers needing to file returns <a href="https://www.irs.gov/pub/irs-soi/02inpetr.pdf">as the filing threshold declined</a> and the tax laws grew in complexity, Americans needed even more time to correctly complete their returns.</p>
<p>So in 1954, Congress overhauled the tax system and adopted a major revision to the <a href="https://www.census.gov/history/www/reference/privacy_confidentiality/title_26_us_code_1.html">Internal Revenue Code</a>.</p>
<p>This change also came with another extension of the tax deadline for individuals, pushing the due date back again to the familiar April 15.</p>
<p>The intent of giving taxpayers an extra month to prepare their returns was to allow more people the ability to file on time – and often get refunds more quickly. Not only did this change assist taxpayers, but it also allowed the Internal Revenue Service <a href="https://taxprof.typepad.com/taxprof_blog/2017/04/weekly-tax-highlight-and-roundup-1.html">more time to spread out its workload</a>.</p>
<p>The April 15 deadline proved to be a more reasonable deadline, and it has stuck with U.S. taxpayers for almost 70 years.</p>
<p>Since 1955, the IRS has established earlier due dates for many information returns that provide numbers feeding into Form 1040, such as Forms 1099 and W-2, both of which are due Jan. 31, to ensure that most taxpayers are able to file by Tax Day.</p>
<p>In 2016, the IRS pushed the due date of <a href="https://www.journalofaccountancy.com/news/2015/jul/tax-return-due-dates-changed-201512746.html">other returns forward a month to March 15</a>, again in an effort to allow more individuals to timely file.</p>
<h2>So why later this year?</h2>
<p>The mid-April date seems to work for the majority of taxpayers – in most years, anyhow. According to the IRS, <a href="https://www.irs.gov/statistics/filing-season-statistics">about 90% of taxpayers</a> were able to file their returns by the deadline in 2021, with the other 10% requesting <a href="https://www.irs.gov/forms-pubs/extension-of-time-to-file-your-tax-return#:%7E:text=Individual%20tax%20filers%2C%20regardless%20of,until%20the%20next%20business%20day.">a six-month extension to file</a>.</p>
<p>But for the tax year 2022, <a href="https://www.forbes.com/advisor/taxes/how-to-file-a-tax-extension-with-the-irs/#:%7E:text=Millions%20of%20Americans%20file%20federal,season%2C%20according%20to%20the%20IRS.">about 19 million taxpayers extended their returns</a>, a significant increase from prior years due to the increased complexity of the tax code brought on by temporary provisions relating to the COVID-19 pandemic.</p>
<p>So why is Tax Day this year April 18 instead of April 15?</p>
<p>Any time a deadline falls on a Saturday or Sunday, the IRS pushes the due date to the following Monday, which would be April 17, 2023. However, any federal holiday also pushes the date back by a day. Since <a href="https://emancipation.dc.gov/#:%7E:text=It%20is%20this%20legislation%2C%20and,April%2016%2C%20DC%20Emancipation%20Day.">Emancipation Day, which usually falls on April 16</a>, is observed in Washington, D.C., on April 17 this year, Tax Day was pushed back an additional day to Tuesday, April 18, 2023.</p>
<p>While having a tax deadline of April 18 happens only about every six years, the IRS occasionally pushes back the filing deadline for emergency situations like natural disasters, although these are often local. For example, the IRS extended the original due date of individual tax returns in disaster areas in <a href="https://tax.thomsonreuters.com/news/california-alabama-georgia-may-15-disaster-relief-deadline-extended-to-october-16/">Alabama, California and Georgia until Oct. 16, 2023</a>. Similarly, the IRS pushed the national deadline <a href="https://www.irs.gov/newsroom/payment-deadline-extended-to-july-15-2020">back to July 15, 2020</a>, in the early stages of the COVID-19 pandemic.</p>
<p>So use your extra days of tax preparation time wisely in 2023 and be sure to file your individual income tax return, or request an extension to file by April 18.</p>
<p>Although this time of year can often be <a href="https://www.cnn.com/2019/04/12/health/tax-day-money-stress/index.html">stressful and confusing because of complicated tax laws</a>, it will be over soon enough.</p><img src="https://counter.theconversation.com/content/203707/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Thomas Godwin does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The federal government wanted to give taxpayers a couple months to prepare the year’s taxes. But as filing became more complex, the date was pushed back.Thomas Godwin, Assistant Professor of Accounting, Purdue UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2036162023-04-13T12:24:02Z2023-04-13T12:24:02ZAmericans spend more time and money filing their taxes than residents of other countries — but there are some benefits to a complex tax code<figure><img src="https://images.theconversation.com/files/520568/original/file-20230412-22-xymmgt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The average U.S. taxpayer spends 13 hours filing their return.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/forms-royalty-free-image/109504675">Mehmed Zelkovic/Moment Collection/Getty Images</a></span></figcaption></figure><p>Tax Day falls on April 18 in 2023. But if you’re one of the <a href="https://www.irs.gov/pub/irs-utl/filing-season-statistics-2009-to-current-year.csv">20%-25% of Americans</a> who wait until the last minute to file, don’t panic – you still have time.</p>
<p>The IRS estimates that the average taxpayer spends <a href="https://www.irs.gov/pub/irs-pdf/i1040gi.pdf">13 hours</a> to complete their return. If you own a business, the estimate increases to <a href="https://www.irs.gov/pub/irs-pdf/i1040gi.pdf">25 hours</a>. That said, filing can be tricky.</p>
<p>As <a href="https://scholar.google.com/citations?user=9MFrZwUAAAAJ&hl=en">accounting</a> <a href="https://scholar.google.com/citations?user=kR0qeI4AAAAJ&hl=en&oi=ao">professors</a> and hosts of the podcast “<a href="https://www.taxes-for-the-masses.com">Taxes for the Masses</a>,” we know the U.S. tax system is more complex than many other countries. That complexity, however, has benefits as well as drawbacks.</p>
<h2>Simpler tax systems abroad</h2>
<p>Although the U.S. income tax system asks individuals to devote their time to complete a tax return each year – or pay someone to do it for you – dozens of countries have found another way. </p>
<p>Some nations, <a href="https://www.taxpolicycenter.org/briefing-book/what-other-countries-use-return-free-filing">such as the U.K.</a>, offer return-free systems where taxpayers have the exact correct amount of income tax withheld from their earnings during the year. </p>
<p>Other countries, <a href="https://www.oecd.org/tax/administration/36280368.pdf">such as Denmark and Spain</a>, offer tax reconciliation systems whereby the tax authority fills out the return for the taxpayer using information from third parties, such as employers and banks, with knowledge of your financial goings-on. All the taxpayer must do is review the form and submit any corrections. These systems shift the costs of determining one’s tax bill – currently estimated to be over <a href="https://www.gsa.gov/cdnstatic/54121D%20Tax%20Preparation%20Services%20in%20the%20US%20Industry%20Report.pdf">US$11 billion</a> a year in the U.S. – <a href="https://www.jstor.org/stable/40913156">from taxpayers to the government</a>. </p>
<p>The goal of return-free and tax reconciliation systems is to withhold the exact right amount of tax during the year so there’s no need to true up these amounts to the actual tax liability. So why can’t the U.S. do something similar? Well, exact withholding is easiest to do when the tax code is simple. And the U.S. tax code is not simple.</p>
<p>In fact, when the Treasury Department reported to Congress in 2003 on the feasibility of a return-free system in the U.S., the report was titled <a href="https://home.treasury.gov/system/files/131/Report-Return-Free-2003.pdf">Tax Simplification is a Prerequisite</a>.</p>
<h2>What makes the US system so complex?</h2>
<p>A simpler system taxes each individual separately. The U.S., however, taxes single individuals and married couples differently. This approach makes it difficult to withhold the right amount of tax because the applicable tax rate depends on more than just your income. It includes, for example, that of your spouse, which your bank or employer may not know.</p>
<p>A simpler system would also have flat or fewer tax rates. Instead, the U.S. has numerous tax brackets, with the goal of ensuring that higher earners pay higher rates of income tax. Although progressive rate structures like this <a href="https://us.aicpa.org/content/dam/aicpa/advocacy/tax/downloadabledocuments/tax-policy-concept-statement-no-1-global.pdf">are aimed at fairness</a>, in that those who can afford to pay more do pay more, this type of tax system adds complexity. </p>
<p>Other countries retain progressive systems with fewer tax brackets. For example, the U.K. currently has <a href="https://www.gov.uk/income-tax-rates">four tax brackets</a>, compared with <a href="https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2022">seven in the U.S</a>.</p>
<p>The U.S. also has different rates for ordinary income such as wages versus income such as dividends and capital gains, which are typically taxed at lower rates – in part to spur investment and also because investment income has arguably already been taxed. But the U.S. system adds complexity because capital gains on investments held for less than a year and some dividends are not taxed at preferential rates. These different rates – from different levels and types of income – reduce the chances of getting withholding right. </p>
<p>The U.S. system also adds complexity with the <a href="https://www.irs.gov/credits-deductions-for-individuals">sheer number of deductions and credits</a> available to taxpayers. Deductions reduce the amount of taxable income you have, thereby reducing your tax liability. Say a single individual has $80,000 of wage income and $15,000 of deductions. Their taxable income is $65,000. At 2022 rates, their tax liability is $9,617. Those $15,000 of deductions saved them $3,300 in taxes. </p>
<p>Fortunately, there are a lot deductions. Unfortunately, taxpayers often have to jump through hoops to qualify. You can deduct <a href="https://www.irs.gov/taxtopics/tc419">gambling losses</a> but only if you have gambling winnings, <a href="https://www.irs.gov/taxtopics/tc503">state income taxes</a> but only up to $10,000 each year, and <a href="https://www.irs.gov/taxtopics/tc456">student loan interest</a> but only if you make less than $85,000 or $175,000, depending on your marital status. </p>
<p>Further, these deductions come in different flavors: “above-the-line” deductions and “below-the-line” deductions, which themselves come in two flavors – itemized and standard. Taxpayers itemize deductions only if those amounts exceed the standard deduction. That means you might spend several hours tallying receipts for <a href="https://theconversation.com/whats-the-charitable-deduction-an-economist-explains-162647">itemized charitable donations</a> only to find you can’t deduct any of them because the total is less than your standard deduction. </p>
<p>Credits are another valuable element of the tax system because they reduce your tax liability dollar for dollar. Let’s go back to our single taxpayer with $65,000 in taxable income and a $9,617 tax liability before credits. A $1,000 credit – say for higher education or renewable energy – reduces their tax liability to $8,617. But credits also add complexity because they can be reduced as your income increases, and they can have extensive eligibility requirements.</p>
<h2>Benefits of a complex system</h2>
<p>One benefit of all this complexity is that it gives the tax system flexibility to provide economic stimulus and other responses to current events, like a global pandemic. For example, Congress allowed taxpayers to receive <a href="https://theconversation.com/a-300-charitable-deduction-explained-138247">guaranteed tax benefits</a> for some <a href="https://taxfoundation.org/charitable-deduction-tax-incentives/">charitable contributions</a> made during the pandemic as above-the-line deductions, instead of the usual requirement that taxpayers first determine whether they could itemize the charitable contribution as a below-the-line deduction. </p>
<p>Even if the U.S. could drastically simplify its tax system, a return-free or tax reconciliation system comes with its own problems. Transitioning would require a significant investment in IRS resources, and although in 2022 Congress passed an <a href="https://www.cbo.gov/publication/57444">$80 billion boost to IRS funding</a> over the next 10 years, much of this amount is needed to shore up the current system. </p>
<p>And estimates suggest that, at best, a return-free or tax reconciliation system in the U.S. would work for only <a href="https://www.taxpolicycenter.org/briefing-book/what-are-benefits-return-free-filing">62 million taxpayers</a>, meaning the majority of U.S. taxpayers would still have to complete a tax return because the withholding or pre-populated return wouldn’t be right. </p>
<p>Meanwhile, a simpler tax system potentially makes it more difficult for Congress to use tax policy to stimulate the economy or encourage certain desirable behaviors, such as investing in <a href="https://www.epa.gov/green-power-markets/inflation-reduction-act">renewable energy</a>. </p>
<p>Finally, exact withholding, when it works correctly, takes away the sizable refunds <a href="https://www.researchgate.net/publication/228272373_An_Investigation_of_Why_Taxpayers_Prefer_Refunds_A_Theory_of_Planned_Behavior_Approach">some Americans enjoy</a>. </p>
<p>In the end, no tax system is perfect. The U.S. must decide whether the complexity of its tax system is worth the time and the <a href="https://www.irs.gov/pub/irs-pdf/i1040gi.pdf">average $250 cost</a> taxpayers spend on filing their own returns instead of spending that on more pleasant activities.</p><img src="https://counter.theconversation.com/content/203616/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The co-hosts of the ‘Taxes for the Masses’ podcast explain the upside and downside of all those credits and deductions.Bridget Stomberg, Associate Professor of Accounting, Indiana UniversityLisa De Simone, Associate Professor of Accounting, The University of Texas at AustinLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1983842023-03-07T13:44:20Z2023-03-07T13:44:20ZHow the ‘Holman rule’ allows the House to fast-track proposals to gut government programs without debate or much thought at all<figure><img src="https://images.theconversation.com/files/512755/original/file-20230228-1571-bdrau5.jpeg?ixlib=rb-1.1.0&rect=26%2C26%2C5964%2C3952&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Reinstituted rules in the U.S. House of Representatives allow members to fire federal staffers and cut programs.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/pedestrian-walks-through-the-capitol-plaza-with-the-dome-of-news-photo/1247545875?phrase=Capitol%20building%20U.S.&adppopup=true">Kent Nishimura / Los Angeles Times via Getty Images</a></span></figcaption></figure><p>The slim Republican majority in the House of Representatives has just voted to give itself a streamlined way to fire civil servants and shut down federal programs it doesn’t like – outside the standard process of review and debate. </p>
<p>This method, known as the <a href="https://www.washingtonpost.com/politics/2023/01/10/gop-holman-rule-unions-biden-congress/">Holman rule</a>, has been used in the past by both parties to cloak political decisions in the language and process of saving taxpayers money. It was included in a package of rules approved as the House began its business in January. </p>
<p>As <a href="https://history.house.gov/People/Appointed-Officials/General-Counsels/">a former acting general counsel of the U.S. House of Representatives</a> and the author of <a href="https://www.google.com/books/edition/Congressional_Practice_and_Procedure/uSmcAAAAMAAJ?hl=en">a treatise on congressional procedure</a>, I know that this method has been used in the past to push extreme political agendas through the political process without due consideration for the public interest. And it’s likely to happen again.</p>
<p>Florida Republican <a href="https://www.washingtonpost.com/politics/2023/01/10/gop-holman-rule-unions-biden-congress/">Rep. Kat Cammack spoke about the Holman rule’s adoption</a> on the House floor in early January 2023, calling federal officials “unelected bureaucrats, the true, real swamp creatures here in D.C.,” saying they had “run roughshod over the American people without consequence.”</p>
<p>“Today marks our first move, and certainly not our last, to hold them accountable.”</p>
<p>Jacqueline Simon, public policy director of the American Federation of Government Employees, <a href="https://www.afge.org/article/afge-ready-to-mobilize-against-proposals-targeting-workers-under-revived-holman-rule/">sees the Holman rule differently:</a> “It goes around everything that protects the civil service from political corruption — not just federal employees but entire agencies. It is precisely for theater and to create chaos and disrupt the operation of federal agencies, including law enforcement agencies.” </p>
<p>The rule allows House members to transform the normal process of compiling appropriation bills – normally, lists of amounts of money to be spent – into vehicles <a href="https://www.washingtonpost.com/politics/2023/01/10/gop-holman-rule-unions-biden-congress/">to fire government employees and shut down programs</a> they don’t like. </p>
<p>Anything is ripe for cutting with the Holman rule, from environmental protection agencies to government efforts for human rights to existing programs for addressing sales of semi-automatic weapons.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/512757/original/file-20230228-26-qac3ix.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A blond-haired woman in a red and white dress in front of a building's entrance." src="https://images.theconversation.com/files/512757/original/file-20230228-26-qac3ix.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/512757/original/file-20230228-26-qac3ix.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/512757/original/file-20230228-26-qac3ix.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/512757/original/file-20230228-26-qac3ix.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/512757/original/file-20230228-26-qac3ix.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/512757/original/file-20230228-26-qac3ix.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/512757/original/file-20230228-26-qac3ix.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Republican Rep. Kat Cammack says the Holman rule is needed because ‘unelected bureaucrats, the true, real swamp creatures here in D.C.,’ have ‘run roughshod over the American people.’</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/rep-kat-cammack-r-fla-leaves-a-meeting-of-the-house-news-photo/1247560662?phrase=kat%20cammack&adppopup=true">Tom Williams/CQ-Roll Call, Inc via Getty Images</a></span>
</figcaption>
</figure>
<h2>Fast and furious</h2>
<p>Normally, such cuts to staff or programs would have to go <a href="https://books.google.com/books/about/Congressional_practice_and_procedure.html?id=uSmcAAAAMAAJ&subject=Charles%20Tiefer,%20Congressional%20Practice%20and%20Procedure%20186%20(1989)">through an extensive review process</a>, either to restructure or abolish programs. </p>
<p>That process includes initial drafting of a full-scale bill, subcommittee and full committee hearings and debates, testimony and evidence presented by the president’s administration, press coverage of these steps and adaptation of Congress members’ positions in light of that coverage. Then, votes are held on edits to the bill, known as markups, after which there is a separate committee vote on reporting the bill out to the full House, the drafting of committee report sections by supporters and opponents – and even more after that.</p>
<p>But Holman sidesteps that considered process. </p>
<p>It allows provisions for altering or abolishing programs to be offered to and made a part of appropriation bills, as long as the provision putatively saves money. Under Holman, individual House members offer amendments during full House consideration of a bill on the floor. As long as these amendments <a href="https://sgp.fas.org/crs/misc/R44736.pdf">cut spending</a>, they are considered proper. </p>
<p>For example, the <a href="https://www.congress.gov/bill/117th-congress/house-bill/5376/text">Inflation Reduction Act of 2022</a> <a href="https://crsreports.congress.gov/product/pdf/IN/IN11977">created a program</a> to improve the technology infrastructure of the IRS and to hire more auditors to focus on the wealthy and corporations. Estimates are the program <a href="https://federalnewsnetwork.com/congress/2023/01/house-gop-prioritizes-end-to-unnecessary-federal-programs-cutting-80b-from-irs/?subject=Jory%20Heckman,%20%22House%20GOP%20Prioritizes%20End%20to%20'Unnecessary'%20Federal%20Programs,%20Cutting%20%2480B%20from%20IRS.%22">will cost US$80 billion over a decade</a>. Proposed changes to that program in legislation that goes the normal route through many hearings might get bogged down in debate. </p>
<p>But under Holman, a critic of the program could just drop a change into the must-pass part of the appropriations bill that contains spending for Treasury Department operations and kill or alter the program. No one could stop that from happening unless they chose to vote against the entire appropriations bill, which funds that whole department of the government.</p>
<p>Similarly, the EPA proposes to strengthen regulations limiting the oil and gas industry’s <a href="https://www.epa.gov/controlling-air-pollution-oil-and-natural-gas-industry">methane emissions</a>, a potent greenhouse gas. A House critic of the methane-control program could just pop into the appropriations bill containing spending on the EPA a Holman rule provision that either cuts the program head’s salary to $1 or terminates the program altogether.</p>
<h2>Bipartisan tool – for a time</h2>
<p>Historically, the Holman rule, named after <a href="https://history.house.gov/Historical-Highlights/1851-1900/The-Holman-Rule/">Rep. William S. Holman of Indiana</a>, wasn’t a tool of only the Republican Party. It was first developed in 1876 when a <a href="https://law.yale.edu/sites/default/files/documents/pdf/mccubbins.pdf?subject=Gary%20W.%20Cox%20and%20Mathew%20D.%20McCubbins,%20%22Legislative%20Leviathan%20Revisited%20%20at%20%2249.">Democratic House majority faced a Republican president.</a> I wrote about the history of the Holman rule in my <a href="https://archive.org/details/congressionalpra0000tief">book on congressional practice and procedure</a>.</p>
<blockquote>
<p>At the time, the Democratic Party held what would later be called the solid South (today, these areas are usually Republican) and sought to expel Yankee Reconstruction – and repeal the laws behind it. Democrats adopted the Holman Rule to get those repeals of law past President Grant.</p>
</blockquote>
<p>The Holman rule could be, and was, put to diverse uses in its early days. </p>
<p><a href="https://crsreports.congress.gov/product/pdf/R/R44736">The Congressional Research Service says</a>, “A broad initial construction of the rule by the House resulted in putting a great mass of general legislation upon the appropriation bills.”</p>
<p>The Holman rule was used from 1876 to 1895 and again from 1911 to 1983. It was brought <a href="https://www.washingtonpost.com/local/virginia-politics/house-republicans-revive-obscure-rule-that-could-allow-them-to-slash-the-pay-of-individual-federal-workers-to-1/2017/01/04/4e80c990-d2b2-11e6-945a-76f69a399dd5_story.html">back into use by the GOP in 2017</a>. When Democrats took over the House in <a href="https://www.washingtonpost.com/politics/2023/01/10/gop-holman-rule-unions-biden-congress/">2019, they dropped it</a>. </p>
<p>In one notable attempt in 2017, House Republicans were <a href="https://www.washingtonpost.com/politics/2023/01/10/gop-holman-rule-unions-biden-congress/">angry about evaluations of proposed legislation by</a> <a href="https://crsreports.congress.gov/product/pdf/R/R44736">staff of the nonpartisan Budget Analysis Division</a> of the Congressional Budget Office. So, they used the Holman rule to try to abolish that division and move its employees to another part of its parent agency, making the proposal in a wider budget allocation bill.</p>
<p>Holman allowed disgruntled Republicans to rush their proposal onto the House floor, instead of going through slower, more deliberative processes of examining whether the Budget Analysis Division was fulfilling its mission. The vote to eliminate the division failed, but, significantly, the use at that time of <a href="https://www.washingtonpost.com/local/virginia-politics/house-republicans-revive-obscure-rule-that-could-allow-them-to-slash-the-pay-of-individual-federal-workers-to-1/2017/01/04/4e80c990-d2b2-11e6-945a-76f69a399dd5_story.html">the Holman rule was promoted by the same faction</a> of the Republican party, <a href="https://perry.house.gov/uploadedfiles/hfc_rules_reforms_proposal_7.25.2022.pdf">the Freedom Caucus, that has advocated for</a> using the rule now.</p>
<h2>Greasing the skids</h2>
<p>There are a number of situations that could lead current House Republicans to use the Holman rule. </p>
<p>First, House Republican leaders may need to unify their party <a href="https://www.washingtonpost.com/local/virginia-politics/house-republicans-revive-obscure-rule-that-could-allow-them-to-slash-the-pay-of-individual-federal-workers-to-1/2017/01/04/4e80c990-d2b2-11e6-945a-76f69a399dd5_story.html">to pass controversial appropriation bills</a> in the face of anticipated unanimous Democratic resistance. Allowing Holman amendments to be proposed by members with extreme views may get needed legislative support from the fringe of the caucus.</p>
<p>House passage of provisions to cut or wipe out programs and whole agencies has two effects. House Republicans can demoralize agency employees who do not know whether to take jobs elsewhere or stay. And House passage may presage passage by the whole Congress. </p>
<p>An attempt by the Senate Democratic majority to kill a House-passed Holman rule provision when it considers legislation sent over from the House <a href="https://www.pewresearch.org/fact-tank/2022/08/26/finding-60-votes-in-an-evenly-divided-senate-a-high-bar-but-not-an-impossible-one/">would need 60 votes to move ahead</a>. That would require votes from almost a dozen Republican members, which may not be possible to get.</p>
<p>An appropriations bill that contains Holman provisions would then go <a href="https://www.senate.gov/committees/committees_faq.htm#conference_committee">to conference</a>, which is a temporary committee made up of House and Senate legislators and formed to reconcile differences in legislation passed by both chambers. Senate Democrats may go along, even with objectionable Holman or other provisions, to get buy-in from all the factions of the House Republican party needed for passage of the appropriations bill and avoidance of a government shutdown.</p>
<p>Which brings us full circle to where the Holman rule started, with the southern Democrats’ aim to force through House provisions that Republican President Ulysses S. Grant did not want. </p>
<p>Would President Joe Biden veto all the appropriation bills that have any Holman rule-passed provisions?</p><img src="https://counter.theconversation.com/content/198384/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Tiefer does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>House Republicans have adopted a rule used periodically over the past 150 years that allows lawmakers to speed up and streamline votes to dismantle federal programs and fire federal employees.Charles Tiefer, Professor of Law, University of BaltimoreLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1988502023-01-31T17:15:07Z2023-01-31T17:15:07ZTax returns: scams are rising rapidly – how to spot a fake phone call and avoid falling victim<figure><img src="https://images.theconversation.com/files/507212/original/file-20230130-6879-li686o.jpg?ixlib=rb-1.1.0&rect=20%2C0%2C4600%2C3353&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">If only it was this easy to detect a scam phone call.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/illustration-depicting-phone-scam-call-concept-294261113">Sam72/Shutterstock</a></span></figcaption></figure><p>Tax deadlines, such as the annual <a href="https://www.gov.uk/government/news/almost-57-million-customers-still-to-file-their-tax-return">January 31 deadline</a> for filing UK self-assessment tax returns, typically cause <a href="https://www.gov.uk/government/news/hmrc-warns-of-landline-scams-threatening-households">an uptick</a> in <a href="https://www.irs.gov/newsroom/dirty-dozen">tax scams</a>. This year, for example, an ad for a costly connection service <a href="https://inews.co.uk/inews-lifestyle/money/bills/hmrc-phone-number-scam-charged-calls-free-2093547">disguised as the British tax authority’s phone number</a> is appearing at the top of search engine results for the agency’s contact details. </p>
<p>But it’s much more common for tax fraudsters to rely on unsolicited phone calls to extract information and money from victims. Each year the UK’s HM Revenue & Customs (HMRC) and the US Inland Revenue Service (IRS) post warnings and updated lists of such bogus calls and phishing schemes. At any one time there are <a href="https://researchportal.port.ac.uk/portal/files/1926122/NFA_report3_16.12.09.pdf">many different types of tax scammers</a> attempting to trick unsuspecting people into <a href="https://www.actionfraud.police.uk/a-z-of-fraud-category/other">handing over money</a> to pay fake penalties and charges.</p>
<p>HMRC <a href="https://www.gov.uk/government/news/self-assessment-customers-could-be-a-target-for-fraudsters-hmrc-warns">responded to more than 180,000 reports</a> of suspicious contact made by people in the 12 months to August 2022, and almost 81,000 of them were scams offering fake tax rebates to access victims’ bank details. In the US, similar <a href="https://www.irs.gov/pub/irs-utl/2022-isac-annual-report.pdf">reports of such suspicious activity</a> grew from around 2 million to 8 million between 2021 and 2022, according to figures from the IRS.</p>
<p>When <a href="https://www.ato.gov.au/general/online-services/identity-security-and-scams/scam-alerts/?=redirected_ScamAlerts">tax agencies warn</a> people of such scams, they generally detail “phishing” attempts. This is when people are contacted and asked for <a href="https://www.proquest.com/trade-journals/lawyer-irs-phishing-emails-become-todays-nigerian/docview/1883110572/se-2">private or sensitive information</a> by someone pretending to be an official agency. This could happen because your contact information was stored in a database that has been hacked by criminals, exposing this private information to scammers.</p>
<p>During the tax filing period in particular, fraudsters have been known to <a href="https://www.icaew.com/insights/viewpoints-on-the-news/2021/april-2021/why-hmrc-impersonation-scammers-are-so-successful">impersonate government employees</a> in an attempt to persuade or even threaten victims into handing over money or personal details. If you receive such a call, it might look like a legitimate number and could even include background noise that resembles a call centre to make the scam seem more authentic. </p>
<p>The fraudsters might pressure you to wire money through services such as Western Union or MoneyGram or to send a bank transfer. There have even been reports of scammers asking for <a href="https://www.cnbc.com/2018/03/05/would-you-pay-those-back-taxes-with-itunes-gift-cards.html">payment of back taxes using gift cards</a>.</p>
<p>The scammers might say you’ve miscalculated your tax payment in a previous year and must now pay to avoid a penalty, for example. They may provide a reference number, again to make the call seem more realistic, or a fake identification number for the officer that calls you. The amounts requested could vary from hundreds to thousands.</p>
