IRS Audits Poorly

IRS Audits Poorly

IRS Audits Poorly

A summary of what's in the major U.S. newspapers.
Feb. 16 2001 7:26 AM

IRS Audits Poorly

USA Today leads with the IRS's admission yesterday that a taxpayer's chances of being audited have dropped to a record low--about 1 in 204. The rates are even dropping among people making more than $100,000 a year. This has the agency worried about increased tax cheating. Main reasons for the trend: antiquated computers, fewer auditors, and 1998 legislation that made many IRS agents focus more on customer service than on enforcement. The Washington Post and New York Times lead with the tentative but likely agreement reached between incoming Israeli Prime Minister Ariel Sharon and his predecessor Ehud Barak to form a national unity government. Under the deal, Barak would become defense minister and his fellow Laborite former Prime Minister Shimon Peres would become foreign minister. Both papers point out that although fraught with prospects for political infighting, the new government would considerably enhance Sharon's ability to address the Palestinian crisis. The Los Angeles Times, which fronts Sharon-Barak, leads with what it sees as "the first signs of trouble" for President George W. Bush's tax cut proposal--two Republican senators announcing that they're against it, which is significant because of the Senate's 50-50 split. Indeed, says the paper, a leading Republican senator told Bush yesterday that his plan is now at least two votes shy of Senate passage. The LAT says that an alternative to the Bush plan, the idea of a trigger mechanism--which would allow a tax cut to take effect only if projected surpluses actually come to pass--is gaining strength among Republican and Democratic senators. The WP off-leads the Senate tax cut situation and the Wall Street Journal puts it atop its front-page world-wide news box.

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The NYT audit fronter adds that actually the chances of being audited are even slimmer than it first appears, because the IRS is giving particular attention to the returns of working poor people applying for the Earned Income Tax Credit. These folks, the paper says, make up 44 percent of all audits.

According to WP and NYT fronters, when President Bush and President Vicente Fox of Mexico meet today, immigration of Mexicans to the U.S. will be the main topic. Fox has urged loosening up border controls and granting legal status to the large numbers of Mexicans now in the U.S. illegally (some 3 million, says the Times). While Bush has not endorsed either idea, the papers say the meeting will produce an immigration working group led by Mexican and U.S. Cabinet members that will consider such proposals.

USAT fronts Bill Clinton's strongest defense yet of his pardon of Marc Rich, offered in a phone call with Geraldo Rivera. Clinton said that there "isn't a single, solitary shred of evidence that I did anything wrong." He added that "Marc Rich himself is a Republican," and that what did influence him was "Israel," apparently referring to a pro-Rich call he took from Ehud Barak. The WP pardon update, running inside, has Clinton saying of Rich, "I mean, he had three big-time Republican lawyers, including Dick Cheney's chief of staff." A NYT editorial quotes Democratic Sen. Herb Kohl saying, "There probably isn't one person across the country today who is familiar with this case who doesn't think that it's a question of power, connection, money." The WSJ adds a new name to the pardon story by reporting that Terry McAuliffe, longtime Clinton ally and now Democratic Party chairman, confirmed Thursday that he urged Clinton to pardon James Lake, a lobbyist friend of his and former Reagan adviser convicted in 1995 in a illegal campaign-contribution scheme. Clinton pardoned Lake. A NYT front-page effort on the dispirited post-election Democratic Party has this candor attack from William Daley, former Clinton commerce secretary and Al Gore campaign chairman: "Bush ran on bringing dignity back ... and I think the actions by Clinton of the last couple of weeks are giving him a pretty good platform."

The NYT reports that the Bush administration has told union leaders it will soon issue an executive order that will reduce the amount of money going to organized labor's political campaign funds, by requiring federal contractors to post a notice informing workers of their right--established in a 1988 Supreme Court decision--not to pay the part of union fees going to political activities.

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You know--eventually. The LAT fronts the Today show interview yesterday given by two of the civilians who were onboard the Greeneville when it surfaced into and sunk a Japanese fishing boat, leaving nine of its crew missing at sea. The paper reports what the sub's captain said when he rammed the boat: "Jesus, what the hell was that?" (Although in using the remark for the story's headline, it leaves out "Jesus.") One of the interviewees is