<p>And although anyone can fall victim, <a href="https://www.ageuk.org.uk/globalassets/age-uk/documents/reports-and-publications/reports-and-briefings/safe-at-home/rb_oct17_scams_party_conference_paper_nocrops.pdf">the elderly</a> and <a href="https://www.icaew.com/insights/viewpoints-on-the-news/2021/april-2021/why-hmrc-impersonation-scammers-are-so-successful">immigrants</a> are among those that tend to be at greater risk of being successfully targeted by these scammers. Aside from the obvious financial cost, such loses can devastate victims, with some people even <a href="https://journals.sagepub.com/doi/10.1177/0004865814521224">attempting suicide</a> due to misplaced embarrassment or shame at being tricked and losing money. </p>
<h2>How to spot a tax scam</h2>
<p>There is little research into this type of scam, which can make it difficult to identify common features. Plus, the operators often work internationally or are <a href="https://www.iphoneincanada.ca/news/cra-phone-scam/">based in other countries</a>, particularly <a href="https://www.channelnewsasia.com/cna-insider/tech-support-scam-baiters-india-call-centre-big-money-2876366">those</a> in which western authorities find it hard to prosecute <a href="https://www.justice.gov/usao-ndga/pr/multiple-india-based-call-centers-and-their-directors-indicted-perpetuating-phone-scams">the groups involved</a>.</p>
<p>Our research looked at <a href="http://web.nacva.com/JFIA/Issues/JFIA-2020-No1-10.pdf">recordings of calls with scammers</a> to determine some common features. Unsurprisingly, <a href="https://www.researchgate.net/publication/344808384_Profiling_HMRC_and_IRS_Scammers_by_Utilizing_Trolling_Videos_Offender_Characteristics">we found that</a> tax scammers use fake names and often adopt accents and language that matches with the country of the targeted taxpayer.</p>
<p>The <a href="https://www.academia.edu/21409525/Rhetorical_structure_and_persuasive_language_in_the_subgenre_of_online_advertisements">specific language used to persuade potential victims</a> can include common or phrases that sound official such as “tax miscalculation”, but also informal or even emotive words. The idea is to draw you in and encourage you to believe the scam and become worried about the consequences of not paying out. </p>
<p>So, if victims are confrontational or don’t comply, the caller might raise their voice and use insults. It is very unlikely that this would happen on a call with a real HMRC or IRS employee.</p>
<figure class="align-center ">
<img alt="Stressed angry man with beard shouting into a phone." src="https://images.theconversation.com/files/507218/original/file-20230130-12322-aabw4r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/507218/original/file-20230130-12322-aabw4r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/507218/original/file-20230130-12322-aabw4r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/507218/original/file-20230130-12322-aabw4r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/507218/original/file-20230130-12322-aabw4r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/507218/original/file-20230130-12322-aabw4r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/507218/original/file-20230130-12322-aabw4r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">If you don’t pay up, a scammer might get angry on the phone, unlike a real tax agency professional.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/stressed-stock-broker-screaming-on-phone-16138654">Dundanim/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Tax scam scripts</h2>
<p>Scam callers often speak from a “<a href="https://www.journals.vu.lt/IM/article/view/23510">scam script</a>” designed to make them sound more official and authentic, increasing the victim’s <a href="http://publications.ut-capitole.fr/42207/">trust that the call is really from HMRC or the IRS</a>. As part of our research we <a href="https://link.springer.com/article/10.1007/s11896-022-09520-y">compiled examples of steps</a> often included in these scripts. The scripts might be adapted based on the victim, conversation or the level experience of the scammer, but the below chart shows an example of how such a phone scam might play out.</p>
<p><strong>Tax scam call script</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/507209/original/file-20230130-12170-uzucpw.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A flow chart showing a typical tax scam script for a phonecall." src="https://images.theconversation.com/files/507209/original/file-20230130-12170-uzucpw.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/507209/original/file-20230130-12170-uzucpw.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=346&fit=crop&dpr=1 600w, https://images.theconversation.com/files/507209/original/file-20230130-12170-uzucpw.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=346&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/507209/original/file-20230130-12170-uzucpw.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=346&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/507209/original/file-20230130-12170-uzucpw.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=434&fit=crop&dpr=1 754w, https://images.theconversation.com/files/507209/original/file-20230130-12170-uzucpw.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=434&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/507209/original/file-20230130-12170-uzucpw.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=434&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>So, how can you protect yourself from tax scammers?</p>
<p>Both <a href="https://www.irs.gov/newsroom/irs-wraps-up-2022-dirty-dozen-scams-list-agency-urges-taxpayers-to-watch-out-for-tax-avoidance-strategies">the IRS</a> and <a href="https://www.mynewsdesk.com/uk/hm-revenue-customs-hmrc/pressreleases/hmrc-warns-of-landline-scams-threatening-households-2842389">HMRC issue warnings</a> and information about how to distinguish between a scam phone call and one from an actual government department. This information is updated regularly, particularly during and right after tax filing season when scams can increase.</p>
<p>So, be aware and be vigilant; don’t engage with random callers. The IRS and HMRC will never contact you to demand money or threaten you with a penalty. Even if you have made a mistake with your taxes, tax authorities such as HMRC only call about <a href="https://www.mynewsdesk.com/uk/hm-revenue-customs-hmrc/pressreleases/hmrc-warns-of-landline-scams-threatening-households-2842389">payments you already know about</a> – either from an official letter or because you have reported the debt yourself, through your self-assessment tax return, for example.</p>
<p>If you receive a suspicious call, never call back, dial any number they provide, or respond to a voicemail. Search for the official number of your country’s tax office online (in the UK this will end with “<a href="https://www.gov.uk/">gov.uk</a>” and in the US “<a href="https://oig.hhs.gov/notices/official-site.asp">.gov</a>”) to speak to someone about your concerns and check if you really do owe money.</p>
<p>And, if you do receive a call like this, inform your country’s tax agency so they can update their records and make sure people remain aware of the latest tax scams.</p><img src="https://counter.theconversation.com/content/198850/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Tax agencies often report details of common tax scams in the run-up to filing deadlines such as January 31.Calli Tzani, Senior Lecturer in Investigative Psychology, ACPC Deputy Director and ADM Forensic Editor, University of HuddersfieldMaria Ioannou, Professor in Psychology, University of HuddersfieldThomas James Vaughan Williams, Postgraduate Researcher - Part-time lecturer, University of HuddersfieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1978482023-01-19T13:37:53Z2023-01-19T13:37:53ZThe weaponization of the federal government has a long history<figure><img src="https://images.theconversation.com/files/505142/original/file-20230118-12-62f853.jpeg?ixlib=rb-1.1.0&rect=0%2C12%2C8647%2C5743&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">President Nixon urged the IRS to audit his perceived enemies; Donald Trump wanted to do the same.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/tax-form-1040-royalty-free-image/939798290?phrase=irs%20audit&adppopup=true">LPettet/ iStock / Getty Images Plus</a></span></figcaption></figure><p>Now that House Republicans have created a “<a href="https://www.nytimes.com/2023/01/10/us/politics/house-republican-committee-weaponization-government.html">Select Subcommittee on Weaponization of the Federal Government</a>,” let’s revisit a classic of that power-abusing genre, featuring its greatest star, Richard M. Nixon.</p>
<p>The subcommittee’s express purpose is investigating federal investigators for alleged “illegal or improper, unconstitutional, or unethical activities,” at which Nixon was an acknowledged master. I’ve been listening to Nixon abuse power on the <a href="https://millercenter.org/the-presidency/secret-white-house-tapes/about">secret White House tapes</a> for two decades with the <a href="https://www.virginia.edu/">University of Virginia</a>’s <a href="https://millercenter.org/">Miller Center</a>. I’ve written about his decisions to sabotage Vietnam peace talks to <a href="https://www.upress.virginia.edu/title/4886">damage the Democrats’ 1968 presidential campaign</a>, to time his withdrawal from Vietnam to <a href="https://www.upress.virginia.edu/title/4984">help his 1972 reelection campaign</a>, and to <a href="https://prde.upress.virginia.edu/conversations/4006699">spring former Teamsters president Jimmy Hoffa</a> from prison in return for the union’s political support.</p>
<p>This story is a forgotten sequel to the Watergate break-in. No one has ever <a href="https://www.politifact.com/factchecks/2020/may/21/facebook-posts/facebook-post-comparing-obama-allegations-watergat/">proved</a> that President Nixon ordered burglars to photograph documents and plant listening devices at the headquarters of the Democratic National Committee, known as the DNC. </p>
<p>But Nixon himself created proof that he abused his presidential authority to go after the DNC with the investigative powers of the Internal Revenue Service. He captured this high crime on tape less than two months after the Watergate burglars’ arrests.</p>
<h2>‘Can’t we investigate people?’</h2>
<p>“Are we looking over the financial contributors of the Democratic National Committee?” Nixon asked his chief of staff on Aug. 3, 1972. “Are we running their income tax returns? Or is the Justice Department checking to see whether or not there’s any antitrust suits? Do we have anything going on any of these things?”</p>
<p>“Not as far as I know,” said H.R. “Bob” Haldeman.</p>
<p>“We have all this power and we aren’t using it. Now, what the Christ is the matter?” Nixon asked. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/505134/original/file-20230118-23-vtd6ur.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Two men in suits walking on a path toward the White House." src="https://images.theconversation.com/files/505134/original/file-20230118-23-vtd6ur.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/505134/original/file-20230118-23-vtd6ur.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/505134/original/file-20230118-23-vtd6ur.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/505134/original/file-20230118-23-vtd6ur.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/505134/original/file-20230118-23-vtd6ur.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/505134/original/file-20230118-23-vtd6ur.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/505134/original/file-20230118-23-vtd6ur.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">President Richard Nixon walks with his assistant H.R. Haldeman from the Executive Office Building to the White House for a Cabinet meeting in December 1969.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/CapitolRiotWatergate/4f8c6c2b2fc54c96bcbd7d5502c7c9ad/photo?Query=Richard%20Nixon%20Haldeman&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=8&currentItemNo=1">AP photo/file</a></span>
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<p>“We’ve got a guy who’s a pluperfect bastard. He’s a loyalist – he’s a fanatic loyalist – in the IRS,” said John D. Ehrlichman, whose title was assistant to the president for domestic affairs and whose job was <a href="https://www.nytimes.com/1974/03/02/archives/federal-grand-jury-indicts-7-nixon-aides-on-charges-of-conspiracy.html">henchman</a>. </p>
<p>“He’s with us, you mean?” Nixon asked.</p>
<p>“He’s our guy,” Ehrlichman said. “One Treasury secretary after another, starting with [David M.] Kennedy, [John B.] Connally, now [George P.] Shultz, has said, ‘Oh, Jesus, can’t you get this guy out of there? Can’t you just take him out? He’s making all kinds of trouble for us. He’s too partisan.’”</p>
<p>The president’s mood darkened. “Shultz is not long for this life, in my opinion, because he’s not being political enough,” Nixon said. “I don’t care how nice a guy is. I don’t care how good an economist he is. We can’t have this bullshit.” His frustration was growing. “Can’t we investigate people?” Nixon asked. “Is there anything we can do?”</p>
<p>“Yes,” Ehrlichman said.</p>
<p>“I would think that we could get some people with some guts in the second term, when we don’t care about repercussions,” Haldeman said.</p>
<p>Nixon wanted to do something immediately about the <a href="https://www.britannica.com/biography/Larry-OBrien">chairman of the Democratic National Committee, Larry O’Brien</a>. O'Brien directed John F. Kennedy’s victorious presidential campaign in 1960 and Lyndon B. Johnson’s in 1964. “If you could dirty up O’Brien now, I think it might be a lot better than to wait until later,” Nixon said. </p>
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<figcaption>
<span class="caption">President Nixon, right, at a meeting with aide John D. Ehrlichman in 1972.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/NIXONEHRLICHMAN/8b52814648e5da11af9f0014c2589dfb/photo?Query=Nixon%20Ehrlichman&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=16&currentItemNo=13">AP photo</a></span>
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</figure>
<h2>Abuse of power</h2>
<p>Under pressure from the White House, the <a href="https://www.nytimes.com/1974/07/17/archives/former-irs-commissioners-affidavit-on-lawrence-o-brien-audit.html">IRS subjected O’Brien to an audit during the 1972 presidential campaign</a>. The audit found a “relatively small deficiency,” which O’Brien promptly paid. Treasury Secretary Shultz and IRS Commissioner Johnnie Walters told Ehrlichman there was nothing more they could do.</p>
<p>“I wanted them to turn up something and <a href="https://www.nytimes.com/1974/07/11/archives/irs-said-to-shift-plans-for-rebozo-inquiry-on-100000-testimony-by.html">send him to jail</a> before the election,” Ehrlichman later said. There are few purer expressions of authoritarianism than an attempt to jail the titular head of the opposition party during a campaign.</p>
<p>Shortly before Nixon resigned in 1974, the House Judiciary Committee cited his abuse of his power over the IRS in an <a href="https://www.nytimes.com/1974/08/04/archives/the-committees-accusations-article-article-article.html">article of impeachment</a>.</p>
<h2>Chief of staff: Trump requested audits</h2>
<p>In 1998, Congress made it a felony for a president to “<a href="https://www.law.cornell.edu/uscode/text/26/7217">request, directly or indirectly</a>,” an IRS audit or investigation.</p>
<p>None of that stopped President Donald Trump from requesting IRS audits, according to his own former White House chief of staff, John Kelly. </p>
<p>“I would say, ‘It’s inappropriate, it’s illegal, it’s against their integrity, and the IRS knows what it’s doing, and it’s not a good idea,’” <a href="https://www.nytimes.com/2022/11/13/us/politics/trump-irs-investigations.html">Kelly told The New York Times</a> in November 2022. </p>
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<a href="https://images.theconversation.com/files/505139/original/file-20230118-7884-4ignci.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Two men in suits, one with a bright red tie, in an elegant room." src="https://images.theconversation.com/files/505139/original/file-20230118-7884-4ignci.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/505139/original/file-20230118-7884-4ignci.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=461&fit=crop&dpr=1 600w, https://images.theconversation.com/files/505139/original/file-20230118-7884-4ignci.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=461&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/505139/original/file-20230118-7884-4ignci.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=461&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/505139/original/file-20230118-7884-4ignci.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=579&fit=crop&dpr=1 754w, https://images.theconversation.com/files/505139/original/file-20230118-7884-4ignci.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=579&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/505139/original/file-20230118-7884-4ignci.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=579&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">White House Chief of Staff John Kelly, right, says that President Donald Trump wanted the IRS to conduct audits on people Trump had publicly attacked.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/TrumpJohnKelly/494095061494422ab38b47ea714cf6d7/photo?Query=John%20Kelly%20Donald%20Trump&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=627&currentItemNo=10">AP Photo/Pablo Martinez Monsivais</a></span>
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<p>Trump said the IRS should investigate two former FBI officials, Director James Comey and Deputy Director Andrew McCabe, Kelly said. Trump has <a href="https://www.washingtonpost.com/politics/2019/05/23/trump-not-understanding-treason-names-people-he-thinks-committed-capital-crime/">publicly, and baselessly</a>, accused Comey and McCabe of treason, a capital crime.</p>
<p>After Kelly left the White House, both Comey and McCabe were subjected to unusually intense IRS audits, the kind tax lawyers refer to as “an <a href="https://www.nytimes.com/2022/07/06/us/politics/comey-mccabe-irs-audits.html">autopsy without the benefit of death</a>,” New York Times reporter Michael S. Schmidt wrote. Through a spokeswoman, Trump denied any knowledge of the audits. A Trump spokeswoman also denied Kelly’s account.</p>
<p>If Kelly told the truth, then Donald Trump managed to weaponize the IRS more effectively than Richard Nixon. That’s a sentence that I, as the author of <a href="https://www.upress.virginia.edu/title/4886">two</a> <a href="https://www.upress.virginia.edu/title/4984">books</a> on Nixon’s worst abuses of power, found difficult to type. </p>
<p>Kelly has made exactly the kind of credible allegation that a “Select Subcommittee on Weaponization of the Federal Government” worthy of the name would investigate. Yet none of the Republicans who spoke before their <a href="https://www.nytimes.com/2023/01/10/us/politics/house-republican-committee-weaponization-government.html">party-line vote</a> to establish the subcommittee expressed any interest in investigating government weaponization by politicians of their own party. </p>
<p>Congress has the power, even the obligation, to unearth and eliminate government weaponization. But if the subcommittee abuses its power for partisan ends, it will merely be an example of the problem it’s supposed to solve.</p><img src="https://counter.theconversation.com/content/197848/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ken Hughes is a research specialist with the Presidential Recordings Program of the University of Virginia's Miller Center, whose work is funded in part by grants from the National Historical Publications and Records Commission.</span></em></p>The House GOP is scrutinizing federal investigators for alleged abuses of power. But will they probe abuses that may have been committed by members of their own party?Ken Hughes, Research Specialist, the Miller Center, University of VirginiaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1967742023-01-11T20:27:11Z2023-01-11T20:27:11ZResidential school system recognized as genocide in Canada’s House of Commons: A harbinger of change<figure><img src="https://images.theconversation.com/files/503879/original/file-20230110-11-l4i24f.jpeg?ixlib=rb-1.1.0&rect=5%2C10%2C538%2C390&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A rare photo from an Indian Residential School in Fort Resolution, N.W.T. These systems have been labeled a form of genocide by the Canadian House of Commons. </span> <span class="attribution"><span class="source">(Department of Mines and Technical Surveys/Library and Archives Canada)</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/residential-school-system-recognized-as-genocide-in-canada-s-house-of-commons--a-harbinger-of-change" width="100%" height="400"></iframe>
<p>In a historic move, Canada’s House of Commons <a href="https://www.cbc.ca/news/politics/house-motion-recognize-genocide-1.6632450">unanimously recognized</a> the Indian Residential School System (IRS) as genocide on Oct. 27, 2022. </p>
<p>The resolution builds on the 2015 contribution of the <a href="https://nctr.ca/">Truth and Reconciliation Commission of Canada</a>. The commission was <a href="https://www.theglobeandmail.com/opinion/five-reasons-the-trc-chose-cultural-genocide/article25311423/">barred</a> from using the term genocide for legal reasons and instead called the practice cultural genocide. </p>
<p>The recent motion was introduced by member of Parliament Leah Gazan. The move follows <a href="https://www.cbc.ca/news/indigenous/pope-address-maskwacis-alberta-1.6531231">Pope Francis’s acknowledgement</a> during his visit to Canada of the ongoing trauma and damage done by residential schools to Indigenous communities. </p>
<p>It’s possible that <a href="https://www.cbc.ca/news/indigenous/pope-francis-residential-schools-genocide-1.6537203">the Pope’s reference to the Indian Residential Schools as genocide</a> swayed some members of Parliament to agree to this new resolution because this was the second time the concept was introduced to the House. </p>
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Read more:
<a href="https://theconversation.com/i-survived-the-60s-scoop-heres-why-the-popes-apology-isnt-an-apology-at-all-187681">I survived the ’60s Scoop. Here's why the Pope's apology isn't an apology at all</a>
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<figure class="align-right ">
<img alt="Profile of MP Gazan in front of Canadian flag." src="https://images.theconversation.com/files/503317/original/file-20230105-14-hc5tkw.JPG?ixlib=rb-1.1.0&rect=289%2C22%2C4657%2C3255&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/503317/original/file-20230105-14-hc5tkw.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/503317/original/file-20230105-14-hc5tkw.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/503317/original/file-20230105-14-hc5tkw.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/503317/original/file-20230105-14-hc5tkw.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/503317/original/file-20230105-14-hc5tkw.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/503317/original/file-20230105-14-hc5tkw.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">MP Leah Gazan introduced the motion in the House of Commons.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Spencer Colby</span></span>
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</figure>
<p>Gazan’s motion says that in the opinion of the House of Commons, Canada’s residential school system violated Article 2 of <a href="https://www.un.org/en/genocideprevention/documents/atrocity-crimes/Doc.1_Convention%20on%20the%20Prevention%20and%20Punishment%20of%20the%20Crime%20of%20Genocide.pdf">the UN Convention on the Prevention and Punishment of the Crime of Genocide</a>. Article 2 explains that for something to be considered genocide, an “intent to destroy, in whole or in part, a national, ethnical, racial or religious group…” must be evident.</p>
<p>Although Canada’s resolution is non-legally binding, the motion helps Canadians reconceptualize the Indian Residential School system. </p>
<p>Now, genocide can be used to describe the residential schools without the qualifying adjective or disclaimer that it is “only” cultural. This change is beyond a mere alteration of words. For both Canada and the world, it is a significant and consequential change. </p>
<h2>International debates: the Genocide Convention</h2>
<p>The scope of genocide is an <a href="https://doi.org/10.7202/1038713ar">ongoing debate</a> in international law. The current international definition has been reproduced in numerous international statutes, including the <a href="https://www.icc-cpi.int/sites/default/files/RS-Eng.pdf">Rome Statute of the International Criminal Court</a>.</p>
<p>The word genocide was created following the Second World War by the legal scholar, <a href="https://www.unhcr.org/ceu/9486-lemkin-raphael.html">Raphael Lemkin</a>, to describe the destruction of a nation or ethnic group through various means. </p>
<p>The Convention defines genocide as acts committed with the intent to destroy, in whole or in part, a national, ethnical, racial or religious group by five acts: </p>
<blockquote>
<p>a) Killing members of the group,<br>
b) Causing serious bodily or mental harm to members of the group,<br>
c) Deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part,<br>
d) Imposing measures intended to prevent births within the group, and<br>
e) Forcibly transferring children of the group to another group. </p>
</blockquote>
<p>Typically, during debates on the Genocide Convention, items (a) to (c) of the definition are designated elements of physical genocide, while (d) and (e) are identified as biological genocide. This excludes cultural elements and restricts its scope to physical and biological genocide. </p>
<p>These debates on the scope of the Genocide Convention highlight differing views regarding <a href="https://digitallibrary.un.org/record/611058?ln=en">physical, biological and cultural actions</a> intended to terminate a group. Physical genocide is killing or serious injury to a targeted group. Biological genocide is destroying a group’s reproductive capacity. Cultural genocide is destroying a group’s specific characteristics. </p>
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<img alt="" src="https://images.theconversation.com/files/503319/original/file-20230105-20-vwir44.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/503319/original/file-20230105-20-vwir44.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/503319/original/file-20230105-20-vwir44.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/503319/original/file-20230105-20-vwir44.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/503319/original/file-20230105-20-vwir44.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/503319/original/file-20230105-20-vwir44.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/503319/original/file-20230105-20-vwir44.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Pope Francis acknowledged the trauma of the IRS during his papal visit to Canada. Here, he watches a dance in Iqaluit.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Nathan Denette</span></span>
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<p>However, a <a href="https://doi.org/10.1093/ejil/chy025">critical look</a> at the Genocide Convention reveals an element of cultural genocide. </p>
<p>Recognizing cultural genocide within the scope of the Genocide Convention acknowledges that cultural, physical and biological genocide all lead to groups’ <a href="https://www.jstor.org/stable/3811037">social death</a> — what the Genocide Convention attempts to prevent. </p>
<h2>The Genocide Convention and Canada</h2>
<p>The House of Commons’ acceptance of the term genocide supports arguments that what is dominantly conceived as cultural genocide falls within the scope of the Genocide Convention. This now raises new questions about how that interpretation may be applied to Canadian cases. </p>
<p>The House of Commons resolution also indicates new perceptions of old colonial beliefs and emphasizes harms caused by residential schools. </p>
<p>In 1948, at the time of passing the Genocide Convention, the colonial practice to culturally destroy and “civilize natives” was not publicly discouraged. And <a href="https://nationalpost.com/news/canada/canada-threatened-to-abandon-1948-accord-if-un-didnt-remove-cultural-genocide-ban-records-reveal">Canada successfully campaigned against the use of the term “cultural genocide”</a> during discussions on the Convention. </p>
<p>This type of challenge, led by MP Gazan, to these old colonial beliefs and systems is one of many steps that can help lead to massive changes. Old colonial practices and beliefs still abound in <a href="https://muse.jhu.edu/book/26823">literature</a> and <a href="https://doi.org/10.1080/01436590600780011">international law</a>. There is much work to be done. For example, in Canada, <a href="https://www.cbc.ca/news/canada/what-is-a-hate-crime-1.1011612">section 318</a> of Canada’s <a href="https://laws-lois.justice.gc.ca/eng/acts/C-46/page-42.html#h-121176">Criminal Code</a> on hate crime restricts genocide to physical and biological destruction. </p>
<h2>Impact of resolution</h2>
<p>The House of Commons’ recognition of the residential school system as “genocide” within the scope of the Genocide Convention supports viewing cultural genocide as genocide. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/canadas-hypocrisy-recognizing-genocide-except-its-own-against-indigenous-peoples-162128">Canada's hypocrisy: Recognizing genocide except its own against Indigenous peoples</a>
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<p>By doing away with “culture” in describing the IRS, the Canadian House of Commons has now recognized cultural destruction as a possible means of genocide. </p>
<p>Following the path of the House of Commons, individuals may now legitimately refer to the residential school system as genocide. The resolution would also likely <a href="https://www.cbc.ca/news/indigenous/boarding-homes-class-action-settlement-1.6702587">impact future negotiations and cases</a> to compensate victims of the IRS.</p>
<p>This resolution may not have any current implication legally in an international court of law. But it represents a shift in the way we think about our history and may affect future international jurisprudence.</p>
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<img alt="" src="https://images.theconversation.com/files/504104/original/file-20230111-46330-9gl7i5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/504104/original/file-20230111-46330-9gl7i5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=200&fit=crop&dpr=1 600w, https://images.theconversation.com/files/504104/original/file-20230111-46330-9gl7i5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=200&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/504104/original/file-20230111-46330-9gl7i5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=200&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/504104/original/file-20230111-46330-9gl7i5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=251&fit=crop&dpr=1 754w, https://images.theconversation.com/files/504104/original/file-20230111-46330-9gl7i5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=251&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/504104/original/file-20230111-46330-9gl7i5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=251&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="attribution"><a class="source" href="https://www.meetview.ca/sshrc20230120/">Click here to register for In Conversation With Cindy Blackstock</a></span>
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</figure><img src="https://counter.theconversation.com/content/196774/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Temitayo Olarewaju is a recipient of the Law Foundation of British Columbia Graduate Fellowship and a Graduate Fellow at the W Maurice Young Centre for Applied Ethics.
</span></em></p>Canada’s recent resolution to label the Indian Residential School system as genocide (and not cultural genocide) is not a mere alteration of words, it is a significant and consequential change.Temitayo Olarewaju, PhD Candidate, Peter A. Allard School of Law, University of British ColumbiaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1911462022-09-21T23:58:48Z2022-09-21T23:58:48ZNew York’s $250 million lawsuit against Donald Trump is the beginning, not end, of this case – a tax lawyer explains what’s at stake<figure><img src="https://images.theconversation.com/files/485999/original/file-20220921-23-khyuk0.jpg?ixlib=rb-1.1.0&rect=231%2C378%2C6783%2C4196&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">New York Attorney General Letitia James announced a $250 million lawsuit against former president Donald Trump on Sept. 21, 2022 .</span> <span class="attribution"><a class="source" href="https://media.gettyimages.com/photos/attorney-general-letitia-james-speaks-during-a-press-conference-at-picture-id1425941143">Michael M. Santiago/Getty Images </a></span></figcaption></figure><p><em>New York Attorney General Letitia James hit former president Donald Trump with a <a href="https://www.nytimes.com/live/2022/09/21/nyregion/trump-fraud-lawsuit-ny-james">US$250 million lawsuit</a> on Sept. 21, 2022, citing “staggering” amounts of falsified business information and fraud.</em></p>
<p><em>The civil lawsuit alleges that Trump, his company – the <a href="https://www.trump.com">Trump Organization</a> – and three of his children lied to lenders and insurers about billions of dollars’ worth of assets. This follows a <a href="https://www.vanityfair.com/news/2022/08/letitia-jamess-trump-investigation-is-nearing-its-endgame">three-year investigation </a> into Trump’s New York-based real estate business.</em></p>
<p><em>The Conversation spoke with <a href="https://scholar.google.com/citations?user=iGSWDoAAAAAJ&hl=en&oi=ao">Bridget J. Crawford,</a> an expert on tax and property law at Pace University, to help navigate the various dimensions and the potentially broader, criminal implications of this lawsuit.</em></p>
<h2>What are Trump and his children accused of in the lawsuit?</h2>
<p>The complaint is over <a href="https://ag.ny.gov/press-release/2022/attorney-general-james-sues-donald-trump-years-financial-fraud">200 pages long</a> and contains many specific claims. But, at its heart, the complaint says the Trump Organization made false financial or business statements in order to get loans or to keep those loans on favorable terms, in a way that was dishonest or fraudulent. </p>
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<img alt="Vehicles pass the Trump Park Avenue building on a sunny day." src="https://images.theconversation.com/files/485984/original/file-20220921-24-c6n5wh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/485984/original/file-20220921-24-c6n5wh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/485984/original/file-20220921-24-c6n5wh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/485984/original/file-20220921-24-c6n5wh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/485984/original/file-20220921-24-c6n5wh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/485984/original/file-20220921-24-c6n5wh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/485984/original/file-20220921-24-c6n5wh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Trump Park Avenue – just how much is it worth?</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/TrumpLegalTroubles/a2f0eeeced6e4692ad28139ee0bfbf37/photo?Query=Trump%20Park%20Avenue&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=29&currentItemNo=0">AP Photo/Frank Franklin II</a></span>
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<p>Trump didn’t allegedly overestimate the cost of buildings, which is a technical term, but rather he is accused of inflating the value of certain businesses and properties. </p>
<h2>How does overstating the value of properties help Trump?</h2>
<p>Banks want to make loans to people who are likely to be able to repay them. And how does the bank measure whether someone is likely to repay? It’s knowing the recipient of a loan has enough collateral to satisfy the bank’s concerns. Trump said he had collateral worth a certain amount. James is saying that the values are really wrong, and really wrong over a period of years, in multiple different filings. Moreover, the lawsuit says this is not just a mistake, or an, ‘Oops I got it wrong.’ Rather, the attorney general alleges a systematic pattern of fraud. </p>
<h2>What should we make of this being a civil, not criminal, action?</h2>
<p>James is bringing a lawsuit regarding the Trump Organization’s compliance with <a href="https://www.nysenate.gov/legislation/laws/CVP">New York’s civil laws</a>, meaning business and lending laws and the like – hence it is a civil suit. </p>
<p>That said, James made clear that she has also referred certain matters to both the IRS and to the federal prosecutors in the Southern District of New York for criminal investigation.</p>
<p>So this being a civil lawsuit does not mean we won’t potentially see criminal charges further down the line. Just, at this point, the New York attorney general is focused on the civil law violations. </p>
<p>In other words, this could be just the beginning of a longer story. </p>
<h2>What does the lawsuit demand in way of relief?</h2>
<p>This is where it gets interesting, I believe. James is calling for very dramatic relief, including permanently preventing Trump, along with three of his children – Donald Trump Jr., Eric Trump and Ivanka Trump – from serving as a director or officer of any corporation conducting business activities in New York. It could preclude them from having any formal business ties in New York. This would be a severe blow to the family’s business interests.</p>
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<span class="caption">Former president Donald Trump and four of his children are seen at Ivana Trump’s funeral in July 2022 in New York.</span>
<span class="attribution"><a class="source" href="https://media.gettyimages.com/photos/donald-trump-melania-trump-barron-trump-jared-kushner-kimberly-picture-id1242030390">Jose Perez/Bauer-Griffin/GC Images</a></span>
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<h2>How would an IRS investigation differ from the New York one?</h2>
<p>It would be about federal tax laws, in particular. <a href="https://www.irs.gov/compliance/criminal-investigation">The IRS will</a> be looking for an answer to this question: “Did Trump overstate the valuation of any property he gave to charity?” The New York attorney general is concerned that he did.</p>
<p>The possible overvaluation relates to two different properties in Westchester, a county outside of New York City, and in Florida. What is at issue for the IRS is whether Trump correctly claimed the proper deduction, or whether he overstated, in a fraudulent way, the value of what he gave to charity. An overstatement of what he gave away would mean that the former president took a bigger income tax deduction than the one he was entitled to. Again, this is not just a matter of, “Oops, I made a mistake.” The attorney general alleges a widespread and longstanding pattern of misrepresentation of business values.</p>
<p>By handing this part of the investigation over to the IRS, the New York attorney general is signaling that she intends to stay in her lane, so to speak. James is basically saying, “I am talking about fair business practices in New York. If there is a tax issue, I am referring it over to the IRS.”</p>
<p>But all of the issues grow out of the same core set of facts and practices – how is the Trump family valuing its businesses and properties, and is it being done in a way that is honest?</p>
<h2>Does the lawsuit increase the chances of criminal charges?</h2>
<p>It certainly increases the possibility there might be criminal charges in the future. It also fans the flames that Trump continues to stoke in claiming that he is being unfairly targeted, which appears to be part of his attempt to discredit the American legal system. In fact, he is being asked to play by the same rules that apply to everyone else.</p>
<p>I will be very interested to see whether and how the IRS responds – the IRS strives to be an apolitical organization, but unfortunately, anything involving this particular former president is treated by a vocal minority as inherently political. </p>
<h2>How common is it for this type of lawsuit to happen?</h2>
<p>It is very unusual. There would have had to be evidence of an egregious pattern of fraud for any attorney general, of any political party, to file a complaint of this sort. In fact, the whole investigation, from the length of time it has taken to the amount of money involved, makes this a very uncommon case.</p>
<h2>What happens next?</h2>
<p>The New York attorney general has asked for a variety of actions, including the removal of the current trustees of certain trusts holding Trump Organization assets.</p>
<p>Trump has already responded, calling it <a href="https://www.nydailynews.com/news/politics/us-elections-government/ny-trump-fraud-allegations-ag-letitia-james-lawsuit-gop-reactions-20220921-i6324ukflfei3bd5zhlnv5jdny-story.html">a witch hunt</a>, which is consistent with the way he has responded to lawsuits in the past. I expect he will employ any available procedural tactics to delay answering this suit as long as he can. Eventually, he will be called to respond, and he will have to answer the claims put to him.</p>
<p>If he refuses to respond, the attorney general can act to protect the public, and the Trump family businesses would not be authorized to operate in New York. Ultimately, the state can shut the businesses down, if need be.</p><img src="https://counter.theconversation.com/content/191146/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bridget J. Crawford does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>New York’s lawsuit against Trump could mean he and three of his kids are prevented from operating a business again in the state – but the IRS will determine whether federal tax crimes also took place.Bridget J. Crawford, Professor of Law, Pace University Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1887862022-08-18T17:23:54Z2022-08-18T17:23:54ZWill the Inflation Reduction Act actually reduce inflation? How will the corporate minimum tax work? An economist has answers<figure><img src="https://images.theconversation.com/files/479917/original/file-20220818-6276-9qt389.jpg?ixlib=rb-1.1.0&rect=152%2C58%2C2842%2C1782&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Don't expect the Inflation Reduction Act to bring down prices all that much.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/ProducerPrices/e52f9db68a144f2e9822d8c2f0f06925/photo?Query=prices&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=51911&currentItemNo=52">AP Photo/David Zalubowski</a></span></figcaption></figure><p><em>The U.S. is about to <a href="https://www.nytimes.com/interactive/2022/08/13/upshot/whats-in-the-democrats-climate-health-bill.html">spend US$490 billion over 10 years</a> on reducing greenhouse gas emissions, improving health care and reducing the federal deficit. Where’s all that money coming from?</em></p>
<p><em>We asked University of Michigan economist <a href="https://www.nirupamarao.org">Nirupama Rao</a> to examine how the new law will raise enough revenue to pay for clean energy tax credits, Affordable Care Act subsidies and incentives for manufacturers to use cleaner technologies, among other initiatives. We also wanted to know, given its name, will the Inflation Reduction Act actually bring down inflation?</em></p>
<h2>What are the main revenue components in the bill?</h2>
<p>The new law funds itself primarily <a href="https://www.nytimes.com/interactive/2022/08/13/upshot/whats-in-the-democrats-climate-health-bill.html">through a mixture of tax-related measures and health care savings</a>. In fact, the revenue it’s projected to raise more than pays for the new spending, reducing the deficit by roughly a quarter of a trillion dollars over 10 years.</p>
<p>The biggest source of revenue, <a href="https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_one_page_summary.pdf">projected by the Joint Committee on Taxation</a> at about $222 billion, comes from a new 15% minimum corporate tax rate. Another $124 billion in net revenue is expected as a result of stepped-up tax enforcement by the Internal Revenue Service. The committee expects two other tax measures – including a 1% tax on corporate stock buybacks – would raise about $126 billion.</p>
<p>Congress is also hoping to save $265 billion through several provisions to <a href="https://theconversation.com/why-letting-medicare-negotiate-drug-prices-wont-be-the-game-changer-for-health-care-democrats-hope-it-will-be-188560?notice=Article+has+been+updated.">lower the amount of money the government spends</a> on prescription drugs through its Medicare program. </p>
<h2>How will the corporate minimum tax work?</h2>
<p>The corporate minimum tax is aimed at raising revenue from companies that report large profits to their shareholders but pay minimal taxes. </p>
<p>Though businesses can, of course, owe no tax because of perfectly legitimate uses of the tax code, seeing headlines about <a href="https://www.washingtonpost.com/business/2022/08/11/minimum-corporate-tax">successful companies</a> paying little to no tax <a href="https://www.pewresearch.org/fact-tank/2021/04/30/top-tax-frustrations-for-americans-the-feeling-that-some-corporations-wealthy-people-dont-pay-fair-share/">has been galling</a> to many Americans and can potentially undermine the public’s faith in the tax system. </p>
<p>In addition, government revenue from companies <a href="https://www.taxpolicycenter.org/statistics/corporate-income-tax-revenue-share-gdp-1934-2020">has plunged in recent years</a> as a result of the 2017 corporate tax cut and other measures. Corporate tax revenue fell by nearly half as a share of gross domestic product from 2015 to 2020. </p>
<p><iframe id="joM7r" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/joM7r/4/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>To be subject to the minimum tax, U.S. corporations must earn an average of at least $1 billion in adjusted book income – the earnings they report to shareholders less some adjustments – over the previous three years. It hits foreign companies too, though they need only report $100 million in U.S. income. </p>
<p>Basically, companies subject to the minimum will have to calculate their tax liability twice – once under regular corporate income tax rules and again by multiplying their adjusted book income by 15%. Their tax is whichever is greater. Theoretically, this ensures they at least pay the minimum.</p>
<p>A few important adjustments included in the bill’s final language will limit how much companies pay under the minimum tax. To prevent manufacturers from facing high minimum tax bills, for example, <a href="https://www.taxpolicycenter.org/taxvox/how-senate-approved-corporate-minimum-tax-works">companies will be able to employ</a> some of the same credits and deductions they use to reduce their regular corporate tax bills to lower the minimum tax they’ll pay as well. </p>
<p>While an earlier vision of the bill would have subjected private equity funds to the minimum tax, <a href="https://www.nytimes.com/2022/08/08/business/corporate-minimum-tax-private-equity.html">intense lobbying</a> of Arizona Sen. Kyrsten Sinema helped the industry get an exemption, along with retaining the carried interest loophole that the bill initially closed.</p>
<p>In the end, <a href="https://www.finance.senate.gov/imo/media/doc/CAMT%20JCT%20Data.pdf">fewer than 150 companies</a> – including many household names like <a href="https://www.washingtonpost.com/business/2022/08/11/minimum-corporate-tax/">Amazon, AT&T and General Motors</a> – are expected to be subject to the tax. </p>
<figure class="align-center ">
<img alt="A sign reads Internal Revenue Service in front of a large stone building" src="https://images.theconversation.com/files/479918/original/file-20220818-459-zgp5vk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/479918/original/file-20220818-459-zgp5vk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=347&fit=crop&dpr=1 600w, https://images.theconversation.com/files/479918/original/file-20220818-459-zgp5vk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=347&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/479918/original/file-20220818-459-zgp5vk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=347&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/479918/original/file-20220818-459-zgp5vk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=436&fit=crop&dpr=1 754w, https://images.theconversation.com/files/479918/original/file-20220818-459-zgp5vk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=436&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/479918/original/file-20220818-459-zgp5vk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=436&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The IRS gets a big boost in funding from the new law, which should help it beef up enforcement and bring in more revenue.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/Corporations-ZeroTaxes/960af7fa6f804aa3acc39d119caf450d/photo?Query=company%20tax%20profits&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=236&currentItemNo=11">AP Photo/J. David Ake</a></span>
</figcaption>
</figure>
<h2>How will IRS enforcement generate so much revenue?</h2>
<p>The law allots $80 billion in new funding for the Internal Revenue Service. The Joint Committee on Taxation expects the investment to <a href="https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_one_page_summary.pdf">garner $204 billion in revenue over 10 years</a>, or $124 billion once you subtract the increased spending. </p>
<p>The main target of this spending is the so-called tax gap, which is currently <a href="https://home.treasury.gov/news/featured-stories/the-case-for-a-robust-attack-on-the-tax-gap">estimated at about $600 billion a year</a>. The tax gap is the difference between how much corporate or individual taxpayers owe the IRS and how much the agency is able to collect. </p>
<p>The new revenue is expected to come from increased auditing, mostly targeting high-income taxpayers. <a href="https://home.treasury.gov/system/files/136/JLY-letter-to-Commissioner-Rettig-Signed.pdf">Treasury Secretary Janet Yellen</a> and <a href="https://www.irs.gov/pub/irs-utl/commissioners-letter-to-the-senate.pdf">IRS Commissioner Charles Rettig</a> have both pledged that the investments will not lift audit rates on small businesses and households earning less than $400,000 a year.</p>
<p>Many Democrats, along with former <a href="https://www.washingtonpost.com/opinions/2021/11/17/cbo-build-back-better-irs-revenue-too-low/">Treasury Secretary Larry Summers</a>, believe this investment in the IRS will raise a lot more money than estimated because of <a href="http://jasondebacker.com/papers/DHTY_IndivAudit.pdf">better compliance</a> among taxpayers who want to avoid being audited. </p>
<p>The funding will also be used to update <a href="https://www.nextgov.com/it-modernization/2018/03/irs-system-processing-your-taxes-almost-60-years-old/146770/">antiquated technology</a> and increase the IRS’s staff. Decades-old computer systems and understaffing <a href="https://www.taxpayeradvocate.irs.gov/reports/2021-annual-report-to-congress/">prevent the IRS from answering taxpayer queries</a>, tracking funds owed and using simple analytics to guide enforcement. </p>
<p>While an $80 billion investment that returns $204 billion already sounds pretty impressive, it may be possible that it’s a conservative estimate. </p>
<h2>Will the law reduce inflation, as the name implies?</h2>
<p>Probably not much.</p>
<p>Several measures in the law, such as narrowing the deficit, lowering drug prices and making the U.S. less vulnerable to energy price spikes, should all help reduce inflation somewhat. </p>
<p>Though monetary policy is the main tool for fighting inflation, it’s also possible that the new law will convince people that Congress is functional and willing to take steps to address inflation, and that feeling <a href="https://twitter.com/WendyEdelberg/status/1555256251369635841">could lead to lower expectations</a> for future inflation, which can be a self-fulfilling prophesy. </p>
<p>However, the magnitude of the direct impact on inflation, despite the bill’s name, will likely be slight. The <a href="https://budgetmodel.wharton.upenn.edu/issues/2022/8/12/senate-passed-inflation-reduction-act">Penn-Wharton Budget Model</a>, which publishes economic analysis on the fiscal impact of public policy, suggests that the reduction in inflation of the Inflation Reduction Act “will be statistically indistinguishable from zero.” </p>
<p>That’s an economist’s way of saying, when it comes to the bill’s impact on inflation, don’t get your hopes up too much.</p><img src="https://counter.theconversation.com/content/188786/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nirupama Rao has received research support from the Center for Equitable Growth.</span></em></p>The new law will pay for increased spending in several ways, including a corporate minimum tax and funding tax code enforcement by the IRS.Nirupama Rao, Assistant Professor of Business Economics and Public Policy, University of MichiganLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1886312022-08-15T18:09:40Z2022-08-15T18:09:40ZGOP ‘message laundering’ turns violent, extremist reactions to search of Trump’s Mar-a-Lago into acceptable political talking points<figure><img src="https://images.theconversation.com/files/479151/original/file-20220815-19-n7qmyu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Supporters of former President Donald Trump rally in Bedminster, N.J., on Aug. 14, 2022. </span> <span class="attribution"><a class="source" href="https://media.gettyimages.com/photos/supporters-of-former-president-of-the-united-states-donald-j-trump-picture-id1242508358?s=2048x2048">Kyle Mazza/Andalou Agency via Getty Images </a></span></figcaption></figure><p>After the FBI <a href="https://www.washingtonpost.com/national-security/2022/08/13/trump-mar-a-lago-search/">completed a lawful search</a> of former president Donald Trump’s Mar-a-Lago estate on Aug. 8, 2022, conservative politicians responded with one of three strategies: <a href="https://cowboystatedaily.com/2022/08/10/wyoming-reacts-to-fbis-raid-on-trump-estate-cheney-goes-silent/">silence</a>, <a href="https://thehill.com/policy/national-security/3595121-mcconnell-calls-for-thorough-and-immediate-explanation-of-mar-a-lago-raid/">circumspection</a> and <a href="https://www.nbcnews.com/politics/donald-trump/republicans-lash-justice-department-fbi-searches-trumps-mar-lago-home-rcna42139">attack</a>.</p>
<p>Many responses echoed Trump’s own framing of the search. In his <a href="https://saveamerica.nucleusemail.com/amplify/v/XeHZxcJVhW">Aug. 8 message he claimed</a> his residence was “under siege, raided, and occupied by a large group of FBI agents.” In the statement, replete with war metaphors, Trump alleged that executing a legal warrant was “the weaponization of the Justice System” and an “assault” that “could only take place in broken, Third-World Countries.”</p>
<p>Trump’s framing of the event was <a href="https://www.washingtonpost.com/politics/2022/08/08/trump-fbi-search-reaction/">quickly echoed by most Republican politicians</a> commenting immediately on Twitter, despite the fact that they, like Democrats and the public, lacked relevant knowledge of the facts of the case that prompted the search and <a href="https://www.washingtonpost.com/national-security/2022/08/12/trump-warrant-release/">seizure of classified documents</a>. </p>
<p>The impulse to hastily legitimize Trump’s perspective illustrates a dangerous rhetorical strategy frequently employed by GOP politicians during the Trump era: <a href="https://ncpolicywatch.com/2021/05/24/message-laundering-how-the-far-right-is-getting-its-dirty-work-done-at-unc/">message laundering</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/479149/original/file-20220815-19-l6mly9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A white man in a blue suit stands on a stage with the words 'Governor De Santis' lit up behind him. He throws a hat into an audience of people." src="https://images.theconversation.com/files/479149/original/file-20220815-19-l6mly9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/479149/original/file-20220815-19-l6mly9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=434&fit=crop&dpr=1 600w, https://images.theconversation.com/files/479149/original/file-20220815-19-l6mly9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=434&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/479149/original/file-20220815-19-l6mly9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=434&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/479149/original/file-20220815-19-l6mly9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=546&fit=crop&dpr=1 754w, https://images.theconversation.com/files/479149/original/file-20220815-19-l6mly9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=546&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/479149/original/file-20220815-19-l6mly9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=546&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Florida Gov. Ron DeSantis speaks at a conservative student summit in Tampa on July 22, 2022.</span>
<span class="attribution"><a class="source" href="https://media.gettyimages.com/photos/florida-gov-ron-desantis-tosses-hats-into-the-audience-as-he-takes-picture-id1410363357?s=2048x2048">Joe Raedle/Getty Images</a></span>
</figcaption>
</figure>
<h2>Conditioned to accept violence</h2>
<p>Message laundering occurs when inflammatory language and/or unsubstantiated claims are mixed with mainstream partisan communication and presented to the public with an air of respectability. Just as <a href="https://medium.com/@alacergroup/from-the-laundromat-to-wall-street-a-history-of-money-laundering-c6a5407e785c">money laundering</a> enabled mobsters to disguise their ill-gotten gain as the profits of a legitimate business, message laundering presents dishonest and dangerous speech as credible, innocuous or persuasive.</p>
<p>As a <a href="https://www.libarts.colostate.edu/people/karrin/">political communication scholar</a>, I study how rhetoric strengthens or erodes democratic institutions. The aftermath of the FBI’s Mar-a-Lago search illustrates how message laundering can undermine democratic processes and gradually condition its audience to expect and accept violence.</p>
<p>After Trump released his statement, conservative politicians echoed key aspects of his message. Some sanitized Trump’s ideas by combining them with more measured critique or references to democratic processes. </p>
<p>House Minority Leader Kevin McCarthy, R-Calif., <a href="https://twitter.com/GOPLeader/status/1556807790433271809">decried</a> an “intolerable state of weaponized politicization” in the Justice Department, even as he promised to “follow the facts” and “leave no stone unturned” if the GOP retook the House. <a href="https://www.sfgate.com/politics/article/Democrats-slam-McCarthy-over-response-to-FBI-raid-17362251.php">Democrats</a> interpreted his directive to Attorney General Merrick Garland, “preserve your documents and clear your calendar,” <a href="https://thehill.com/policy/national-security/3593582-mccarthy-threatens-to-probe-garland-after-trump-fbi-raid/">as a threat</a>. But the tweet launders Trump’s notion of a weaponized Justice Department by combining it with McCarthy’s promise to use democratic processes to “follow the facts.”</p>
<figure class="align-center ">
<img alt="Tweet from Kevin McCarthy" src="https://images.theconversation.com/files/479046/original/file-20220814-41084-g64qfl.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/479046/original/file-20220814-41084-g64qfl.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=787&fit=crop&dpr=1 600w, https://images.theconversation.com/files/479046/original/file-20220814-41084-g64qfl.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=787&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/479046/original/file-20220814-41084-g64qfl.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=787&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/479046/original/file-20220814-41084-g64qfl.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=989&fit=crop&dpr=1 754w, https://images.theconversation.com/files/479046/original/file-20220814-41084-g64qfl.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=989&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/479046/original/file-20220814-41084-g64qfl.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=989&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Twitter.com</span></span>
</figcaption>
</figure>
<p>Similarly, South Dakota Gov. Kristi Noem recycled Trump’s war metaphors in <a href="https://twitter.com/KristiNoem/status/1556793510229065728">her tweet</a>, saying, “The FBI raid on President Trump’s home is an unprecedented political weaponization of the Justice Department.” She tempered that imagery, however, by appealing to the rule of law in the same tweet, asserting that “using the criminal justice system in this manner is un-American.”</p>
<p>Not all of the GOP’s early statements were measured, however. Some laundered more extreme ideas and edged readers toward an acceptance of violence.</p>
<p>In a <a href="https://twitter.com/RonDeSantisFL/status/1556803433939755010?ref_src=twsrc%5Etfw">tweet</a> sent the night of the search, Florida Gov. Ron DeSantis labeled the search a “raid” and described it as “another escalation in the weaponization of federal agencies against the Regime’s political opponents.” He continued, saying, “Now the Regime is getting another 87k IRS agents to wield against its adversaries? Banana Republic.”</p>
<p>DeSantis’ invocation of “the Regime” legitimizes a fringe <a href="https://compactmag.com/article/they-can-t-let-him-back-in">notion peddled</a> by Michael Anton, a right-wing commentator and member of Trump’s administration. Anton speculates that Democratic elected officials would work in concert with members of the Biden administration, liberal judges and the media – who, together, form “the regime” – to prevent Trump from taking office again using legal or illegal means. </p>
<p>DeSantis referenced a <a href="https://www.forbes.com/sites/robertwood/2022/08/11/irs-to-add-87000-new-agents-more-crypto-tax-enforcement/?sh=7c1de1963213">budgetary item included in the Democrats’ Inflation Reduction Act</a> that would allocate “$80 billion to the IRS.”</p>
<p>McCarthy also referred to that aspect of the bill, <a href="https://twitter.com/GOPLeader/status/1557088624499429377?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1557088624499429377%7Ctwgr%5E6d810e9beb50025f698719555b690d1a69a69cec%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.politifact.com%2Ffactchecks%2F2022%2Faug%2F11%2Fkevin-mccarthy%2Fkevin-mccarthys-mostly-false-claim-about-army-8700%2F">alleging</a> a “new army of 87,000 IRS agents” are “coming for” American taxpayers. <a href="https://www.politifact.com/factchecks/2022/aug/11/kevin-mccarthy/kevin-mccarthys-mostly-false-claim-about-army-8700/">Politifact</a> and <a href="https://www.washingtonpost.com/politics/2022/08/11/hyperbolic-gop-claims-about-irs-agents-audits/">The Washington Post</a> debunked the notion. Yet Republicans <a href="https://thehill.com/policy/3594879-gop-rails-against-irs-funding-in-inflation-reduction-act/">repeatedly made that argument</a>.</p>
<h2>‘Gestapo’ and ‘brown shirts’</h2>
<p>The imagery of an “army” of federal agents turned against ordinary Americans via legislative mandate legitimized the alarmist rhetoric that followed. As GOP tweets coalesced, the line item from the Inflation Reduction Act merged with reports of the Mar-a-Lago search in ways designed to make individual voters feel vulnerable.</p>
<p>Rep. Andrew Clyde, R-Ga., <a href="https://twitter.com/Rep_Clyde/status/1557054031125778433">tweeted</a>, “If they weaponize the FBI to go after President Trump, they will surely weaponize the IRS’s 87,000 new agents to go after you.” </p>
<p>The GOP members of the House Judiciary Committee <a href="https://twitter.com/JudiciaryGOP/status/1556791214875328515">tweeted</a>, “If they can do it to a former President, imagine what they can do to you.” Rep. Lauren Boebert, R-Colo., <a href="https://twitter.com/laurenboebert/status/1556845893332205569">tweeted</a>, “This #DepartmentofInjustice must be held accountable. It was President Trump today, but it’s you next if we don’t take a stand.”</p>
<figure class="align-center ">
<img alt="Tweet from Rep. Lauren Boebert" src="https://images.theconversation.com/files/479047/original/file-20220814-59179-whppmy.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/479047/original/file-20220814-59179-whppmy.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=624&fit=crop&dpr=1 600w, https://images.theconversation.com/files/479047/original/file-20220814-59179-whppmy.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=624&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/479047/original/file-20220814-59179-whppmy.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=624&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/479047/original/file-20220814-59179-whppmy.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=784&fit=crop&dpr=1 754w, https://images.theconversation.com/files/479047/original/file-20220814-59179-whppmy.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=784&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/479047/original/file-20220814-59179-whppmy.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=784&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Twitter.com</span></span>
</figcaption>
</figure>
<p>After making audiences feel personally threatened, GOP messaging returned to the war posture implied in Trump’s original statement. </p>
<p>Rep. Marjorie Taylor Greene, R-Ga., <a href="https://twitter.com/RepMTG/status/1556783786976845824">tweeted</a> that the FBI “raiding President Trump’s home” was the “type of things that happen in countries during civil war.” Conservative pundits and politicians cast FBI agents as “<a href="https://twitter.com/jacobkornbluh/status/1556806316445802502">Gestapo</a>” and “<a href="https://twitter.com/DrPaulGosar/status/1556790609213546496">brown shirts</a>,” the latter referring to Hitler’s storm troopers. In an interview on Fox News, Sen. Rick Scott, R-Fla., <a href="https://twitter.com/atrupar/status/1556990717951713280">exclaimed</a>, “This should scare the living daylights out of America citizens” and compared the U.S. federal government to the Nazis, the Soviet Union and Latin American dictatorships.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/479144/original/file-20220815-13-g4bf10.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A tweet that says 'Tomorrow is war. Sleep well.'" src="https://images.theconversation.com/files/479144/original/file-20220815-13-g4bf10.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/479144/original/file-20220815-13-g4bf10.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=299&fit=crop&dpr=1 600w, https://images.theconversation.com/files/479144/original/file-20220815-13-g4bf10.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=299&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/479144/original/file-20220815-13-g4bf10.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=299&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/479144/original/file-20220815-13-g4bf10.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=376&fit=crop&dpr=1 754w, https://images.theconversation.com/files/479144/original/file-20220815-13-g4bf10.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=376&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/479144/original/file-20220815-13-g4bf10.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=376&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A tweet sent by a conservative commentator on the evening of the day former President Trump announced the FBI had searched his Florida home.</span>
<span class="attribution"><a class="source" href="https://twitter.com/scrowder/status/1556830994354905094?s=20&t=ItwCMIgFWMy9VQfb8V_gcQ">Twitter</a></span>
</figcaption>
</figure>
<h2>What’s next, #CivilWar?</h2>
<p><a href="https://www.jstor.org/stable/41939743">Communication scholars</a> have <a href="https://books.google.com/books/about/Demagoguery_and_Democracy.html?id=61ZeDgAAQBAJ">observed</a> that once political opponents are cast in those terms, democratic remedies are insufficient. The opponent must be destroyed, and violent repercussions seem reasonable. </p>
<p>A Bloomberg newsletter <a href="https://www.bloomberg.com/news/newsletters/2022-08-10/fbi-raid-at-mar-a-lago-quickly-sparks-social-media-narratives">noted</a> that during the week of Aug. 8, the #CivilWar hashtag gained traction on various platforms, reflecting a “war-time mentality (that) has become increasingly common since it’s started to find footing with politicians.” </p>
<p>The Texas Nationalist Movement issued <a href="https://tnm.me/news/tnm-news/statement-on-the-federal-raid-of-the-trump-residence/">a statement</a> citing the “raid” on Mar-a-Lago, the “weaponization and politicization of federal instruments of power” and the “announcement of the hiring of 87,000 IRS agents” as grounds for Texas to secede. </p>
<p>During the week that followed the Mar-a-Lago search, FBI <a href="https://www.washingtonpost.com/politics/2022/08/12/fbi-threats-trump-search/">officials reported</a> numerous instances of individuals threatening FBI field offices, with some confrontations ending in violence. On Aug. 12, the FBI and the Department of Homeland Security released a <a href="https://www.nbcnews.com/politics/politics-news/fbi-dhs-warn-threats-federal-law-enforcement-spiked-wake-mar-lago-sear-rcna43024">joint bulletin</a> documenting an increase in violent threats to law enforcement and other government officials.</p>
<p>Message laundering does not always result in politically motivated violence, but it can make violence seem like a logical and reasonable response to partisan disagreement. Voters should be aware of this rhetorical tactic.</p><img src="https://counter.theconversation.com/content/188631/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Karrin Vasby Anderson does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Threats to law enforcement have risen in the aftermath of the FBI raid on former President Trump’s Florida estate. Does ‘message laundering’ by top GOP figures have something to do with it?Karrin Vasby Anderson, Professor of Communication Studies, Colorado State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1758172022-02-01T13:16:12Z2022-02-01T13:16:12ZGovernment agencies are tapping a facial recognition company to prove you’re you – here’s why that raises concerns about privacy, accuracy and fairness<figure><img src="https://images.theconversation.com/files/443239/original/file-20220128-19-ghy893.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C8000%2C5317&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Beginning this summer, you might need to upload a selfie and a photo ID to a private company, ID.me, if you want to file your taxes online.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/young-woman-using-smartphone-while-working-with-royalty-free-image/1224140562">Oscar Wong/Moment via Getty Images</a></span></figcaption></figure><p>The U.S. Internal Revenue Service is planning to <a href="https://www.irs.gov/newsroom/irs-unveils-new-online-identity-verification-process-for-accessing-self-help-tools">require citizens to create accounts</a> with a private facial recognition company in order to file taxes online. The IRS is joining a growing number of federal and state agencies that have contracted with <a href="https://www.id.me/">ID.me</a> to authenticate the identities of people accessing services.</p>
<p>The IRS’s move is aimed at cutting down on identity theft, a crime that <a href="https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2020/csn_annual_data_book_2020.pdf">affects millions of Americans</a>. The IRS, in particular, has reported a number of tax filings from people claiming to be others, and <a href="https://www.cnbc.com/2021/12/21/criminals-have-stolen-nearly-100-billion-in-covid-relief-funds-secret-service.html">fraud in many of the programs</a> that were administered as part of the <a href="https://www.whitehouse.gov/american-rescue-plan/">American Relief Plan</a> has been a major concern to the government.</p>
<p>The IRS decision has prompted a backlash, in part over concerns about requiring citizens to use facial recognition technology and in part over difficulties some people have had in using the system, particularly with some state agencies that provide unemployment benefits. The reaction has prompted the IRS to <a href="https://www.bloomberg.com/news/articles/2022-01-28/treasury-weighing-id-me-alternatives-over-privacy-concerns?sref=Hjm5biAW">revisit its decision</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/443053/original/file-20220127-9782-2f0nex.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="a webpage with the IRS logo in the top left corner and buttons for creating or logging into an account" src="https://images.theconversation.com/files/443053/original/file-20220127-9782-2f0nex.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/443053/original/file-20220127-9782-2f0nex.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=309&fit=crop&dpr=1 600w, https://images.theconversation.com/files/443053/original/file-20220127-9782-2f0nex.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=309&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/443053/original/file-20220127-9782-2f0nex.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=309&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/443053/original/file-20220127-9782-2f0nex.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=388&fit=crop&dpr=1 754w, https://images.theconversation.com/files/443053/original/file-20220127-9782-2f0nex.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=388&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/443053/original/file-20220127-9782-2f0nex.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=388&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Here’s what greets you when you click the link to sign into your IRS account. If current plans remain in place, the blue button will go away in the summer of 2022.</span>
<span class="attribution"><a class="source" href="https://sa.www4.irs.gov/secureaccess/ui/?TYPE=33554433&REALMOID=06-0006b18e-628e-1187-a229-7c2b0ad00000&GUID=&SMAUTHREASON=0&METHOD=GET&SMAGENTNAME=-SM-u0ktItgVFneUJDzkQ7tjvLYXyclDooCJJ7%2bjXGjg3YC5id2x9riHE98hoVgd1BBv&TARGET=-SM-http%3a%2f%2fsa%2ewww4%2eirs%2egov%2fola%2f">Screenshot, IRS sign-in webpage</a></span>
</figcaption>
</figure>
<p>As a <a href="https://scholar.google.com/citations?user=JNPbTdIAAAAJ&hl=en">computer science researcher</a> and the chair of the <a href="https://www.acm.org/public-policy/tpc">Global Technology Policy Council of the Association for Computing Machinery</a>, I have been involved in exploring some of the issues with government use of facial recognition technology, both its use and its potential flaws. There have been a great number of concerns raised over the general <a href="https://theconversation.com/feds-are-increasing-use-of-facial-recognition-systems-despite-calls-for-a-moratorium-145913">use of this technology in policing and other government functions</a>, often focused on whether the accuracy of these algorithms can have discriminatory affects. In the case of ID.me, there are other issues involved as well.</p>
<h2>ID dot who?</h2>
<p>ID.me is a private company that <a href="https://www.bloomberg.com/news/features/2022-01-20/cybersecurity-company-id-me-is-becoming-government-s-digital-gatekeeper?sref=Hjm5biAW">formed as TroopSwap</a>, a site that offered retail discounts to members of the armed forces. As part of that effort, the company created an ID service so that military staff who qualified for discounts at various companies could prove they were, indeed, service members. In 2013, the company renamed itself ID.me and started to market its ID service more broadly. The U.S. Department of Veterans Affairs began using the technology in 2016, the company’s first government use.</p>
<p>To use ID.me, a user loads a mobile phone app and takes a selfie – a photo of their own face. ID.me then compares that image to various IDs that it obtains either through open records or through information that applicants provide through the app. If it finds a match, it creates an account and uses image recognition for ID. If it cannot perform a match, users can contact a “trusted referee” and have a video call to fix the problem.</p>
<p>A number of companies and <a href="https://www.usnews.com/news/technology/articles/2021-07-22/factbox-states-using-idme-rival-identity-check-tools-for-jobless-claims">states</a> have been using ID.me for several years. News reports have documented <a href="https://www.cpr.org/2021/05/10/unemployment-payouts-have-dropped-40-percent-is-id-me-stopping-scams-or-blocking-benefits/">problems people have had with ID.me</a> failing to authenticate them, and with the company’s customer support in resolving those problems. Also, the system’s technology requirements <a href="https://www.usnews.com/news/best-states/colorado/articles/2021-05-02/system-for-unemployment-benefits-exposes-digital-divide">could widen the digital divide</a>, making it harder for many of the people who need government services the most to access them. </p>
<p>But much of the concern about the IRS and other federal agencies using ID.me revolves around its use of facial recognition technology and collection of biometric data.</p>
<h2>Accuracy and bias</h2>
<p>To start with, there are a number of general concerns about the accuracy of facial recognition technologies and whether there are <a href="https://theconversation.com/ai-technologies-like-police-facial-recognition-discriminate-against-people-of-colour-143227">discriminatory biases</a> in their accuracy. These have led the Association for Computing Machinery, among other organizations, to <a href="https://theconversation.com/feds-are-increasing-use-of-facial-recognition-systems-despite-calls-for-a-moratorium-145913">call for a moratorium on government use</a> of facial recognition technology. </p>
<p>A study of commercial and academic facial recognition algorithms by the National Institute of Standards and Technology found that U.S. facial-matching algorithms generally have <a href="https://www.nist.gov/news-events/news/2019/12/nist-study-evaluates-effects-race-age-sex-face-recognition-software">higher false positive rates for Asian and Black faces</a> than for white faces, although recent results have improved. ID.me claims that there is <a href="https://insights.id.me/viewpoint/no-identity-left-behind-american-increased-access-online-services/">no racial bias</a> in its face-matching verification process. </p>
<p>There are many other conditions that can also cause inaccuracy – physical changes caused by illness or an accident, hair loss due to chemotherapy, color change due to aging, gender conversions and others. How any company, including ID.me, handles such situations is unclear, and this is one issue that has raised concerns. Imagine having a disfiguring accident and not being able to log into your medical insurance company’s website because of damage to your face.</p>
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<iframe width="440" height="260" src="https://www.youtube.com/embed/BqQT4sIOYA0?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Facial recognition technology is spreading fast. Is the technology – and society – ready?</span></figcaption>
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<h2>Data privacy</h2>
<p>There are other issues that go beyond the question of just how well the algorithm works. As part of its process, ID.me collects a very large amount of personal information. It has a very long and difficult-to-read privacy policy, but essentially while ID.me doesn’t share most of the personal information, it does share various information about internet use and website visits with other partners. The nature of these exchanges is not immediately apparent. </p>
<p>So one question that arises is what level of information the company shares with the government, and whether the information can be used in tracking U.S. citizens between regulated boundaries that apply to government agencies. Privacy advocates on both the left and right have long opposed any form of a mandatory uniform government identification card. Does handing off the identification to a private company allow the government to essentially achieve this through subterfuge? It’s not difficult to imagine that some states – and maybe eventually the federal government – could insist on an identification from ID.me or one of its competitors to access government services, get medical coverage and even to vote. </p>
<p>As Joy Buolamwini, an MIT AI researcher and founder of the <a href="https://www.ajl.org/">Algorithmic Justice League</a>, argued, beyond accuracy and bias issues is the question of <a href="https://www.theatlantic.com/ideas/archive/2022/01/irs-should-stop-using-facial-recognition/621386/">the right not to use biometric technology</a>. “Government pressure on citizens to share their biometric data with the government affects all of us — no matter your race, gender, or political affiliations,” she wrote.</p>
<h2>Too many unknowns for comfort</h2>
<p>Another issue is who audits ID.me for the security of its applications? While no one is accusing ID.me of bad practices, security researchers are worried about how the company may protect the incredible level of personal information it will end up with. Imagine a security breach that released the IRS information for millions of taxpayers. In the fast-changing world of cybersecurity, with threats ranging from individual hacking to international criminal activities, experts would like assurance that a company provided with so much personal information is using state-of-the-art security and keeping it up to date. </p>
<p>[<em>Over 140,000 readers rely on The Conversation’s newsletters to understand the world.</em> <a href="https://memberservices.theconversation.com/newsletters/?source=inline-140ksignup">Sign up today</a>.]</p>
<p>Much of the questioning of the IRS decision comes because these are early days for government use of private companies to provide biometric security, and some of the details are still not fully explained. Even if you grant that the IRS use of the technology is appropriately limited, this is potentially the start of what could quickly snowball to many government agencies using commercial facial recognition companies to get around regulations that were put in place specifically to rein in government powers. </p>
<p>The U.S. stands at the edge of a slippery slope, and while that doesn’t mean facial recognition technology shouldn’t be used at all, I believe it does mean that the government should put a lot more care and due diligence into exploring the terrain ahead before taking those critical first steps.</p><img src="https://counter.theconversation.com/content/175817/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>James Hendler receives funding from IBM, DARPA, and the NSF. He is a Professor at Rensselaer Polytechnic Institute, affiliated with the Association for Computing Machinery (ACM) and consults or has consulted for a number of government agencies. The opinions expressed in this piece are solely those of the author and do not necessarily represent the opinions of the ACM or any of the other organizations with which he is affiliated.</span></em></p>Federal and state governments are turning to a facial recognition company to ensure that people accessing services are who they say they are. The move promises to cut down on fraud, but at what cost?James Hendler, Professor of Computer, Web and Cognitive Sciences, Rensselaer Polytechnic InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1757772022-01-31T13:00:29Z2022-01-31T13:00:29ZThe IRS already has all your income tax data – so why do Americans still have to file their taxes?<figure><img src="https://images.theconversation.com/files/442821/original/file-20220126-21-1uhwjxm.jpg?ixlib=rb-1.1.0&rect=65%2C45%2C4296%2C2798&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The government could toss the 1040 in the trash. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/crumpled-tax-forms-royalty-free-image/173618522?adppopup=true">Kameleon007iStock via Getty Images</a></span></figcaption></figure><p>Doing taxes in the U.S. <a href="https://www.businessinsider.com/filing-taxes-america-system-how-other-countries-do-better-2021-8">is notoriously complicated</a> and <a href="https://www.creditkarma.com/tax/i/pay-to-do-your-taxes">costly</a>. And it gets even worse <a href="https://www.al.com/news/2022/01/irs-expects-backlogs-and-delays-heres-when-to-file-taxes.html">when there are delays</a> and backlogs, making it especially hard to reach the Internal Revenue Service for assistance.</p>
<p>But to me this raises an important question: Why should taxpayers have to navigate the tedious, costly tax filing system at all?</p>
<h2>The case for a ‘simple return’</h2>
<p>In 1985, President Ronald Reagan promised a “<a href="https://www.reaganlibrary.gov/archives/speech/address-nation-tax-reform-may-1985">return-free</a>” tax system in which half of all Americans would never fill out a tax return again. Under the framework, taxpayers with simple returns would automatically receive a refund or a letter detailing any tax owed. Taxpayers with more complicated returns would use the system in place today.</p>
<p>In 2006, Austan Goolsbee, who later went on to serve as President Barack Obama’s chief economist, suggested a “<a href="https://www.brookings.edu/research/the-simple-return-reducing-americas-tax-burden-through-return-free-filing/">simple return</a>,” in which taxpayers would receive already completed tax forms for their review or correction. Goolsbee estimated his system would save taxpayers more than <a href="https://www.brookings.edu/research/the-simple-return-reducing-americas-tax-burden-through-return-free-filing/">US$2 billion a year in tax preparation fees</a>. </p>
<p>Though never implemented, the two proposals illustrate what we all know: <a href="https://www.pbs.org/newshour/show/dreading-taxes-countries-show-us-theres-another-way">No one enjoys filling out tax forms</a>. </p>
<p>So why do we have to?</p>
<p>As an <a href="https://law-vbe.proxy.library.vanderbilt.edu/bio/beverly-moran">expert on the U.S. tax system</a>, I see America’s costly and time-consuming tax reporting system as a consequence of its relationship with the commercial tax preparation industry, which lobbies Congress to maintain the status quo. </p>
<h2>A costly and time-consuming system</h2>
<p>Return-free filing is not difficult. </p>
<p><a href="https://www.taxpolicycenter.org/briefing-book/what-other-countries-use-return-free-filing">At least 30 countries permit return-free filing</a>, including Denmark, Sweden, Spain and the United Kingdom.</p>
<p>Furthermore, 95% of American taxpayers receive at least one of more than <a href="https://www.irs.gov/businesses/small-businesses-self-employed/a-guide-to-information-returns">30 types of information returns</a> that let the government know their exact income. These information returns give the government everything it needs to <a href="https://www.washingtonpost.com/opinions/americans-shouldnt-be-responsible-for-filing-tax-returns--the-government-should/2017/03/30/e91d8cd8-0979-11e7-93dc-00f9bdd74ed1_story.html">fill out most taxpayers’ returns</a>.</p>
<p>The U.S. system <a href="https://www.theatlantic.com/business/archive/2016/03/the-10-second-tax-return/475899/">is 10 times more expensive</a> than tax systems in 36 other countries with robust economies. <a href="https://www.theatlantic.com/ideas/archive/2019/04/american-tax-returns-dont-need-be-painful/586369/">But those costs vanish in a return-free system, as would the</a> 2.6 billion hours Americans spend on tax preparation each year.</p>
<p>Maybe you’re wondering whether Congress is just behind the times, unaware that it can release us from tax preparation? Not true.</p>
<h2>Commercial tax preparation</h2>
<p>About two decades ago, Congress directed the IRS to provide low-income taxpayers with free tax preparation. The agency responded in 2002 with “<a href="https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free">Free File</a>,” a public-private partnership between the government and the tax-preparation industry. As part of the deal, the IRS agreed not to <a href="https://www.wsj.com/articles/why-free-file-for-taxes-isnt-so-popular-1422633546">compete with the private sector</a> in the free tax preparation market. </p>
<p>In 2007, the House of Representatives rejected legislation to provide <a href="https://www.govtrack.us/congress/bills/110/hr3457/text">free government tax preparation</a> for all taxpayers. And in 2019, Congress tried to <a href="https://www.propublica.org/article/congress-scraps-provision-to-restrict-irs-from-competing-with-turbotax">legally bar the IRS</a> from ever providing free online tax preparation services. </p>
<p>Only a <a href="https://www.propublica.org/article/congress-scraps-provision-to-restrict-irs-from-competing-with-turbotax">public outcry turned the tide</a>.</p>
<p>The public part of Free File consists of the IRS herding taxpayers to commercial tax -preparation websites. The private part consists of those commercial entities <a href="https://www.propublica.org/article/turbotax-just-tricked-you-into-paying-to-file-your-taxes">diverting taxpayers</a> toward costly alternatives. </p>
<p>According to the Treasury Inspector General for Tax Administration, which oversees IRS activities, private partners use computer code to <a href="https://www.theverge.com/2020/1/1/21045779/irs-turbotax-free-file-h-r-block-tax-preparation-new-rules">hide the free websites</a> and take unsuspecting taxpayers to paid sites. </p>
<p>Should a taxpayer discover a free preparation alternative, the private preparers <a href="https://www.treasury.gov/tigta/auditreports/2020reports/202040009_oa_highlights.html">impose various restrictions</a> such as income or the use of various forms as an excuse to kick taxpayers back to paid preparation. </p>
<p>Consequently, of the more than 100 million taxpayers eligible for free help, 35% end up paying for tax preparation and <a href="https://www.treasury.gov/tigta/auditreports/2020reports/202040009fr.pdf">60% never even visit the free websites</a>. Instead of 70% of Americans receiving free tax preparation, commercial <a href="https://www.politico.com/agenda/story/2018/07/18/tax-filing-congress-irs-000683/">companies whittled that percentage down to 3%</a>. </p>
<h2>Tax savings and evasion</h2>
<p>Perhaps you are guessing that there are valid policy justifications for avoiding government and empowering the private sector. Judge those arguments yourself.</p>
<p>One argument from commercial tax preparers is that taxpayers will <a href="https://www.nbcnews.com/business/taxes/turbotax-h-r-block-spend-millions-lobbying-us-keep-doing-n736386">miss out on valuable tax savings</a> if they rely on free government preparation.</p>
<p>In fact, the government software would reflect the same laws used by the paid preparers with the same access to tax saving deductions or credits. Further, tax preparers like H&R Block promise to pay <a href="https://www.hrblock.com/guarantees/">all taxes and interest resulting from a failed audit</a>. As a result, these services have every incentive to take conservative, pro-government tax positions.</p>
<p>A second argument is that government-prepared tax returns encourage tax evasion. </p>
<p>In a no-return system, the <a href="https://www.forbes.com/sites/joshbarro/2012/04/17/why-doesnt-the-irs-do-your-taxes-for-you/?sh=8e43a542fb63">government reveals its knowledge of the taxpayer’s income</a> before the taxpayer files. Thus, the argument goes, the taxpayer knows if the government has missed something and has reason to let the mistake stand.</p>
<p>But taxpayers already know what information forms the government has because they receive duplicates of those forms. The incentive to lie does not increase because the taxpayer avoids weeks of tax preparation.</p>
<h2>Bolstering the anti-taxers</h2>
<p>Finally, there is the anti-tax argument for onerous tax preparation: Keep tax preparation unpleasant to fuel anti-tax sentiment. </p>
<p>In the past, Republicans argued against high taxes. But after decades of tax cuts, Americans are <a href="https://www.theatlantic.com/ideas/archive/2019/04/american-tax-returns-dont-need-be-painful/586369/">no longer swayed by that argument</a>.</p>
<p>Exasperating tax preparation, according to this argument, helps keep the anti-tax fever high. And that <a href="https://slate.com/business/2012/04/grover-norquist-and-h-r-block-the-unholy-alliance-of-tax-prep-firms-and-conservative-activists-to-make-your-taxes-even-more-complicated.html">fuels public hate for government</a> and the tax system.</p>
<p>Unfortunately, the anti-tax contingent’s desire to force Americans to spend time and money on tax preparation dovetails with the tax preparation industry’s <a href="https://www.nytimes.com/2015/04/16/technology/personaltech/turbotax-or-irs-as-tax-preparer-intuit-has-a-favorite.html">desire to collect billions</a> of dollars in fees. </p>
<p><a href="https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free">Tax preparation companies lobby Congress</a> to keep tax preparation costly and complicated. Indeed, Intuit, maker of TurboTax, the tax preparation software, has listed government tax preparation as a <a href="https://www.marketplace.org/2017/10/12/tax-preparation-government-free">threat to its business model</a>. ProPublica reported in 2019 on the <a href="https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free">company’s 20-year fight</a> to prevent the government from making tax filing simple and free for most citizens.</p>
<p>One example of that complexity is the <a href="https://www.nerdwallet.com/article/taxes/can-you-take-earned-income-tax-credit">earned income tax credit</a>, a government program for low-income people. The credit is so complicated that <a href="https://www.taxpolicycenter.org/briefing-book/do-all-people-eligible-eitc-participate">20% of the people who are eligible never file</a>, thus missing out on thousands of dollars in savings.</p>
<p>If the government prepared everyone’s tax returns, I believe more of that 20% would receive government support.</p>
<p>Nonetheless, H&R Block <a href="https://www.cbpp.org/blog/senate-bill-would-boost-burdens-costs-to-claim-working-family-tax-credits">reportedly</a> <a href="https://billmoyers.com/story/how-lobbying-by-tax-preparer-helps-keep-tax-day-complicated/">lobbied lawmakers</a> to make the credit more complicated, thereby <a href="https://www.vox.com/2015/8/24/9195129/h-r-block">driving more taxpayers to paid preparation services</a>.</p>
<p>I believe only public outcry can change the system. </p>
<p><em>This article was corrected to clarify how tax preparation companies have lobbied Congress and to clarify the timing of Austan Goolsbee’s service as chief economist to President Obama. It is an updated version of an <a href="https://theconversation.com/why-cant-the-irs-just-send-americans-a-refund-or-a-bill-156733">article originally published</a> on March 22, 2021.</em></p><img src="https://counter.theconversation.com/content/175777/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Beverly Moran does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A tax expert explains why the US continues to use such a complex and costly income tax system.Beverly Moran, Professor Emerita of Law, Vanderbilt UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1710272021-11-04T15:53:15Z2021-11-04T15:53:15ZThe seven steps South Africa is taking to get it closer to eliminating malaria<figure><img src="https://images.theconversation.com/files/430218/original/file-20211104-11504-ubo1nb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South Africa offers free malaria testing and treatment to anyone entering the country along shared borders.</span> <span class="attribution"><span class="source">Jaishree Raman</span></span></figcaption></figure><p>There were <a href="https://www.isglobal.org/en_GB/-/la-crisis-de-covid-19-podria-duplicar-los-casos-de-malaria-en-el-africa-subsahariana">dire warnings</a> that malaria cases would surge across Africa after the World Health Organisation (WHO) <a href="https://www.who.int/director-general/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19---11-march-2020">declared</a> the COVID-19 outbreak as a global pandemic in early March 2020.</p>
<p>Many felt that the already overburdened healthcare systems would not be able to cope with increased patient loads. There was also concern that the pandemic would disrupt the delivery of essential malaria services. </p>
<p>Fortunately, these predictions have not fully materialised. Most malaria control programmes on the continent took action to keep delivering essential malaria services. </p>
<p>The South African malaria control programme, for one, found ways to keep its efforts at stopping transmission on track despite the threat from COVID-19. For example, it set up systems to <a href="http://www.samj.org.za/index.php/samj/article/view/13111">screen and test for COVID-19 and malaria</a> in malaria-risk areas. It also modified the training for indoor residual spraying to comply with COVID-19 regulations.</p>
<p>South Africa is aiming to eliminate malaria by 2023. The disease only occurs in certain areas of the South Africa. It is currently limited to the low altitude border regions of three provinces – KwaZulu-Natal, Mpumalanga and Limpopo. KwaZulu-Natal is the province closest to eliminating malaria by 2023. And it’s closely followed by Mpumalanga. Unfortunately, Limpopo will most likely miss the 2023 elimination target. It is the province most affected by malaria. </p>
<p>In June 2021 China became the 40th country to be declared <a href="https://www.who.int/teams/global-malaria-programme/elimination/countries-and-territories-certified-malaria-free-by-who">malaria-free</a> by the WHO. Other countries to achieve this recently are El Salvador in 2021 and Algeria and Argentina in 2019. </p>
<p>South Africa has adopted a number of innovations to achieve its elimination goal. Seven stand out. These are: prompt diagnosis; reporting every confirmed case to healthcare authorities; effective treatment; effective vector control measures; monitoring resistance to antimalarials and insecticide; and increased community-based malaria testing and treating. </p>
<p>Most important has been the <a href="https://malariajournal.biomedcentral.com/articles/10.1186/s12936-021-03875-z">uninterrupted domestic funding</a> of the malaria elimination programme. </p>
<h2>One step at a time</h2>
<p>Malaria prevalence is low in South Africa. This is why diagnosis is key. Every malaria infection must be confirmed either by the microscopic examination of a blood smear or by a malaria rapid diagnostic test before treatment can be prescribed.</p>
<p>Treating a patient based only symptoms such as fever, fatigue and headache is not encouraged. Many other disease share these symptoms – including COVID-19. </p>
<p>All malaria-related healthcare professionals are allowed to use a malaria rapid diagnostic test to test for malaria within communities.</p>
<p>Notification after diagnosis is also important. Malaria is classified as a Category 1 medical condition in South Africa. This means that healthcare professionals must report every confirmed malaria case within 24 hours using the National Medical Conditions reporting system. </p>
<p>The prompt reporting of every case allows the malaria control programmes to investigate the case and respond in a timely manner to prevent further transmission or a malaria outbreak.</p>
<p>The next crucial step is treatment. South Africa was one of the first African malaria-endemic countries to use an artemisinin-based combination therapy. This treatment is recommended by the WHO for uncomplicated malaria. The drug used in South Africa (artemether-lumefantrine) is very effective. It has played a significant role in decreasing the country’s malaria burden. To ensure the drug remains effective, it is essential that all six doses of the drug are taken with some fatty food.</p>
<p>But medical interventions only go so far. Effective vector control is essential for malaria control and elimination. </p>
<p>Indoor residual spraying was developed in South Africa in the 1940s. This involves treating the inner walls of homesteads with an insecticide. It remains the primary method used to control the malaria mosquito in South Africa. But additional vector control tools are needed to achieve malaria elimination. </p>
<p>The national control programme is working with research partner organisations to test more tools. These include larviciding (treating mosquito breeding sites with chemicals or biological agents that kill mosquito larvae), and <a href="https://www.dst.gov.za/index.php/media-room/latest-news/2662-sterile-insect-technique-field-trials-to-eliminate-malaria-under-way">the sterile insect technique</a>. </p>
<p>Innovation is key to staying ahead of this disease given the threat of resistance. In 1999-2000 South Africa experienced a malaria outbreak. It was driven by the emergence of drug-resistant parasites and insecticide-resistant mosquito vectors. To prevent this from happening again, antimalarial drug and insecticide efficacy are routinely monitored by the national malaria control programme with support from partners. </p>
<p>Resistance to artemisinin-based combination therapy is emerging in some African countries. But artemether-lumefantrine remains effective in South Africa.</p>
<p>Lastly, the country has remained steadfast in funding its malaria control programme. The South African Malaria Control Programme is one of the few on the continent that is entirely funded by government. This stable source of funding has allowed the programme to carry out uninterrupted malaria control interventions.</p>
<h2>The final push</h2>
<p>These interventions have played a major role in getting South Africa close to eliminating malaria. But more work remains to be done. </p>
<p>The importation of malaria from neighbouring countries poses a significant threat to South Africa’s elimination aspirations. To address this problem South Africa, with support from a non-governmental organisation, <a href="https://www.humana.org/">Humana People to People</a>, has established malaria surveillance units. These are at strategic points along shared borders. The units offer free malaria testing and treatment services to anyone entering South Africa. </p>
<p>All individuals found to be have malaria are treated. They receive artemether-lumefantrine and a single low dose of transmission blocking drug, primaquine. These units have contributed to a significant decrease in malaria cases reported from the border areas.</p>
<p>Communities in malaria-endemic areas need to play an active role in eliminating malaria. They can remove potential breeding sites, ensure they get promptly tested for malaria when they have symptoms, and finish the entire course of antimalarials.</p><img src="https://counter.theconversation.com/content/171027/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jaishree Raman receives funding from the National Research Foundation of South Africa, the National Health Laboratory Services Research Trust and the Bill and Melinda Gates Foundation. She is affiliated with Centre for Emerging Zoonotic Diseases, National Institute for Communicable Diseases, the Wits Research for Malaria, University of Witwatersrand and the UP Institute for Sustainable Malaria Control, University of Pretoria.</span></em></p><p class="fine-print"><em><span>Shüné Oliver receives funding from the National Research Foundation of South Africa and the National Health Laboratory Services Services Research Trust. She is affiliated with Centre for Emerging Zoonotic Diseases, National Institute for Communicable Diseases and the Wits Research for Malaria, University of Witwatersrand</span></em></p>The South African Malaria Control Programme is one of the few on the continent that is entirely funded by government. The stable source of funding has allowed for steady malaria control interventions.Jaishree Raman, Principal Medical Scientis and Head of Laboratory for Antimalarial Resistance Monitoring and Malaria Operational Research, National Institute for Communicable DiseasesShüné Oliver, medical scientist , National Institute for Communicable DiseasesLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1704352021-10-31T11:56:33Z2021-10-31T11:56:33ZThe Pandora Papers: How punishing tax cheats can serve as a deterrent<figure><img src="https://images.theconversation.com/files/429186/original/file-20211028-15-gg3tme.jpg?ixlib=rb-1.1.0&rect=0%2C31%2C5192%2C2958&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Enforcing punishments on proven tax cheats could provide benefits beyond improving compliance to tax laws. Once offenders pay up, billions lost to offshore scandals could be recouped and the tax burden more fairly shared among taxpayers.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><p>Law-abiding taxpayers look on with disappointment and disdain as details about the illicit financial arrangements of the ultra-wealthy surface — again. The latest leak of nearly 12 million offshore financial records — the so-called <a href="https://www.icij.org/investigations/pandora-papers/about-pandora-papers-leak-dataset/">Pandora Papers</a> — provides clues as to <a href="https://www.cbc.ca/news/jacques-villeneuve-pandora-papers-offshore-accounts-1.6226467">how the rich avoid paying their fair share of taxes</a>. </p>
<p>Sports stars Jacques Villeneuve, a former Formula One racer, and figure skating legend Elvis Stojko <a href="https://www.cbc.ca/news/pandora-papers-offshore-tax-avoidance-1.6197303">are among the Canadians who have been named in the Pandora Papers</a>. </p>
<p>This is not the first time the public has learned about how the wealthy evade taxes and shield their riches. The <a href="https://www.cbc.ca/news/world/panama-leak-offshore-records-putin-messi-money-1.3518951">Panama Papers</a>, <a href="https://globalnews.ca/news/3845716/the-paradise-papers-canada/">Paradise Papers</a> and <a href="https://www.cbc.ca/news/business/leaked-luxembourg-files-expose-global-companies-secret-deals-to-avoid-tax-1.2825627">Luxembourg Leaks</a> uncovered <a href="https://www.canada.ca/en/revenue-agency/corporate/about-canada-revenue-agency-cra/tax-alert/aggressive-tax-planning.html">aggressive tax planning</a> and <a href="https://www.taxfairness.ca/en/news/tax-avoidance-or-tax-evasion-whats-difference-0">tax evasion</a> undertaken by the global elite.</p>
<p>When the rich, famous and infamous don’t pay their fair share of taxes, the public looks to authorities to enforce tax laws and punish the offenders. Punishment creates a sense of <a href="https://www.britannica.com/topic/retributive-justice">retributive justice</a> and serves as a reminder that tax compliance laws should be obeyed for the collective good of society. However, authorities often <a href="https://www.cbc.ca/news/business/cra-kmpg-settlement-taxes-1.5154610">fail to deliver</a>, perpetuating the cycle of injustice. </p>
<h2>Does punishment deter tax evasion?</h2>
<p>What we don’t know for sure is whether punishing the offenders involved in global tax scandals benefits the reported income compliance of observers and deters tax cheats. My <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3826736">preliminary research</a> suggests that the answer is “yes,” but only if observers perceive that the tax offender is fully blameworthy or responsible. </p>
<p>If the punishment of blameworthy offenders can improve compliance, it would seem logical for tax authorities to actively prosecute all suspected offenders. But this is hardly the case. </p>
<p>With <a href="https://www.cbc.ca/news/politics/offshore-tax-avoidance-evasion-1.6017316">limited resources</a> and the risk of losing costly legal battles, <a href="https://www.cbc.ca/news/politics/kpmg-isle-of-man-taxes-house-commons-finance-committee-1.6047111">not everyone</a> who evades taxes and shields wealth gets punished. Even worse, if prosecutors’ cases don’t stand up in court, it can encourage aggressive tax planning or tax evasion because a precedent is set that undermines tax authorities.</p>
<figure class="align-right ">
<img alt="A Canadian tax form" src="https://images.theconversation.com/files/429358/original/file-20211029-27-1o7j5be.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/429358/original/file-20211029-27-1o7j5be.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/429358/original/file-20211029-27-1o7j5be.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/429358/original/file-20211029-27-1o7j5be.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/429358/original/file-20211029-27-1o7j5be.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/429358/original/file-20211029-27-1o7j5be.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/429358/original/file-20211029-27-1o7j5be.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Does punishing tax evaders serve as a deterrent?</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
</figcaption>
</figure>
<p>Why does compliance increase when tax cheats are punished? My research findings reveal that compliance improves when wrongdoers appear more deserving of prosecution and are ultimately punished. Observers experience satisfaction when authorities uphold justice, especially for the wealthy. </p>
<p>When justice is applied equally, authorities reinforce their requirement to be obeyed, which signals both their competence and that tax evaders will be found and held accountable. </p>
<h2>Pointing the finger at advisers</h2>
<p>Being perceived as guilty increases perceptions of an offender deserving a punishment. As such, a strategic course of action for those exposed in global tax scandals is to deny responsibility. Ultra-wealthy individuals named in the Pandora Papers and other tax scandals often blame lawyers or advisers. </p>
<figure class="align-left ">
<img alt="Elvis Stojko shoots T-shirts into a crowd from a plastic tube." src="https://images.theconversation.com/files/429354/original/file-20211029-25-ascu4b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/429354/original/file-20211029-25-ascu4b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=439&fit=crop&dpr=1 600w, https://images.theconversation.com/files/429354/original/file-20211029-25-ascu4b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=439&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/429354/original/file-20211029-25-ascu4b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=439&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/429354/original/file-20211029-25-ascu4b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=552&fit=crop&dpr=1 754w, https://images.theconversation.com/files/429354/original/file-20211029-25-ascu4b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=552&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/429354/original/file-20211029-25-ascu4b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=552&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Canadian figure skating legend Elvis Stojko shoots T-shirts into the crowd during a break at the 2019 National Skating Championships at Harbour Station in Saint John, N.B., in 2019.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Andrew Vaughan</span></span>
</figcaption>
</figure>
<p>Stojko <a href="https://www.cbc.ca/news/canada/elvis-stojko-offshore-trust-belize-anthony-malcolm-1.6199821">has denied responsibility</a> and said he trusted his lawyer to manage his financial details.</p>
<p>Similarly, <a href="https://www.timescolonist.com/local-news/victoria-family-cited-in-cra-crackdown-on-tax-evasion-4626724">the wealthy Cooper family of British Columbia</a> — named in the Panama Papers — denied responsibility. Marshall Cooper, who grew up in South Africa, <a href="https://www.cbc.ca/news/business/kpmg-offshore-sham-deceived-tax-authorities-cra-alleges-1.3209838">stated that he was unaware of Canadian tax laws</a> and simply hired the best advisers to manage the family’s finances. </p>
<p>With blame being tossed back and forth, perhaps authorities should <a href="https://theconversation.com/pandora-papers-its-time-to-pursue-lawyers-and-accountants-who-enable-tax-evasion-offshore-tax-expert-qanda-169192">pursue the lawyers and advisers</a> of the wealthy rather than simply punishing tax evaders. </p>
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Read more:
<a href="https://theconversation.com/paid-millions-to-hide-trillions-pandora-papers-expose-financial-crime-enablers-too-169326">Paid millions to hide trillions: Pandora Papers expose financial crime enablers, too</a>
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<p>The media may <a href="https://www.cbc.ca/news/pandora-papers-offshore-tax-avoidance-1.6197303">shame the wealthy,</a> but lawyers, accountants and other advisers act as enablers who facilitate aggressive tax planning, and likely in some cases tax evasion. If enablers share responsibility, they too should be punished. It’s possible that punishing enablers could also compel taxpayers to comply with tax laws.</p>
<h2>Billions recouped?</h2>
<p>Enforcing punishments on proven tax cheats could provide added benefits beyond improving compliance to tax laws. Once offenders pay up, <a href="https://www.cbc.ca/news/business/cra-tax-gap-foreign-holdings-1.4726983">billions lost to offshore scandals</a> could be recouped and the tax burden more fairly shared among taxpayers. </p>
<p>Still, in the aftermath of the Pandora Papers, taxpayers are likely wondering what the authorities will do this time and whether tax offenders will get the punishments they deserve. <a href="https://www.oecd.org/tax/crime/oecd-calls-on-countries-to-crack-down-on-the-professionals-enabling-tax-and-white-collar-crimes.htm">Global tax transparency efforts</a> are ratcheting up, possibly offering a glimmer of hope that justice will prevail. But even with this silver lining, <a href="https://theconversation.com/the-next-pandora-papers-expose-is-inevitable-unless-governments-do-more-on-two-key-reforms-169357">some remain pessimistic</a>. </p>
<p>With evidence that punishment can re-establish a sense of justice, authorities should use their resources to ensure culpable offenders are held accountable. Upholding justice, especially for the wealthy and privileged, serves the collective good of society.</p><img src="https://counter.theconversation.com/content/170435/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tisha King does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Research suggests punishing tax cheats can re-establish a sense of justice among the general public, so authorities should use their resources to ensure culpable offenders are held accountable.Tisha King, Assistant Professor, Accounting, Dalhousie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1649882021-08-12T12:26:05Z2021-08-12T12:26:05ZAmid calls to #TaxTheChurches – what and how much do US religious organizations not pay the taxman?<figure><img src="https://images.theconversation.com/files/415517/original/file-20210810-21-1rbd2q.jpg?ixlib=rb-1.1.0&rect=30%2C0%2C5061%2C3389&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Megachurches can be megarich.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/first-batpist-megachurch-in-dallas-at-night-royalty-free-image/528409655">Allan Baxter/Getty Images</a></span></figcaption></figure><p>The hashtag <a href="https://twitter.com/search?q=%23TaxTheChurches&src=typeahead_click">#TaxTheChurches</a> began <a href="https://www.businessinsider.com/joel-osteen-rich-taxes-wealth-ferrari-twitter-2021-7">trending on Twitter</a> in mid-July.</p>
<p>The spark was allegations about the wealth of celebrity pastor <a href="https://www.thethings.com/pastor-joel-osteen-criticized-for-his-vast-fortune-as-he-drives-325k-ferrari/">Joel Osteen</a>. But it wasn’t the first time that “tax the churches” has circulated. In fact it is slogan that long predates social media – Frank Zappa was <a href="https://www.youtube.com/watch?v=gydA6tPF5xI&t=0s">singing it</a> back in 1981 and Mark Twain <a href="https://archive.org/stream/MarkTwainsNotebook/TXT/00000233.txt">expressed similar sentiments</a> many decades before that.</p>
<p>As a <a href="https://www.ut.edu/directory/cragun-ryan">sociologist of religion</a>, I’ve long been interested in why religious institutions are exempt from certain taxes and what that means in potential lost revenue for the U.S. In 2012, I examined this issue and estimated that in total, churches in the U.S. get out of paying around <a href="https://centerforinquiry.org/press_releases/u-s-_loses_over_71_billion_in_religious_tax_exemptions/">US$71 billion</a> in taxes annually.</p>
<h2>Auditing the house of God</h2>
<p>Most religious organizations are exempt from a variety of taxes that individuals and businesses are required to pay, like income and property taxes. These exemptions began formally in <a href="https://www.irs.gov/pub/irs-soi/tehistory.pdf">1913 at the federal level</a>, though there is a much longer history of exempting charitable, educational, scientific and religious institutions from taxation.</p>
<p>It is important to note that faith organizations can be exempt from paying taxes solely based on their religious work, not for any other charitable endeavors. Churches and religious organizations – which the <a href="https://www.irs.gov/pub/irs-tege/atg_religious_orgs.pdf">IRS loosely defines</a> as entities organized for “religious purposes” or for “advancing religion” – <a href="https://www.irs.gov/charities-non-profits/churches-religious-organizations">are listed separately from other tax-exempt entities and charities</a> and can be subject to different rules. Some religious congregations do engage in relief efforts for the poor and needy, but many do not. And of the ones that do, many give a <a href="https://doi.org/10.1002/pf.3504">very small amount of their revenue for such charitable purposes</a>.</p>
<p>Additionally, unlike charities, churches and other places of worship are <a href="https://www.irs.gov/charities-non-profits/annual-exempt-organization-return-who-must-file">not required to report any financial information</a> to the IRS. The IRS encourages churches to do so, but they are not required to. And it can be an onerous process for the IRS to gain approval to audit places of worship, requiring <a href="https://www.irs.gov/charities-non-profits/churches-religious-organizations/special-rules-limiting-irs-authority-to-audit-a-church">prior evidence of abuse of tax exemptions reported by a high-level Treasury employee</a>.</p>
<p>In many places in the U.S., income is taxed at the local, state and federal levels. Religious institutions do not pay any income tax at any level of government. Additionally, <a href="https://theconversation.com/whats-the-charitable-deduction-an-economist-explains-162647">individuals and corporations that donate</a> to religions <a href="https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contribution-deductions">can deduct those expenses</a> – once they are above a specific amount – from their taxable income.</p>
<h2>Heavenly bank accounts</h2>
<p>Religious organizations also pay no taxes on their investments, whether it be interest they earn on their investments or in capital gains – the increased value of stock from when the stock was purchased. As such, they are able to invest excess revenue in the stock market or other investment instruments but pay no taxes on the corresponding earnings. One Fortune 500 company, <a href="https://www.thrivent.com/about-us/">Thrivent</a>, originated as a financial services organizations for Missouri Synod Lutherans in 1902, and then for all Lutherans in the 1960s. It was called Thrivent Financial for Lutherans up to 2014, but it now manages the investments of members of many religious congregations as well.</p>
<p>Religious endowments and investment accounts total in the <a href="https://www.wsj.com/articles/the-mormon-church-amassed-100-billion-it-was-the-best-kept-secret-in-the-investment-world-11581138011">hundreds of billions of dollars in the U.S.</a>. Just how much money religious organizations have is hard to tell, as churches are not required to report such information. However, <a href="https://www.beliefnet.com/faiths/christianity/8-richest-pastors-in-america.aspx">the net worth of some well-known pastors</a>, like <a href="https://www.ibtimes.com/kenneth-copeland-net-worth-evangelist-richest-pastor-world-2951331">Kenneth Copeland</a> and <a href="http://www.sullivan-county.com/news/pat_quotes/palst.htm">Pat Robertson</a>, are estimated to run into the hundreds of millions of dollars.</p>
<p>Religious organizations pay <a href="https://www.tax.ny.gov/pdf/publications/sales/pub843.pdf">no sales tax</a>. This means that, when representatives of a religious entity make a purchase – office supplies, cars or travel, for example – they are exempted from whatever the local sales tax is in that area. <a href="https://www.irs.gov/pub/irs-pdf/p1828.pdf">They also pay no income taxes for businesses they own</a>, if they can show that the business furthers the objectives of the religion. For example, a bookstore that sells religious books would be exempt.</p>
<p>Religious organizations may pay employment taxes for their employees. However, there are exceptions built into the tax code here as well. Clergy and members of religious orders are the only citizens who can opt out of paying <a href="https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes">Self-Employed Contributions Act taxes</a>, which are 15.3% taxes on income for self-employed individuals that pay for Social Security and other federal benefits.</p>
<p>If religious clergy opt out of the SECA tax, they cannot receive Social Security benefits. Clergy can also <a href="https://www.irs.gov/faqs/interest-dividends-other-types-of-income/ministers-compensation-housing-allowance">deduct the upkeep costs of their “parsonage</a>” – their home or apartment – from their taxable income.</p>
<figure class="align-center ">
<img alt="Joel Osteen launches Joel Osteen Radio at SiriusXM Studios" src="https://images.theconversation.com/files/415519/original/file-20210810-17-wq7aui.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/415519/original/file-20210810-17-wq7aui.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/415519/original/file-20210810-17-wq7aui.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/415519/original/file-20210810-17-wq7aui.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/415519/original/file-20210810-17-wq7aui.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/415519/original/file-20210810-17-wq7aui.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/415519/original/file-20210810-17-wq7aui.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Reports on Joel Osteen’s wealth led to the trending of #TaxTheChurches.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/joel-osteen-launches-joel-osteen-radio-at-siriusxm-studios-news-photo/456343642?adppopup=true">Taylor Hill/Getty Images</a></span>
</figcaption>
</figure>
<p>Finally, religious organizations <a href="https://www.tax.ny.gov/pit/property/exemption/index.htm">pay no property taxes</a>. Property taxes are primarily used in the U.S. to fund local services like firefighting, emergency medical services and police departments, as well as schools and other infrastructure, all of which religious organizations use.</p>
<p>Some municipalities make information on property taxes publicly available, so it is relatively easy to work out the cost of this tax exemption to local communities.</p>
<p>I looked at <a href="https://www.mymanatee.org/">Manatee County in Florida</a> as an example. Manatee County is a midsize county in Florida with just over 300,000 citizens living in a mixture of rural and urban areas. <a href="https://www.prri.org/research/2020-census-of-american-religion/#page-section-1">Recent data</a> suggests that Manatee County is close to the national average when it comes to the religious makeup of its residents. Finally, Florida property values and the cost of living rank almost exactly in the middle of all U.S. states, making Manatee County a fairly representative illustration of the nation generally.</p>
<p>Manatee County’s <a href="https://www.manateepao.com/">public portal</a> indicates which properties are classified as churches and are therefore exempt from “ad valorem” taxes – those based on the assessed value of the property – and other property taxes. By downloading the “just market values” for the 360 properties classified as having a religious exemption, I was able to work out that their combined value was $406.7 million. If they paid the standard property taxes required of both commercial and residential properties in Manatee County, they would add $8.5 million to the tax revenue of the county annually. With the county’s budget at $740million, an additional $8.5 million works out to be about 1.1% of the total. This, <a href="https://www.mymanatee.org/common/pages/DisplayFile.aspx?itemId=17765969">according to the 2022 Manatee County budget proposal</a>, would be enough to cover the building of all three newly proposed emergency medical services stations in the county, along with upgrades of EMS equipment and its 911 service.</p>
<p>[<em>3 media outlets, 1 religion newsletter.</em> <a href="https://theconversation.com/us/newsletters/this-week-in-religion-76/?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=religion-3-in-1">Get stories from The Conversation, AP and RNS.</a>]</p>
<h2>Taxing the ‘infidel and the atheist’</h2>
<p>Projecting those numbers out to the entire U.S. population is tricky. The number and proportion of religiously exempt properties varies by county; property values and tax rates vary across the country, and the value of religiously exempt properties varies as well. </p>
<p>But if one assumed that the exempt taxes are uniform across the country based on the information derived from Manatee County – which, to be clear, they’re not – local and state governments forgo roughly $6.9 billion in tax revenue annually by exempting religions from paying property taxes.</p>
<p>This is just an estimate – it is nearly impossible to know the actual amount, and it may be that the true figure is even higher. If churches and other places of worship were required to file annual financial reports, researchers could use that information to evaluate the financial health of religious entities in the U.S.</p>
<p>It would also give a clearer understanding as to how much, in <a href="https://digitalcommons.law.uidaho.edu/cgi/viewcontent.cgi?article=1194&context=idaho-law-review">Twain’s words</a>, “the infidel and the atheist and the man without religion are taxed to make up the deficit in the public income” caused by the exemption for churches.</p>
<p>With such information more readily available, the public would find it much easier to discuss the merits of a hashtag campaign like #TaxTheChurches.</p><img src="https://counter.theconversation.com/content/164988/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ryan Cragun does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Megachurches and the men who lead them can be superrich. So why don’t the IRS and local authorities see a cent in taxes? A scholar explains.Ryan Cragun, Professor of Sociology, University of TampaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1601892021-05-16T07:50:46Z2021-05-16T07:50:46ZMalaria control needs longer lasting repellents. We’re a step closer to finding one<figure><img src="https://images.theconversation.com/files/400031/original/file-20210511-13-eh4lkx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Malaria infections can still occur outdoors.</span> <span class="attribution"><span class="source">GettyImages</span></span></figcaption></figure><p>Malaria is one of the <a href="https://www.who.int/news/item/09-12-2020-who-reveals-leading-causes-of-death-and-disability-worldwide-2000-2019">leading causes</a> of illness and death around the world. The disease is primarily caused by the bite of mosquitoes carrying a parasite. In 2019, around 229 million malaria <a href="https://www.who.int/news-room/fact-sheets/detail/malaria">cases were reported</a> with an estimated number of 409,000 deaths. Most of the reported cases occurred in sub-Saharan Africa. Children younger than five years and pregnant women are most prone to malaria. </p>
<p>To prevent malaria, the World Health Organisation (WHO) <a href="https://app.magicapp.org/#/guideline/4870">recommends</a> spraying insecticides indoors and using bed nets treated with long-lasting insecticide. </p>
<p>These interventions have one big flaw, however. They focus on minimising malaria infections indoors. Infections can still occur outdoors. And in some African countries <a href="https://www.nature.com/articles/nrdp201750">resistance to insecticides</a> – especially pyrethroids – is emerging. So new methods to control mosquitoes are needed urgently. </p>
<p>Numerous repellent-based products, such as creams, roll-ons and sprays, are available on the market for outdoor protection. Most of these have a very short period of protection – a few hours. People need to be protected from mosquito bites for longer.</p>
<p>To address this problem our <a href="https://malariajournal.biomedcentral.com/articles/10.1186/s12936-021-03681-7">research</a> project aims to <a href="https://www.sciencedirect.com/science/article/abs/pii/S1385894718324719">develop a new</a>, cost-effective product such as an anklet or bracelet to repel mosquitoes for an extended period. </p>
<p>A possible method of achieving this is to use polyolefin strands filled with mosquito repellents (DEET and icaridin). Polyolefins are the most extensively used group of thermoplastics polymers because of their strength, light weight, low cost, easy processability and good water barrier properties. This would make the total cost of the repellent-based product affordable. </p>
<h2>Our research</h2>
<p>Our project is a collaboration between the Institute of Applied Materials and the Institute for Sustainable Malaria Control at the University of Pretoria in South Africa alongside Martin Luther University Halle-Wittenberg in Germany and Eduardo Mondlane University in Mozambique. </p>
<p>In essence, we apply our skills in chemical and polymer technology to design and develop products that may help to reduce the malaria burden. </p>
<p>We’re trying a technology that releases chemicals from the plastic in a controlled way. We want the active ingredients of the mosquito repellent to emerge gradually and at the same concentration over a prolonged <a href="https://malariajournal.biomedcentral.com/articles/10.1186/s12936-021-03681-7">period of time</a>. </p>
<p>The polymer product acts as a reservoir for suitable repellents by trapping the active ingredients inside a polymer matrix. The release rate is controlled by a membrane-like structure at the surface of the <a href="https://www.sciencedirect.com/science/article/abs/pii/S1385894718324719">system</a>.</p>
<figure class="align-left ">
<img alt="Man sitting with his feet in a cage" src="https://images.theconversation.com/files/400018/original/file-20210511-23-1tij2p3.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/400018/original/file-20210511-23-1tij2p3.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=739&fit=crop&dpr=1 600w, https://images.theconversation.com/files/400018/original/file-20210511-23-1tij2p3.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=739&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/400018/original/file-20210511-23-1tij2p3.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=739&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/400018/original/file-20210511-23-1tij2p3.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=929&fit=crop&dpr=1 754w, https://images.theconversation.com/files/400018/original/file-20210511-23-1tij2p3.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=929&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/400018/original/file-20210511-23-1tij2p3.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=929&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A volunteer testing mosquito a repellant.</span>
<span class="attribution"><span class="source">author supplied</span></span>
</figcaption>
</figure>
<p>We tested the polymer strands filled with repellents – DEET and icaridin – over a period of 12 weeks. This means each repellent-polymer strand lasts 12 weeks. DEET is the key active ingredient in many commercial mosquito-repellent formulations. It is also an environment-friendly compound. Icaridin is also a safe and effective repellent that has been available for many years for mosquito application. We tested the strands under controlled conditions in an insectary to determine their activity against mosquitoes. Caged mosquitoes were offered the opportunity to feed on both treated and untreated body parts of human volunteers. Three hundred mosquitoes were placed in a large netting cage. The volunteers could put their legs into the cage through portals.</p>
<p>The test strand, 3 metres long, was wound around one leg of a volunteer, leaving the other leg fully exposed. Both legs were then inserted into the cage, one leg per entry hole, and the person stood still for five minutes. After five minutes two other people used flashlights to count the number of mosquitoes on the lower leg of the test person. The numbers of mosquitoes on the treated and untreated legs were recorded separately.</p>
<p>The result showed that most of the mosquitoes chose to feed on untreated legs. The novel repellent-based polymer product has a longer lifespan – 12 weeks more than commercially available repellents. It has the added benefit of not only repelling mosquitoes, but killing them too if they make contact with it. And the polyolefins are widely available and cost effective. This would make the final product affordable – an important consideration.</p>
<p>More extensive and rigorous entomological and epidemiological testing would have to be done on products like this before they could become commercially acceptable. </p>
<h2>Looking ahead</h2>
<p>Malaria cannot be eliminated by just one vector control method. An integrated multidisciplinary approach is needed. </p>
<p>New, safe and sustainable methods need to be researched and developed to overcome current resistance trends and prevent transmission of malaria from all angles.</p>
<p>Our research opens the door to a new mosquito repellent formulation that improves the armoury against malaria.</p><img src="https://counter.theconversation.com/content/160189/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>António Benjamim Mapossa does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>This project may help to eradicate malaria by developing new technologies to prevent mosquitoes from biting people when they are outdoors.António Benjamim Mapossa, Postdoctoral fellow in UP Institute for Sustainable Malaria Control (UP ISMC), University of PretoriaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1567332021-03-22T12:27:44Z2021-03-22T12:27:44ZWhy can’t the IRS just send Americans a refund – or a bill?<figure><img src="https://images.theconversation.com/files/389691/original/file-20210315-23-1njb4bq.jpg?ixlib=rb-1.1.0&rect=107%2C17%2C5748%2C3898&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">U.S. taxpayers spend more than $2 billion annually in tax preparation fees.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/tax-filing-royalty-free-image/1090495926?adppopup=true">Nora Carol Photography/Getty Images</a></span></figcaption></figure><p>The Internal Revenue Service has postponed the April 15 tax filing deadline to May 17. If taxpayers need even more time to file federal returns, the agency added, they can request an extension until Oct. 15.</p>
<p>“This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities,” said <a href="https://www.irs.gov/newsroom/tax-day-for-individuals-extended-to-may-17-treasury-irs-extend-filing-and-payment-deadline">IRS Commissioner Chuck Rettig</a>.</p>
<p>The announcement may come as welcome news for many Americans, but it also raises an important question: Why should taxpayers have to navigate the tedious, costly tax filing system at all?</p>
<h2>The case for a ‘simple return’</h2>
<p>In 1985, President Ronald Reagan promised a “<a href="https://www.reaganlibrary.gov/archives/speech/address-nation-tax-reform-may-1985">return-free</a>” tax system in which half of all Americans would never fill out a tax return again. Under the framework, taxpayers with simple returns would automatically receive a refund or a letter detailing any tax owed. Taxpayers with more complicated returns would use the system in place today.</p>
<p>In 2006, President Barack Obama’s chief economist, Austan Goolsbee, premiered the “<a href="https://www.brookings.edu/research/the-simple-return-reducing-americas-tax-burden-through-return-free-filing/">simple return</a>,” where taxpayers would receive already completed tax forms for their review or correction. Goolsbee estimated his system would save taxpayers more than <a href="https://www.brookings.edu/research/the-simple-return-reducing-americas-tax-burden-through-return-free-filing/">US$2 billion a year in tax preparation fees</a>.</p>
<p>Though never implemented, the two proposals illustrate what we all know: <a href="https://www.pbs.org/newshour/show/dreading-taxes-countries-show-us-theres-another-way">No one enjoys filling out tax forms</a>. </p>
<p>So why do we have to?</p>
<h2>A costly and time-consuming system</h2>
<p>Return-free filing is not difficult. </p>
<p><a href="https://www.taxpolicycenter.org/briefing-book/what-other-countries-use-return-free-filing">At least 30 countries permit return-free filing</a>, including Denmark, Sweden, Spain and the United Kingdom.</p>
<p>Furthermore, 95% of American taxpayers receive more than <a href="https://www.irs.gov/businesses/small-businesses-self-employed/a-guide-to-information-returns">30 types of information returns</a> that let the government know their exact income. These information returns give the government everything it needs in order to <a href="https://www.washingtonpost.com/opinions/americans-shouldnt-be-responsible-for-filing-tax-returns--the-government-should/2017/03/30/e91d8cd8-0979-11e7-93dc-00f9bdd74ed1_story.html">fill out most taxpayers’ returns</a>.</p>
<p>The U.S. system <a href="https://www.theatlantic.com/business/archive/2016/03/the-10-second-tax-return/475899/">is 10 times more expensive</a> than tax systems in 36 other countries with robust economies. <a href="https://www.theatlantic.com/ideas/archive/2019/04/american-tax-returns-dont-need-be-painful/586369/">But those costs vanish in a return-free system, as would the</a> 2.6 billion hours Americans spend on tax preparation each year.</p>
<p>Maybe you’re wondering whether Congress is just behind the times, unaware that it can release us from tax preparation? Not true.</p>
<p>As an <a href="https://law-vbe.proxy.library.vanderbilt.edu/bio/beverly-moran">expert on the U.S. tax system</a>, I see America’s costly and time-consuming tax reporting system as a consequence of its relationship with the commercial tax preparation industry, which lobbies Congress to maintain the status quo. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/390500/original/file-20210318-21-hwb34s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="The UK permits return-free tax filing." src="https://images.theconversation.com/files/390500/original/file-20210318-21-hwb34s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/390500/original/file-20210318-21-hwb34s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=419&fit=crop&dpr=1 600w, https://images.theconversation.com/files/390500/original/file-20210318-21-hwb34s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=419&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/390500/original/file-20210318-21-hwb34s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=419&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/390500/original/file-20210318-21-hwb34s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=526&fit=crop&dpr=1 754w, https://images.theconversation.com/files/390500/original/file-20210318-21-hwb34s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=526&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/390500/original/file-20210318-21-hwb34s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=526&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The United Kingdom is among dozens of countries that permit return-free filing for some taxpayers.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/customs-and-revenue-self-assessment-notice-to-complete-a-news-photo/566442645?adppopup=true">Loop Images/Universal Images Group via Getty Images</a></span>
</figcaption>
</figure>
<h2>Commercial tax preparation</h2>
<p>Almost 20 years ago, Congress directed the IRS to provide low-income taxpayers with free tax preparation. The agency responded in 2002 with “<a href="https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free">Free File</a>,” a public-private partnership between the government and the tax preparation industry. As part of the deal, the IRS agreed to not <a href="https://www.wsj.com/articles/why-free-file-for-taxes-isnt-so-popular-1422633546">compete with the private sector</a> in the free tax preparation market. </p>
<p>In 2007, the House of Representatives rejected legislation to provide <a href="https://www.govtrack.us/congress/bills/110/hr3457/text">free, government tax preparation</a>. And in 2019, Congress tried to <a href="https://www.propublica.org/article/congress-scraps-provision-to-restrict-irs-from-competing-with-turbotax">legally bar the IRS</a> from ever providing free online tax preparation services. </p>
<p>Only a <a href="https://www.propublica.org/article/congress-scraps-provision-to-restrict-irs-from-competing-with-turbotax">public outcry turned the tide</a>.</p>
<p>The public part of Free File consists of the IRS herding taxpayers to commercial tax preparation websites. The private part consists of those commercial entities <a href="https://www.propublica.org/article/turbotax-just-tricked-you-into-paying-to-file-your-taxes">diverting taxpayers</a> toward costly alternatives. </p>
<p>According to the Treasury Inspector General for Tax Administration, which oversees IRS activities, private partners use computer code to <a href="https://www.theverge.com/2020/1/1/21045779/irs-turbotax-free-file-h-r-block-tax-preparation-new-rules">hide the free websites</a> and take unsuspecting taxpayers to paid sites. </p>
<p>Should a taxpayer discover a free preparation alternative, the private preparers <a href="https://www.treasury.gov/tigta/auditreports/2020reports/202040009_oa_highlights.html">impose various restrictions</a> such as income or the use of various forms as an excuse to kick taxpayers back to paid preparation. </p>
<p>Consequently, of the more than 100 million taxpayers eligible for free help, 35% end up paying for tax preparation and <a href="https://www.treasury.gov/tigta/auditreports/2020reports/202040009fr.pdf">60% never even visit the free websites</a>. Instead of 70% of Americans receiving free tax preparation, commercial <a href="https://www.politico.com/agenda/story/2018/07/18/tax-filing-congress-irs-000683/">companies whittle that percentage down to 3%</a>.</p>
<h2>Tax savings and evasion</h2>
<p>Perhaps you are guessing that there are valid policy justifications for avoiding government and empowering the private sector. Judge those arguments yourself.</p>
<p>One argument from commercial tax preparers is that taxpayers will <a href="https://www.nbcnews.com/business/taxes/turbotax-h-r-block-spend-millions-lobbying-us-keep-doing-n736386">miss out on valuable tax savings</a> if they rely on free government preparation.</p>
<p>In fact, the government software would reflect the same laws used by the paid preparers with the same access to tax saving deductions or credits. Further, tax preparers like H & R Block promise to pay <a href="https://www.hrblock.com/guarantees/">all taxes and interest resulting from a failed audit</a>. As a result, these services have every incentive to take conservative, pro-government tax positions.</p>
<p>A second argument is that government-prepared tax returns encourage tax evasion. </p>
<p>In a no-return system, the <a href="https://www.forbes.com/sites/joshbarro/2012/04/17/why-doesnt-the-irs-do-your-taxes-for-you/?sh=8e43a542fb63">government reveals its knowledge of the taxpayer’s income</a> before the taxpayer files. Thus, the argument goes, the taxpayer knows if the government has missed something and has reason to let the mistake stand.</p>
<p>But taxpayers already know what information forms the government has because they receive duplicates of those forms. The incentive to lie does not increase because the taxpayer avoids weeks of tax preparation.</p>
<p>[<em>You’re smart and curious about the world. So are The Conversation’s authors and editors.</em> <a href="https://theconversation.com/us/newsletters/weekly-highlights-61?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=weeklysmart">You can get our highlights each weekend</a>.]</p>
<h2>Bolstering the anti-taxers</h2>
<p>Finally, there is the anti-tax argument for onerous tax preparation: Keep tax preparation unpleasant to fuel anti-tax sentiment. </p>
<p>In the past, Republicans argued against high taxes. But after decades of tax cuts, Americans are <a href="https://www.theatlantic.com/ideas/archive/2019/04/american-tax-returns-dont-need-be-painful/586369/">no longer swayed by that argument</a>.</p>
<p>Exasperating tax preparation, according to this argument, helps keep the anti-tax fever high. And that <a href="https://slate.com/business/2012/04/grover-norquist-and-h-r-block-the-unholy-alliance-of-tax-prep-firms-and-conservative-activists-to-make-your-taxes-even-more-complicated.html">fuels public hate for government</a> and the tax system.</p>
<p>Unfortunately, the anti-tax contingent’s desire to force Americans to spend time and money on tax preparation dovetails with the tax preparation industry’s <a href="https://www.nytimes.com/2015/04/16/technology/personaltech/turbotax-or-irs-as-tax-preparer-intuit-has-a-favorite.html">desire to collect billions</a> of dollars in fees. </p>
<p><a href="https://www.latimes.com/business/hiltzik/la-fi-hiltzik-turbotax-lawsuit-20190506-story.html">Tax preparation companies lobby Congress</a> to keep <a href="https://itep.org/turbotax-is-a-case-study-for-why-the-irs-should-administer-free-file-program/">tax preparation costly and complicated</a>.</p>
<p>Indeed, Intuit, maker of TurboTax, the tax preparation software, lists government tax preparation as a <a href="https://www.marketplace.org/2017/10/12/tax-preparation-government-free">threat to its business model</a>.</p>
<p>One example is the <a href="https://www.nerdwallet.com/article/taxes/can-you-take-earned-income-tax-credit">earned income tax credit</a>, a government program for low-income people. The credit is so complicated that <a href="https://www.taxpolicycenter.org/briefing-book/do-all-people-eligible-eitc-participate">20% of the people who are eligible never file</a>. </p>
<p>If the government prepared people’s tax returns, that 20% would <a href="https://itep.org/turbotax-is-a-case-study-for-why-the-irs-should-administer-free-file-program/">receive government support</a>. Nonetheless, Intuit has lobbied lawmakers to make the credit more complicated, thereby driving more taxpayers to paid preparation services.</p>
<p>To date, the tax preparation industry has kept the system complicated because the potential cost to it in terms of lost revenue is vast.</p>
<p>Only public outcry can change the system.</p><img src="https://counter.theconversation.com/content/156733/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Beverly Moran does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Dozens of prosperous countries save billions of dollars and hours annually by not requiring residents to fill out tax returns, so what is the United States waiting for?Beverly Moran, Professor Emerita of Law, Vanderbilt UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1479672020-10-30T12:45:51Z2020-10-30T12:45:51ZIs tax avoidance ethical? Asking for a friend<figure><img src="https://images.theconversation.com/files/366279/original/file-20201028-15-1n06ns6.jpg?ixlib=rb-1.1.0&rect=0%2C742%2C4768%2C2519&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Smart or unethical? What does philosophy say about avoiding taxes?</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/president-donald-trump-speaks-about-the-tax-reform-news-photo/891748036?adppopup=true">SAUL LOEB/AFP via Getty Images</a></span></figcaption></figure><p>Personal taxes <a href="https://www.usatoday.com/story/news/politics/elections/2020/10/23/debate-transcript-trump-biden-final-presidential-debate-nashville/3740152001/">featured heavily in the final presidential debate</a> before the Nov. 3 election.</p>
<p>While Joe Biden boasted of releasing “22 years of tax returns,” President Donald Trump addressed reports that he paid as little as <a href="https://www.nytimes.com/2020/09/29/us/trump-750-taxes.html">$750 in annual federal taxes</a>. “I prepaid millions and millions of dollars,” he countered. It was a different strategy from four years earlier, when Trump in a debate against Hillary Clinton <a href="https://www.cnn.com/2016/09/26/politics/donald-trump-federal-income-taxes-smart-debate/index.html">declared himself “smart</a>” for not paying taxes.</p>
<p>Though there is general public consensus on the illegality of tax evasion – the act of deliberately not paying taxes that are due – much more variance exists in how the public evaluates and scrutinizes public leaders’ tax avoidance strategies that seek to minimize the amount an individual pays through legal loopholes. A <a href="https://de.reuters.com/article/uk-usa-election-poll/trump-calls-tax-avoidance-smart-most-americans-call-it-unpatriotic-poll-idUKKCN1242FY">poll taken just before the 2016 election</a> found that nearly half of Americans agreed with Trump that paying no taxes is “smart.” But two-thirds said it is “selfish” and 61% declared it to be “unpatriotic.”</p>
<h2>Rights and responsibilities</h2>
<p>As a <a href="https://www.unomaha.edu/college-of-business-administration/college-profile-and-directory/bass-erin.php">scholar who studies business ethics</a>, I see these differences in how individuals view tax avoidance as being dependent on a person’s <a href="https://www.wiley.com/en-us/Managing+Business+Ethics%3A+Straight+Talk+about+How+to+Do+It+Right%2C+7th+Edition-p-9781119194309">ethical foundations</a>. Ethical foundations are the principles, norms and values that guide individual or group beliefs and behaviors. They can shape what people <a href="https://doi.org/10.1016/B978-0-12-407236-7.00002-4">believe is important</a> – such as fairness, care for oneself or others, loyalty and liberty – and guide judgments about what is right, or ethical, and what is wrong, or unethical.</p>
<p>Philosophers have debated these ethical foundations for centuries, coming up broadly with three different perspectives that are worth exploring in the context of tax avoidance strategies.</p>
<p>Thinkers from <a href="https://plato.stanford.edu/entries/kant/">Immanuel Kant</a> to <a href="https://plato.stanford.edu/entries/rawls/">John Rawls</a> have offered what has been called the <a href="http://doi.org/10.1007/s10551-013-1963-0">deontological</a> argument. This emphasizes ethics based on adherence to rules, regulations, laws and norms. Such an approach suggests that “what is right” is defined as that which is most in line with an individual’s responsibility and duty toward society.</p>
<p>Meanwhile, utilitarian philosophers such as <a href="https://plato.stanford.edu/entries/mill/">John Stuart Mill</a> and <a href="https://plato.stanford.edu/entries/bentham/">Jeremy Bentham</a> put forward an argument that recognizes the costs and benefits, or even trade-offs, in pursuing what is right. Under this belief system, called <a href="http://doi.org/10.1007/s10551-013-1963-0">consequentialism</a>, behaviors are ethical if the outcome is beneficial to the greatest number of people, even if it comes at a cost.</p>
<p>A third perspective comes in the shape of what is called the <a href="http://doi.org/10.1007/s10551-013-1963-0">virtue ethical foundation</a> that is associated with <a href="https://plato.stanford.edu/entries/aristotle/">Aristotle</a> and other Greek philosophers. This suggests that what is right is that which elevates the individual’s virtues and efforts toward moral excellence – defined by both avoiding vices and striving to do good. In this way, ethical behavior is that which enables the individual to achieve his or her most excellent moral self. </p>
<p>[<em><a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=experts">Expertise in your inbox. Sign up for The Conversation’s newsletter and get expert takes on today’s news, every day.</a></em>]</p>
<h2>On morals and money</h2>
<p>When applied to the tax avoidance strategies of individuals, each perspective offers a unique understanding of what is right. </p>
<p>An individual who adopts the deontological perspective likely evaluates a public leader’s tax avoidance strategies – and that of others – with less scrutiny. As long as an individual follows the tax code, and acts legally, the tax avoidance strategies are likely to be viewed as ethical. </p>
<p>In contrast, a consequentialist is likely to evaluate tax avoidance strategies by also looking at how those taxes could have been used to benefit society – by paying for schools and hospitals, for example. When one individual – be it Trump or any other person – avoids taxes, it increases the costs experienced by everyone else while also decreasing the benefits experienced by society as a whole. However, the cost to society in terms of lesser funding for programs and services supported by tax dollars may be even greater when a wealthy individual avoids taxes, given what is likely a highter tax responsibility than that of individuals with modest incomes. Thus, consequentialist individuals may well conclude that tax avoidance strategies are unethical.</p>
<p>An individual who adopts the virtue perspective of Aristotle might evaluate tax avoidance strategies in the context of an individual’s other virtuous behaviors. If someone avoids taxes but provides financial support to other institutions or entities that are meaningful to the tax avoider but also produce benefits for society, then the virtuous individual may view this behavior with less disdain. For example, someone may use tax avoidance strategies and direct some wealth to provide funding directly to an academic health care center for cancer research. But if that person employs tax avoidance strategies in the absence of any other virtuous behaviors, then the tax avoidance is likely to be seen as unethical.</p>
<h2>Social influencers</h2>
<p>So whether tax avoidance strategies are ethical depends on the ethical foundations of the person judging such actions.</p>
<p>But when it comes to Trump and other public figures, there is an additional ethical concern at play here. <a href="https://doi.org/10.2307/41166057">Public leaders are evaluated</a> not just on their own personal morality, but also by what influence their behaviors could have on others. If a public leader avoids taxes, it might signal to the public to do the same, which could have greater consequences. </p>
<p>As such, the question of whether tax avoidance strategies are ethical depends not only on an individual’s ethical foundation, but also on the individual’s ability, and desire, to influence others to do the same.</p><img src="https://counter.theconversation.com/content/147967/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Erin Bass does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Wriggling out of paying taxes may be legal, but is it right? Aristotle, Immanuel Kant – and others – have their say.Erin Bass, Associate Professor of Management, University of Nebraska OmahaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1473422020-10-28T12:22:33Z2020-10-28T12:22:33ZTrump’s ultra-low tax bills are what happens when government tries to make policy through the tax code<figure><img src="https://images.theconversation.com/files/365632/original/file-20201026-21-jv1ly0.jpg?ixlib=rb-1.1.0&rect=65%2C32%2C3576%2C2014&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The tax code can feel like a labyrinth.
</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/hedge-maze-in-barcelona-royalty-free-image/463203147">Marcel Germain/Moment via Getty Images</a></span></figcaption></figure><p>People tend to have one of two reactions to the revelation that President Donald Trump has paid little to no taxes in recent years: He’s either an <a href="https://www.nytimes.com/2020/10/10/opinion/sunday/trump-taxes.html">amoral tax cheat</a> or <a href="https://www.cnbc.com/2016/09/26/trump-brags-about-not-paying-taxes-that-makes-me-smart.html">he’s smart</a>.</p>
<p>To me, it reveals just how much is wrong with the U.S. tax code, which Congress treats as a sort of <a href="https://www.amazon.com/Fine-Mess-Global-Simpler-Efficient/dp/0143111140/ref=sr_1_1?dchild=1&keywords=tr+reid+a+fine+mess&qid=1601908367&sr=8-1">policy Swiss Army knife</a> to deal with innumerable desired social and economic policy goals, from <a href="https://www.nerdwallet.com/blog/mortgages/how-to-get-the-most-out-of-real-estate-tax-deductions/">homeownership</a> to protecting the <a href="https://legislature.maine.gov/statutes/36/title36sec4303.html">Maine blueberry industry</a>. </p>
<p><a href="https://scholar.google.com/citations?user=rmtYVssAAAAJ&hl=en&oi=ao">I teach</a> a course on “the politics of taxes,” in which we examine how politics shapes tax policy in the United States and other countries – as well as how taxation affects politics. My students are consistently struck by the extent to which Congress uses taxes as its <a href="https://www.routledge.com/Tax-Politics-and-Policy/Thom/p/book/9781138183391">default go-to policy lever</a>. </p>
<p>It wasn’t supposed to be this way.</p>
<h2>The tax code takes over</h2>
<p>In principle, the main function of taxation is to fund the government. But in practice, Congress also uses it to tackle challenges in virtually every policy area, from promoting conservation and charitable giving to encouraging entrepreneurship and ensuring steady business revenue. </p>
<p>All of these policies, however sound they made be individually, make the income tax system <a href="https://www.pewresearch.org/politics/2017/04/14/top-frustrations-with-tax-system-sense-that-corporations-wealthy-dont-pay-fair-share">more complicated for ordinary taxpayers</a> and creates a vast array of means by which some wealthy people <a href="https://www.jct.gov/CMSPages/GetFile.aspx?guid=fe7080a8-5a54-48e6-8cc0-ee243fc03236">can reduce their tax payments</a> to levels that feel unfair to many voters. They also, ultimately, aren’t a very good way to reach achieve the policy’s explicit goals. </p>
<p>This convoluted system <a href="https://review.chicagobooth.edu/public-policy/2018/article/why-it-s-so-hard-simplify-tax-code">was thus not created in a big bang of malfeasance</a> or ineptitude but mostly through piecemeal changes that increasingly complicated the tax code. Legislative reforms meant to simplify the tax code, such as those passed in 1986 and <a href="https://www.brookings.edu/blog/up-front/2019/09/25/a-fixable-mistake-the-tax-cuts-and-jobs-act">2017</a>, have accomplished little. </p>
<p>“The result of this process is a set of very complex provisions that appear to have no overall logic if the tax law were being designed from scratch,” as the <a href="https://www.taxpolicycenter.org/briefing-book/why-are-taxes-so-complicated">nonpartisan Tax Policy Center put it</a>. </p>
<p>This complexity has a range of negative impacts. </p>
<p>For example, estimates vary but most suggest <a href="https://bipartisanpolicy.org/wp-content/uploads/2019/04/Tax-Administration-Compliance-Complexity-Capacity.pdf">taxpayers likely pay well over US$100 billion</a> a year in time and money filing their taxes each year – known as <a href="https://onlinebusiness.northeastern.edu/blog/what-is-tax-compliance/">tax compliance</a>. The <a href="https://www.americanactionforum.org/research/tax-day-2019-little-impact-on-compliance-costs-from-tcja-so-far">2017 Tax Cuts and Jobs Act</a> does not appear to have reduced compliance costs despite its emphasis on simplifying the 1040 tax form. </p>
<p>And it’s a lot worse than in other rich countries.</p>
<p>The average American <a href="https://www.jct.gov/CMSPages/GetFile.aspx?guid=fe7080a8-5a54-48e6-8cc0-ee243fc03236">spends about 13 hours</a> filing their taxes each year, according to the Joint Committee on Taxation, <a href="https://www.theatlantic.com/ideas/archive/2019/04/american-tax-returns-dont-need-be-painful/586369/">compared with under an hour</a> in the Netherlands, Japan and Estonia. In Sweden, the government fills in the tax forms automatically, and <a href="https://www.washingtonpost.com/news/monkey-cage/wp/2018/04/12/why-the-u-s-tax-system-is-so-complicated-but-americans-are-proud-to-pay-taxes-anyway/">citizens can simply view and approve them</a> – or make changes – on their cellphone. </p>
<p>Another result is that social welfare programs in the U.S. can be needlessly complicated. </p>
<p>For example, Canada <a href="https://www.pri.org/stories/2019-02-05/what-we-can-learn-canada-s-universal-child-care-model">provides its citizens</a> with cheap child care simply by subsidizing it so that it costs $6 a day. Instead of offering subsidies, the U.S. supports lower- and middle-income parents mainly through the <a href="https://www.cbpp.org/research/federal-tax/eitc-and-child-tax-credit-promote-work-reduce-poverty-and-support-childrens">tax code with credits</a> like the earned income tax credit and the child tax credit. But both are very complicated, poorly understood and <a href="https://www.eitc.irs.gov/partner-toolkit/basic-marketing-communication-materials/eitc-fast-facts/eitc-fast-facts">often do not reach those who need it</a>. </p>
<figure class="align-center ">
<img alt="President Donald Trump listens during a White House meeting with Hispanic leaders on July 9 in Washington." src="https://images.theconversation.com/files/366176/original/file-20201028-15-eb5fon.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/366176/original/file-20201028-15-eb5fon.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=379&fit=crop&dpr=1 600w, https://images.theconversation.com/files/366176/original/file-20201028-15-eb5fon.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=379&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/366176/original/file-20201028-15-eb5fon.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=379&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/366176/original/file-20201028-15-eb5fon.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=476&fit=crop&dpr=1 754w, https://images.theconversation.com/files/366176/original/file-20201028-15-eb5fon.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=476&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/366176/original/file-20201028-15-eb5fon.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=476&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Trump has refused to release his tax returns since the 2016 election.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/TrumpTaxes/7544c40ad3424449aeee05c552e21280/photo?Query=trump%20AND%20tax&mediaType=photo,video,graphic,audio&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=2654&currentItemNo=58">AP Photo/Evan Vucci</a></span>
</figcaption>
</figure>
<h2>How Trump takes advantage</h2>
<p>Complexity also means that <a href="https://wwnorton.com/books/9781324002727">the tax code is littered with opportunities for wealthier taxpayers</a> like Trump to reduce their tax bill quite substantially. The perception that there are loopholes that only the rich can use <a href="https://www.pewresearch.org/politics/2017/04/14/top-frustrations-with-tax-system-sense-that-corporations-wealthy-dont-pay-fair-share">leads many taxpayers to view the system as unfair</a>. </p>
<p>Three of the strategies The Times reported that Trump has used to avoid taxes demonstrate this quite well. </p>
<p>In 2006, lawmakers wanted to promote conservation while helping farmers and ranchers, so <a href="https://www.propublica.org/article/conservation-easements-the-billion-dollar-loophole">they expanded conservation easements</a>, in which property holders agree to not develop land in exchange for a tax deduction. Trump used this <a href="https://www.irs.gov/charities-non-profits/conservation-easements">frequently abused</a> provision to claim a <a href="https://www.washingtonpost.com/politics/trump-got-a-21-million-tax-break-for-saving-the-forest-outside-his-ny-mansion-now-the-deal-is-under-investigation/2020/10/07/de84c1ba-ff6b-11ea-830c-a160b331ca62_story.html">$21.1 million deduction</a> in 2015 for not developing land near his Seven Springs estate that his family wanted to use as a private retreat anyway. </p>
<p>Another example is <a href="https://www.taxlawforchb.com/2017/07/abandonment-of-a-partnership-interest-or-when-a-taxpayer-rejects-its-tax-return-position/">how U.S. tax policy allows individuals to walk away</a> from an investment and, if they receive nothing, declare any losses that haven’t yet been taken on their current tax return, reducing income by that amount. The policy aim here is to encourage entrepreneurship by not making business failure too onerous.</p>
<p>Trump <a href="https://www.nytimes.com/interactive/2020/09/27/us/donald-trump-taxes.html">used this abandonment rule</a> in 2009 to declare more than $700 million in losses when he walked away from his Atlantic City casinos. Yet it appears he got something in exchange for walking way – stock in a new company – which means he may have technically violated the rules of that tax break. </p>
<p>And in 2009, Congress <a href="https://www.paulhastings.com/docs/default-source/PDFs/1444.pdf">wanted to help businesses recover</a> from the financial crisis so it made it easier to use the large losses that many companies were experiencing to offset income earned in prior years, which resulted in refunds for taxes already paid. <a href="https://www.nytimes.com/interactive/2020/09/27/us/donald-trump-taxes.html">This allowed Trump</a> to claim a refund of $56.9 million he had paid in taxes in 2005 and 2006. </p>
<p>[<em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>.]</p>
<p>The government has ways other than tax code to implement a policy with a social or economic aim, such as via regulations or spending on a new or existing government program. Lawmakers have often preferred to use the tax code because it can seem easier and avoids the political costs associated with <a href="http://www.artsrn.ualberta.ca/econweb/landon/CJE1997.pdf">higher taxes</a>. </p>
<p>Ultimately, however, <a href="https://fas.org/sgp/crs/misc/R44530.pdf">research shows</a> using tax code is not the best way to achieve a policy’s ends.</p><img src="https://counter.theconversation.com/content/147342/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Winslett does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Congress tends to use the tax code to implement policy, which increases complexity and creates loopholes wealthy taxpayers like Trump can exploit.Gary Winslett, Assistant Professor, MiddleburyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1473132020-10-06T18:55:00Z2020-10-06T18:55:00ZTrump’s decade-old audit illustrates why the IRS targets the working poor as much as the rich<figure><img src="https://images.theconversation.com/files/361987/original/file-20201006-24-y76qo3.jpg?ixlib=rb-1.1.0&rect=118%2C65%2C4256%2C2846&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Trump has tried to keep his taxes in the dark for years. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/president-donald-trump-acknowledges-the-crowd-during-the-news-photo/1149899043">Alex Wong/Getty Images</a></span></figcaption></figure><p>The New York Times’ exclusive on President Donald Trump’s taxes contains <a href="https://www.nytimes.com/interactive/2020/09/27/us/donald-trump-taxes.html">a lot of startling new findings</a>. </p>
<p>A few noteworthy examples: He paid only US$750 in federal income tax in 2016 and 2017 – and nothing at all in 10 of the previous 15 years; he took massive income tax deductions for property tax payments on a New York estate he apparently uses for personal reasons; he paid consulting fees to family members; and he took $70,000 in business deductions for haircuts. </p>
<p>The report also zeroed in on a fact that has been well known for many years yet in my mind overshadows all of the other discoveries: Trump’s taxes are under audit and <a href="https://www.marketwatch.com/story/president-trump-has-faced-a-decade-long-audit-of-his-taxes-heres-how-long-irs-audits-usually-take-2020-10-01">have been so since at least 2011</a>. Trump claims that’s why he can’t release his taxes, though the <a href="https://www.axios.com/trump-tax-returns-irs-commissioner-audit-20ebb0a7-dc47-4177-bf4c-565aa5cfb734.html">IRS itself says that’s not the case</a>. <a href="https://www.cnn.com/2020/09/30/politics/donald-trump-tax-returns-1st-debate-new-york-times/index.html">He also says</a> he has paid “millions of dollars” in taxes in recent years. </p>
<p>Why is it taking so long to audit Trump’s taxes, when the IRS <a href="https://www.irs.gov/pub/irs-pdf/p55b.pdf">usually wraps up its audits</a> within a year? </p>
<p>As a <a href="https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=1997162">tax law expert</a>, I believe a reason Trump’s audit is taking so long is related to the IRS’s practice of targeting the working poor at rates comparable to the wealthy. It’s hard to reel in the rich and often easier to focus on the poor. </p>
<h2>The gray areas of tax law</h2>
<p>Tax law is often perceived as an exercise in crunching the numbers. The taxpayer – or an accountant – simply plugs in data from her various W-2s and 1099s, and out comes a figure. Some tax preparation services even show the taxpayer the real-time effect of each entry on the amount of tax owed.</p>
<p>In reality, tax law has plenty of gray areas, particularly for business owners, in which tax law depends on subjectively judging why a person did what he or she did.</p>
<p>When someone acts for business reasons, they should be able to deduct their expenses. As the saying goes, “You have to spend money to make money.” The federal income tax is a net income tax, meaning it respects that old saying and applies only to earnings that exceed costs. If someone is acting for personal reasons like consumption or leisure, a tax deduction is generally not allowed.</p>
<p>Uncovering the motives behind the activities of any person requires a lot of information and difficult analysis, but for someone like Trump, whose personality is his business, the task is exponentially harder.</p>
<p>For instance, is Trump’s Seven Springs estate in New York business or personal property? If it’s for business, property taxes paid on it are fully deductible. If it’s personal property, only $10,000 of the property taxes could be deducted, thanks to Trump’s own <a href="https://taxfoundation.org/tax-reform-explained-tax-cuts-and-jobs-act/">Tax Cuts and Jobs Act</a> of 2017. The answer depends on a lot of factors, such as how he promotes the property, what types of improvements he makes and what he does while there. Despite some contradictory statements from his sons, The New York Times suggests that Trump <a href="https://www.nytimes.com/interactive/2020/09/27/us/donald-trump-taxes.html">has treated the Seven Springs estate as business property</a>, which would allow him to fully deduct the taxes on the estate.</p>
<p>Another gray area is the $26 million he claims in consulting fees, including ones reportedly paid to family members such as his daughter Ivanka. To determine if consulting fees paid to a family member are actually nondeductible gifts, the IRS must examine what she was asked to do and whether the fees were reasonable. It is unclear from The New York Times story what exactly Ivanka was tasked with doing to earn the almost $750,000 in fees Trump deducted.</p>
<p>As for Trump’s $70,000 in haircuts, to determine if they were deductible, the IRS must understand whether they were unique to his job on “The Apprentice.” Inherently personal expenses – <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3705646">things like grooming, meals and commuting</a> – are incredibly difficult to deduct. Trump would have to demonstrate that his business motives completely outweighed his personal ones. In other words, he would have to show that he would not have gotten haircuts but for his business. Since he deducted the cuts, we can presume his hair would have gone unkempt without the show.</p>
<figure class="align-center ">
<img alt="Treasury Secretary Steven Mnuchin testifies during a House Financial Services Committee on May 22, 2019. A screen behind him displays President Trump and a list of times he has promised to release his tax returns." src="https://images.theconversation.com/files/361988/original/file-20201006-18-uiexi0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/361988/original/file-20201006-18-uiexi0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=426&fit=crop&dpr=1 600w, https://images.theconversation.com/files/361988/original/file-20201006-18-uiexi0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=426&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/361988/original/file-20201006-18-uiexi0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=426&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/361988/original/file-20201006-18-uiexi0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=535&fit=crop&dpr=1 754w, https://images.theconversation.com/files/361988/original/file-20201006-18-uiexi0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=535&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/361988/original/file-20201006-18-uiexi0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=535&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Trump has repeatedly promised to release his tax returns, a point raised during Treasury Secretary Steven Mnuchin’s House testimony in May 2019.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/treasury-secretary-steven-mnuchin-testifies-during-a-house-news-photo/1150961593">Mark Wilson/Getty Images</a></span>
</figcaption>
</figure>
<h2>Easier targets</h2>
<p>Compounding the difficulty of sorting out these gray areas, the IRS is <a href="https://www.npr.org/2020/04/09/830159777/irs-budget-cuts-and-staffing-challenges-create-coronavirus-payment-headaches">operating on a shoestring budget</a>, despite research showing that <a href="https://www.cbo.gov/budget-options/2018/54826">a dollar of investment in the IRS yields more than a dollar in tax collections</a>. Auditors must stretch their budgets to uncover the information they need and then make difficult judgment calls.</p>
<p>The IRS’s limited resources mean that <a href="https://www.documentcloud.org/documents/6430680-Document-2019-9-6-Treasury-Letter-to-Wyden-RE.html">auditors end up focusing their attention</a> on cases with more straightforward issues and more accessible information. That’s why <a href="https://www.cbpp.org/research/federal-tax/policy-basics-the-earned-income-tax-credit">lower-income individuals receiving the earned income tax credit</a> were audited at a 1.2% rate in 2016, <a href="https://www.irs.gov/pub/irs-pdf/p55b.pdf">the most current year of mostly complete data</a>, comparable to the audit rate of roughly 1.5% for individuals earning over $500,000.</p>
<p>Typically, EITC audits are resolved within a year. That’s because examiners can look for objective facts, such as how many children are in the home, rather than sorting out subjective motives behind expenses. Often computers can quickly flag errors, making for more open-and-shut cases. </p>
<p>In addition, as my research has shown, state and federal governments already have <a href="https://scholarship.richmond.edu/law-faculty-publications/1435/">a lot of information about individuals receiving public assistance</a>, such as the earned income tax credit. Auditors don’t have to spend their limited resources getting information out of EITC recipients.</p>
<p>While auditing the poor may be easier than targeting the rich, auditing wealthier individuals is likely to do much more to close the tax gap – the difference between what is owed to Uncle Sam and what is actually collected – which the <a href="https://www.taxpolicycenter.org/briefing-book/what-tax-gap">IRS most recently estimated at about $381 billion</a>. Because <a href="https://www.irs.gov/pub/irs-pdf/p5364.pdf">most misreported income comes from cases</a> where the taxpayer alone controls the information about the income, the IRS might collect more underpayments if it had more resources for auditing the rich. </p>
<p>[<em>Understand new developments in science, health and technology, each week.</em> <a href="https://theconversation.com/us/newsletters/science-editors-picks-71/?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=science-understand">Subscribe to The Conversation’s science newsletter</a>.]</p>
<h2>Letting the big fish go</h2>
<p><a href="https://www.irs.gov/newsroom/taxpayer-bill-of-rights-8-the-right-to-confidentiality-0">Taxpayer privacy protections</a> make it impossible to know exactly why Trump is being audited. But the difficulty of sorting out these gray areas of law while Trump holds most of the relevant information almost certainly has contributed to the length of the audit.</p>
<p>If nothing else, the reporting on Trump’s taxes highlights that taxpayers like him are the biggest fish but the hardest to catch, particularly when you have a cheap rod. IRS audits have instead focused on smaller fish downstream.</p><img src="https://counter.theconversation.com/content/147313/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hayes Holderness does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Because the rich often have complicated deductions that dabble in the gray areas of tax law, it’s simply easier to audit the straightforward taxes of the working poor.Hayes Holderness, Assistant Professor of Law, University of RichmondLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1425332020-07-13T11:51:10Z2020-07-13T11:51:10ZHow to stay honest when filing taxes in a pandemic year<figure><img src="https://images.theconversation.com/files/346925/original/file-20200710-189212-jw4x6j.jpg?ixlib=rb-1.1.0&rect=28%2C34%2C2067%2C1317&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Filing taxes during coronavirus times.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/woman-filling-online-tax-form-wearing-face-mask-and-royalty-free-image/1215490527?adppopup=true">Drazen/ E+ via Getty Images</a></span></figcaption></figure><p>Many in the U.S. will be filing their personal income tax returns in the next few days, as the deadline to do so was pushed from April 15 to July 15 due to the COVID-19 epidemic. </p>
<p>With <a href="https://thehill.com/policy/finance/501120-nearly-half-of-americans-have-lost-income-over-coronavirus">almost half</a> of those in the U.S. having lost at least some employment income due to the virus, the 2020 tax season may bring more personal and financial stress than usual. </p>
<p>As a result, there could also be a moral struggle going on about whether to be honest about one’s taxable income. Exaggerating one’s donation to Goodwill, for example, or failing to report freelance earnings could lower a taxpayer’s burden.</p>
<p>Each year many people do cheat on their taxes. According to <a href="http://fortune.com/2016/04/29/tax-evasion-cost/">findings</a> released by the Internal Revenue Service in 2016, tax evasion costs the federal government over US$450 billion each year. The IRS <a href="https://www.brookings.edu/blog/up-front/2019/04/09/how-big-is-the-problem-of-tax-evasion/">estimates</a> that for every $6 owed in taxes to the federal government, one dollar is not paid.</p>
<p>As a <a href="https://www.christianbmiller.com/">philosopher</a> whose <a href="https://global.oup.com/academic/product/the-character-gap-9780190264222?cc=us&lang=en&">research</a> focuses on character and ethics, I can say that there isn’t much controversy on this issue. Cheating is generally considered morally wrong – and that includes cheating on one’s taxes. </p>
<p>So, how can people stay honest this tax season? </p>
<h2>We want to consider ourselves honest people</h2>
<p>First let’s dive into the recent psychological research on cheating.</p>
<p>Researcher <a href="https://www.london.edu/faculty-and-research/faculty/profiles/s/shu-l-1#.WrucVdXwZ-U">Lisa Shu</a> and her colleagues published a <a href="https://www.ncbi.nlm.nih.gov/pubmed/21307176">study</a> in 2011 in which participants were given a test with 20 problems for which they would be paid $0.50 per correct answer. Their answers were checked by a person in charge, and they were paid accordingly. </p>
<p>[<em><a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=experts">Expertise in your inbox. Sign up for The Conversation’s newsletter and get expert takes on today’s news, every day.</a></em>]</p>
<p>This part of the experiment was pretty straightforward. There was no opportunity to cheat.</p>
<p>Then the researchers changed the setup a bit. The participants were told that they would be the ones grading their answers, with no one checking on them. The financial incentive and the test remained the same. They were also told that their paperwork would be shredded and they could report their own scores. </p>
<p>Here’s what happened: In the first setup, participants averaged about eight correct answers. In the second setup where there was ample opportunity to cheat, the number of “correct” answers jumped to 13.22.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/212480/original/file-20180328-109169-uicoi0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/212480/original/file-20180328-109169-uicoi0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/212480/original/file-20180328-109169-uicoi0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/212480/original/file-20180328-109169-uicoi0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/212480/original/file-20180328-109169-uicoi0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/212480/original/file-20180328-109169-uicoi0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/212480/original/file-20180328-109169-uicoi0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Researchers have found that moral reminders can stop people from cheating.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/cheat-sheet-written-hand-schoolboy-student-417465649?src=qiy3z0sIcXMYVYZ0kLrFSQ-1-13">Roman Pelesh/Shutterstock.com</a></span>
</figcaption>
</figure>
<p>This finding and other published results like them provide an important lesson about the <a href="http://danariely.com/books/the-honest-truth-about-dishonesty/">psychology of cheating</a>: When people think they can get away with cheating, and they also think it would be worthwhile to cheat, they may well do so. </p>
<p>Using the same basic framework as Shu’s study, other research has since added some interesting variations to this experiment. For instance, in one study the participants were college students who first had to <a href="http://journals.ama.org/doi/abs/10.1509/jmkr.45.6.633?code=amma-site">sign their school’s honor code</a> before they began. Did that make any difference?</p>
<p>Researchers found the average number of problems solved correctly was essentially the same as when participants had no opportunity to cheat and their answers were graded by someone else.</p>
<p>Psychologists have <a href="http://journals.ama.org/doi/abs/10.1509/jmkr.45.6.633?code=amma-site">provided an explanation</a> for what is happening here. While people often want to cheat in certain cases if it would benefit them, they also want to think of themselves as honest. What the honor code did in the experiment was to serve as a moral reminder of the importance of being honest. </p>
<p>Other studies of cheating have found that even subtle reminders can be effective in deterring dishonest behavior. In one, from 2013, <a href="https://www.ncbi.nlm.nih.gov/pubmed/23127418">cheating continued</a> even when the instructions said, “Please don’t cheat. … Even a small amount of cheating would undermine the study.” However, when researchers changed the wording for a second group, people did not cheat. This group was told: “Please don’t be a cheater. … Even a small number of cheaters would undermine the study.” </p>
<p>The switch to “cheater” called to mind how the participants wanted to think of themselves as honest. Perhaps most fascinating of all, psychologists stopped study participants from cheating simply by having them <a href="https://www.sciencedirect.com/science/article/pii/009265667690088X">sit in front of a mirror</a> when taking the test.</p>
<p>A moral reminder, in other words, makes it more difficult for most people to cheat.</p>
<h2>What can you do to stay honest</h2>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/212482/original/file-20180328-109175-13k0b1s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/212482/original/file-20180328-109175-13k0b1s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/212482/original/file-20180328-109175-13k0b1s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/212482/original/file-20180328-109175-13k0b1s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/212482/original/file-20180328-109175-13k0b1s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/212482/original/file-20180328-109175-13k0b1s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/212482/original/file-20180328-109175-13k0b1s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">How can you stay honest?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/close-businessman-partner-using-calculator-laptop-641524333?src=fwN5UMw5iT4Ax94pLJBtCg-1-12">Natee Meepian/Shutterstock.com</a></span>
</figcaption>
</figure>
<p>Returning to the unique challenges facing taxpayers this year with COVID-19, the question is how people can stay honest rather than bending the truth to lessen their tax burden. Based on the research mentioned here, I would suggest three practical steps:</p>
<ul>
<li><p>Use tangible moral reminders. They can be as simple as a Post-it Note on your computer telling you to be honest. You could also read a passage from a religious text or a different source of moral inspiration before turning to your tax returns.</p></li>
<li><p>If possible, do your taxes alongside someone you trust. With that accountability, it is harder to give into temptation to cheat. We want to think of ourselves as honest – and we want other people to think of us as honest, too.</p></li>
<li><p>Consider: What would your moral heroes in life tell you to do?</p></li>
</ul>
<p>We shouldn’t cheat on our taxes, not because we necessarily care about the IRS, but because we care about being people of honesty and integrity.</p>
<p><em>This is an updated version of a piece <a href="https://theconversation.com/how-to-stay-honest-this-tax-season-92706">first published</a> on March 29, 2018.</em></p><img src="https://counter.theconversation.com/content/142533/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christian B. Miller receives funding from the John Templeton Foundation. </span></em></p>As people file their taxes in a year where many are going through financial hardships brought on by COVID-19, a scholar argues that cheating on one’s taxes would still be morally wrong.Christian B. Miller, A.C. Reid Professor of Philosophy, Wake Forest UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1266522019-11-09T12:52:52Z2019-11-09T12:52:52ZTrump’s charity woes are uncommon, if not unprecedented, and could get more costly<figure><img src="https://images.theconversation.com/files/300767/original/file-20191107-10905-1hebvyv.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C3900%2C1301&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Eight charities will get the Trump Foundation's remaining assets.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/PGroup-Dennis-Van-Tine-MediaPunch-MediaPunch-IPx-A-ENT-IPX-Donald-Trump-and-Family-Through-The-Years/b1cfeb42fa8144f1b8ea5d3eb1410ae9/92/0"> Dennis Van Tine/MediaPunch/IPX via AP</a></span></figcaption></figure><p>The <a href="https://theconversation.com/us/topics/trump-foundation-31249">Donald J. Trump Foundation</a> is now defunct, and the state of New York has ordered the president to <a href="https://www.documentcloud.org/documents/6542055-Trump-Foundation-Restitution-Decision-Nov-7-2019.html">give US$2 million to a group of nonprofits</a> out of his own pocket as restitution for breaking the law by misusing charitable funds. </p>
<p>I’m an <a href="https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=2057780">expert on charitable tax law</a> who used to work at the Internal Revenue Service. I find Trump’s admissions of impropriety in the settlement to a lawsuit New York authorities filed against him startling. But although this saga <a href="https://www.washingtonpost.com/politics/trump-ordered-to-pay-2-million-to-charities-over-misuse-of-foundation-court-documents-say/2019/11/07/b8f804e2-018e-11ea-9518-1e76abc088b6_story.html">may appear to have concluded</a>, I don’t believe that the full repercussions of his legal woes have become clear. </p>
<h2>Self-dealing</h2>
<p>New York Supreme Court <a href="http://ww2.nycourts.gov/courts/comdiv/ny/newyork_bio_scarpulla.shtml">Judge Saliann Scarpulla</a> found that four members of the Trump family and their fellow officers and directors violated their fiduciary duties to avoid the illegal practice of “<a href="https://theconversation.com/what-trump-foundations-self-dealing-disclosure-means-for-a-conflicted-president-elect-70075">self-dealing</a>” – when the people who run a charity benefit from it – and broke other rules and regulations.</p>
<p>Trump served as the <a href="https://www.nytimes.com/2018/06/14/nyregion/attorney-general-trump-lawsuit.html">foundation’s president for three decades</a> after its 1987 founding. He abdicated that role three days after his inauguration. </p>
<p>Ivanka Trump, Eric Trump and Donald Trump Jr. all served on the Trump Foundation board, which <a href="https://www.nytimes.com/2018/06/14/nyregion/attorney-general-trump-lawsuit.html">never met between 1999 and 2018</a>, although Ivanka stepped down during when she joined the Trump administration. <a href="https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=JLJih9v_PLUS_EKSuJs36THzexg==&system=prod">According to the settlement</a> made public on Nov. 7, the directors also failed to “provide oversight, set policy or approve the direction, operations or acts of the foundation.”</p>
<p>The Trump Foundation, among other misdeeds, <a href="https://www.documentcloud.org/documents/6542055-Trump-Foundation-Restitution-Decision-Nov-7-2019.html">improperly spent $250,000</a> to settle the legal disputes incurred by the Trump family’s business dealings.</p>
<p>Trump also used $25,000 in charitable money to make a donation to support the reelection campaign of then-Florida Attorney General <a href="https://www.politifact.com/florida/article/2016/sep/21/donald-trump-pam-bondi-and-25k-was-it-pay-play/">Pam Bondi</a>, a Republican who is <a href="http://www.msnbc.com/rachel-maddow-show/despite-earlier-controversy-pam-bondi-joining-team-trump">reportedly going to join his administration</a> soon and at the time was considering whether to <a href="https://www.wtsp.com/article/news/politics/florida/ap-bondi-sought-trump-money-before-spurning-trump-university-case/235290853">launch an investigation</a> of <a href="https://www.washingtonpost.com/news/post-politics/wp/2017/03/31/judge-approves-25-million-settlement-in-trump-university-cases/">Trump University</a> – which, like the foundation, has been dismantled.</p>
<p><a href="https://www.law.cornell.edu/uscode/text/26/4955">Federal law prohibits the use of charitable money</a> to make political donations.</p>
<p>Trump occasionally used the foundation’s money to purchase things he simply wanted to own, including football player <a href="https://www.usatoday.com/story/sports/2018/12/18/tim-tebow-autographed-helmet-donald-trump-foundation/2359249002/">Tim Tebow’s autographed helmet and two paintings</a> of himself.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/300938/original/file-20191108-194624-1ibt6s1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/300938/original/file-20191108-194624-1ibt6s1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/300938/original/file-20191108-194624-1ibt6s1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=428&fit=crop&dpr=1 600w, https://images.theconversation.com/files/300938/original/file-20191108-194624-1ibt6s1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=428&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/300938/original/file-20191108-194624-1ibt6s1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=428&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/300938/original/file-20191108-194624-1ibt6s1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=538&fit=crop&dpr=1 754w, https://images.theconversation.com/files/300938/original/file-20191108-194624-1ibt6s1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=538&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/300938/original/file-20191108-194624-1ibt6s1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=538&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">These Florida protesters in 2016 objected to the Trump Foundation’s support for Pam Bondi, who was then serving as their state’s attorney general.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Campaign-2016-Trump-Protest/e2b0218511444630a0d99655f454183e/1/0">AP Photo/Lynne Sladky</a></span>
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<h2>Uncommon restrictions</h2>
<p>Although the Trumps had already agreed in December 2018 to <a href="https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=JLJih9v_PLUS_EKSuJs36THzexg==&system=prod">dissolve the foundation</a>, and they had previously admitted to committing legal violations, the specifics of the settlement did not get sorted out for nearly another year.</p>
<p>If Trump ever launches a new charity chartered in New York or even sits on a charitable board, he’ll have to submit to an unusual degree of monitoring. A majority of board seats on any new Trump charity would have to be occupied by people who aren’t in his family. The charity would have to employ a qualified lawyer. It would have to be audited regularly to ensure that it doesn’t pay Trump or his company for any services.</p>
<p>Eight <a href="https://www.npr.org/2019/11/07/777287610/judge-says-trump-must-pay-2-million-over-misuse-of-foundation-funds">nonprofits will share Trump’s $2 million in restitution</a> and the <a href="https://ag.ny.gov/press-release/2019/ag-james-secures-court-order-against-donald-j-trump-trump-children-and-trump">$1.78 million remaining in the Trump Foundation’s coffers</a>. They are Army Emergency Relief, the Children’s Aid Society, Citymeals on Wheels, Give an Hour, Martha’s Table, the United Negro College Fund, United Way of the National Capital Area and the U.S. Holocaust Memorial Museum.</p>
<p>Interestingly, <a href="https://www.documentcloud.org/documents/6542055-Trump-Foundation-Restitution-Decision-Nov-7-2019.html">the settlement mentions</a> that Trump and his businesses had already paid a total of about $340,000 back to the Trump Foundation between 2016 and 2019 to cover the amount of money disbursed for his self-dealing transactions. </p>
<p>And it’s worth noting that the Trumps can’t take a charitable deduction on any of these payments to charity when they file their taxes.</p>
<h2>Trump’s own take</h2>
<p>Despite having reached a settlement requiring his admission of wrongdoing, the president seemed to informally assert he did nothing wrong.</p>
<p><a href="https://twitter.com/realDonaldTrump/status/1192594646691729408">Trump tweeted</a> a statement accusing Letitia James, New York’s attorney general, of “deliberately mischaracterizing” the settlement.</p>
<p>“All they found was incredibly effective philanthropy and some small technical violations, such as not keeping board minutes,” he said through the social media platform. The statement also referred to Trump’s decision to officially move his official <a href="https://qz.com/1740938/trumps-official-move-to-florida-is-conveniently-timed/">residence from New York City to Palm Beach, Florida</a>.</p>
<p>The Trump Foundation had disbursed about <a href="https://apnews.com/7b8d0f5ce9cb4cadad948c2c414afd57">$19 million over the past decade</a>, including $8.25 million of the president’s own money, to hundreds of charitable organizations, according to its lawyer, Alan Futerfas.</p>
<h2>Precedents</h2>
<p>It’s unprecedented that a sitting president of the United States officially admits to this kind of wrongdoing and agrees to formal supervision if he should ever venture back into the charitable world. And while it’s not unheard of, it’s uncommon for legal authorities to order anyone to spend millions of dollars to compensate the public for misusing charitable funds under their control.</p>
<p>One reason is that it’s pretty hard to get caught. For the most part, charity laws and regulations are not subject to across-the-board enforcement at the <a href="https://theconversation.com/the-real-irs-scandal-has-more-to-do-with-budget-cuts-than-bias-95026">state level or by the IRS</a>. </p>
<p>The closest precedent involving the White House and charitable transgressions that comes to mind occurred half a century ago.</p>
<p>President Richard Nixon’s attorneys <a href="https://www.nytimes.com/1975/09/13/archives/2-charges-dropped-in-tax-case-on-gift-of-nixons-papers.html">falsified documents</a> from him to take a <a href="https://minds.wisconsin.edu/bitstream/handle/1793/45978/MA26_1_2.pdf?sequence=3&isAllowed=y">tax deduction</a> on the value of his pre-presidential papers he said he’d donated to the National Archives prior to July 25, 1969.</p>
<p>After an IRS employee leaked information about Nixon’s tax return, he <a href="http://taxhistory.org/thp/readings.nsf/ArtWeb/F1F9BC7589F6ECD18525801A0052DBC1?OpenDocument">agreed to allow</a> the Joint Committee on Internal Revenue Taxation to examine the propriety of his returns from that time. It found other failures to boot. Nixon had to pay more than $450,000 in back taxes and interest.</p>
<p>Nixon also allegedly exchanged <a href="https://www.washingtonpost.com/archive/politics/1997/10/30/nixons-fateful-reversal/91e1ce61-e7e4-4c66-a76a-af2c55f1327e/">$2 million in dairy industry campaign contributions</a> for <a href="https://www.npr.org/sections/itsallpolitics/2011/11/16/142314581/illegal-during-watergate-unlimited-campaign-contributions-now-fair-game">increasing milk subsidies</a>. Those revelations came out in the middle of the Watergate inquiry that led to his exit from office.</p>
<p>A more recent parallel involved <a href="https://philanthropynewsdigest.org/news/former-trustee-agrees-to-repay-4-million-to-massachusetts-charitable-trust">Paul C. Cabot Jr.</a>, who pilfered millions of dollars from the Paul & Virginia Cabot Charitable Trust to finance his own lavish lifestyle. In 2004, the Massachusetts attorney general ordered Cabot Jr., the heir to a <a href="https://www.investopedia.com/articles/mutualfund/05/mfhistory.asp">mutual fund pioneer</a>, to pay $4 million in restitution.</p>
<p>Cabot Jr. was completely <a href="http://archive.boston.com/news/local/massachusetts/articles/2004/12/16/foundation_chief_agrees_to_repay_over_4m">barred from serving as a board member</a> in any Massachusetts charity for life.</p>
<h2>The IRS</h2>
<p>While Trump has resolved his civil liability with the state of New York associated with his shuttered foundation, this settlement may mean that Trump will owe the IRS money. </p>
<p>That’s because he has admitted that his campaign took advantage of the foundation’s expenditures to boost his 2016 presidential bid. In particular, the political campaign took control over the disbursement of $2.8 million to veterans’ causes at a televised fundraiser that doubled as a campaign event. </p>
<p>Because <a href="https://www.law.cornell.edu/uscode/text/26/509">tax law</a> clearly <a href="https://www.law.cornell.edu/uscode/text/26/4955">bars charities like the Trump Foundation</a> from attempting to “influence the outcome of any specific public election,” I believe that the foundation could owe a <a href="https://www.irs.gov/charities-non-profits/private-foundations/private-foundation-taxable-expenditures-taxable-expenditures-defined">10% excise tax</a> of the amount involved – $282,300.</p>
<p>The precedent for this would be the <a href="https://www.politico.com/story/2016/09/trump-pam-bondi-scandal-227823">$2,500 Trump paid to the IRS in 2016</a> after reimbursing the Foundation for the $25,000 Bondi campaign contribution.</p>
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<p class="fine-print"><em><span>Philip Hackney is affiliated with the Democratic Party. </span></em></p>Under a settlement reached with New York authorities, he must give US$2 million to nonprofits out of his own pocket. And if he wants to start another foundation, Trump must submit to close supervision.Philip Hackney, Associate Professor of Law, University of PittsburghLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1183102019-10-25T12:32:19Z2019-10-25T12:32:19ZWhat is ‘dark money’? 5 questions answered<figure><img src="https://images.theconversation.com/files/297714/original/file-20191018-56198-ynqprd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">These Iowan supporters of Steve Bullock may hope he'll make good on promises to get 'dark money' out of politics.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Election-2020-Steve-Bullock/e109acce79d54e44808f94098093fdb1/1/0">AP Photo/Charlie Neibergall</a></span></figcaption></figure><p>With the 2020 campaign season upon us, “dark money” is again in the news. </p>
<p>Maine’s Republican Sen. Susan Collins has decried what she contends is a <a href="https://www.pressherald.com/2019/09/06/sen-collins-criticizes-dark-money-in-political-campaigns/">“dark money” campaign</a> against her. Montana’s Gov. Steve Bullock has made opposition to dark money <a href="https://www.npr.org/2019/07/17/742427894/steve-bullock-vows-to-disentangle-dark-money-from-politics">a centerpiece of his Democratic presidential campaign</a>. </p>
<p>But what exactly is “dark money,” and why is it considered a problem? </p>
<p>As a law professor who studies <a href="https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?article=3090&context=faculty_scholarship">campaign finance</a>, I’d like to answer those questions and explain how improved disclosure laws could shed some light on dark money.</p>
<h2>1. What is ‘dark money’?</h2>
<p>Election campaigns run on money. </p>
<p>Money pays for <a href="https://www.fec.gov/help-candidates-and-committees/making-disbursements/operating-expenditures-candidate/">salaries, travel – and especially advertising</a>. Candidates who are not personally wealthy depend on contributions to cover those costs, or on supportive spending by political parties and other political groups. Since the <a href="http://www.worldcat.org/oclc/892340">Watergate scandal</a> in the 1970s, <a href="https://www.washingtonpost.com/wp-srv/national/longterm/watergate/legacy.htm">federal laws</a> have imposed limits on political contributions and required that candidates disclose to the Federal Election Commission the sources of most donations used in federal campaigns. Most states have similar laws <a href="http://www.ncsl.org/research/elections-and-campaigns/disclosure-and-reporting-requirements.aspx">governing their elections</a>. </p>
<p>In the first several decades after the enactment of disclosure requirements, most federal campaign spending was disclosed. But changing campaign practices, particularly the growing role of outside groups that are neither candidate committees nor political parties, has enabled some large donors to hide more of their giving. Starting in 2010, campaign finance observers at the Sunlight Foundation began to refer to some of these unregulated funds as <a href="https://sunlightfoundation.com/2010/10/18/daily-disclosures-10/">“dark money</a>.” The term was popularized by a best-selling <a href="http://www.worldcat.org/oclc/929917321">2016 book by Jane Mayer</a>.</p>
<p>“Dark money” refers to campaign money whose sources are not disclosed. An expenditure – for example, for a television ad criticizing an opponent – will often be publicly reported to the FEC but not the identities of the people, firms or organizations that pay for it.</p>
<h2>2. Is ‘dark money’ a problem?</h2>
<p>Many scholars think it is. </p>
<p>A lack of disclosure makes it harder for journalists, regulators and opponents to detect violations of campaign finance law, such as illegal contributions from foreign donors or government contractors and contributions over the legal limit. </p>
<p>It also hides <a href="https://www.opensecrets.org/news/2017/10/returned-contributions/">legal contributions from disreputable sources</a> like Harvey Weinstein or Bernie Madoff. </p>
<p>That’s not all. The lack of disclosure also denies voters valuable information. As the U.S. Supreme Court observed in <a href="https://supreme.justia.com/cases/federal/us/424/1/">Buckley v. Valeo</a>, the landmark 1976 decision that upheld federal campaign disclosure laws, identifying a candidate’s financial backers “alert(s) the voter to the interests to which the candidate is most likely to be responsive.” This is particularly significant in primaries when all the candidates are in the same party, and voters can’t rely on party labels to decide whom to vote for.</p>
<p>In the current Democratic presidential race, for example, disclosure allows voters to verify candidates’ claims about donors, revealing that former Vice President Joe Biden has <a href="https://theintercept.com/2019/04/25/joe-biden-presidential-bid-lobbyists-fundraiser/">courted lobbyists</a>, Sen. Elizabeth Warren gets nearly <a href="https://www.opensecrets.org/members-of-congress/summary?cid=N00033492">30% of her money from large individual donors</a>, or that some Silicon Valley donors are supporting South Bend Mayor <a href="https://prospect.org/article/do-pete-buttigiegs-donors-know-him-better-we-do">Pete Buttigieg</a>. Knowing these details helps voters understand what interests a candidate may favor if elected.</p>
<p>To be sure, disclosure has its critics. Last summer’s kerfuffle over <a href="https://thehill.com/homenews/house/456902-house-conservatives-call-for-ethics-probe-into-joaquin-castro-tweet">Rep. Joaquin Castro’s tweeting</a> the names and employers of large donors to President Trump – all of which had been disclosed as required by law – underscores the concern of some people that disclosure is an invasion of donors’ privacy.</p>
<h2>3. How much dark money is out there?</h2>
<p>Due to its very “darkness,” it is hard to know just how much dark money is being spent, but there is reason to believe the number is large and growing. </p>
<p>Remember: Some dark money spending is reported to the Federal Election Commission without disclosing donors and some dark money spending isn’t reported at all. The campaign finance watchdog <a href="https://www.opensecrets.org/news/2016/11/1-4-billion-and-counting-in-spending-by-super-pacs-dark-money-groups/">Center for Responsive Politics found</a> that dark money groups reported spending US$181 million in the 2016 federal elections. Dark money accounted for nearly a fifth of all spending by groups other than candidates and parties in the last decade. </p>
<p>But these figures account only for spending reported to the FEC and likely represent only <a href="https://www.opensecrets.org/news/2019/02/somp3-billion-dollar-dark-money-tip-of-the-iceberg/">“the tip of the iceberg</a>,” according to the center. As long as campaign spending is not subject to disclosure the total amount of dark money is unknowable. </p>
<h2>4. Why is it possible to hide donations?</h2>
<p>Dark money grows out of gaps in our campaign finance law. </p>
<p>Federal election law most clearly addresses reporting and disclosure by candidates, political parties and political committees that exist primarily to support candidates and parties. But other organizations also participate in elections. These include <a href="https://www.issueone.org/wp-content/uploads/2018/09/Dark-Money-Illuminated-Report.pdf">business groups and trade associations</a> like the U.S. Chamber of Commerce, membership organizations like the National Rifle Association or the League of Conservation Voters, labor unions, and ideological groups like Americans for Prosperity or Patriot Majority USA.</p>
<p>These groups do not have to report their donors because they claim to work on issues and not on behalf of specific candidates.</p>
<p>There are some exceptions. If the group spends a significant amount on a campaign ad, it will have to report the spending and any donors who specifically helped buy it. But the law covers only some campaign ads. The Buckley decision held that only ads literally calling for the election or defeat of a clearly identified candidate – what the law calls <a href="https://supreme.justia.com/cases/federal/us/424/1/">“express advocacy”</a> – are campaign ads subject to disclosure. </p>
<p>That means that organizations can sharply attack or warmly praise a candidate in ads but avoid disclosing donors by stopping short of telling people how to vote. These <a href="https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?article=1909&context=faculty_scholarship">“issue ads”</a> are not subject to disclosure.</p>
<p>In 2002, Congress passed the <a href="https://caselaw.findlaw.com/us-supreme-court/540/93.html">McCain-Feingold law</a>, which extended disclosure to include broadcast ads that mention a candidate 30 days before a primary and 60 days before a general election, but similar ads aired earlier in the campaign season are not covered.</p>
<p>Following the money is made more difficult because many nominally non-political organizations fund campaign ads indirectly. They do this by donating to another group which buys the ad. Sometimes, even that second group transfers the money to a third organization before the ad purchase it made.</p>
<p>This <a href="https://www.bloomberg.com/news/articles/2012-10-15/secret-political-cash-moves-through-nonprofit-daisy-chain">“daisy chain”</a> or <a href="https://www.cpr.org/2019/06/20/colorado-dems-have-a-plan-to-shine-a-light-on-dark-money-could-it-work/">“nesting Russian doll”</a> practice is an end run around disclosure. </p>
<p>Even though the organization that actually does the spending must disclose its large donors to the <a href="https://www.fec.gov/data/">Federal Election Commission</a>, these reports simply list a contribution from the next link in the chain – which tells the voters nothing about <a href="https://www.issueone.org/wp-content/uploads/2018/09/Dark-Money-Illuminated-Report.pdf">who actually paid</a>.</p>
<h2>5. What can be done?</h2>
<p>The problem of “dark money,” while serious, can be addressed with legislative fixes.</p>
<p>First, all organizations – including corporations, labor unions and non-profits engaged in election-related spending – could be required to disclose large donors whose funds are used for campaign ads. The Citizens United decision struck down limits on corporate spending, but it also <a href="https://www.fec.gov/updates/fec-statement-on-the-supreme-courts-decision-in/">sustained the law requiring corporations to disclose their spending</a>. </p>
<p>Second, when the disclosed donations are from an organization further down the daisy chain, the disclosure could include the major donors to that organization. Several states, such as <a href="https://www.insidepoliticallaw.com/2019/07/02/new-jersey-colorado-join-growing-list-of-states-regulating-dark-money/">New Jersey and Colorado</a>, have recently passed laws requiring that information. </p>
<p>The U.S. House of Representatives this spring passed <a href="https://www.npr.org/2019/03/07/701248576/democrats-election-reform-bill-takes-aim-at-dark-money">similar legislation</a> addressing large dark money donors and spenders in federal elections, although <a href="https://www.vox.com/2019/3/27/18284171/senate-democrats-anti-corruption-hr1-schumer-mcconnell">Republicans in the Senate</a> seem unlikely to take it up. </p>
<p>To be sure, some constitutional issues remain – particularly the definition of what constitutes an election-related ad. But because disclosure does not limit or bar the use of campaign money and increases voter information, the court has regularly found disclosure to be consistent with the First Amendment. </p>
<p>In other words, unlike many other issues in campaign finance reform, the obstacle to improved disclosure is political, not constitutional. </p>
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<p class="fine-print"><em><span>Richard Briffault does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A law professor explains political disclosure laws, how donors get around them – and what to do about it.Richard Briffault, Joseph P. Chamberlain Professor of Legislation, Columbia UniversityLicensed as Creative Commons – attribution, no derivatives.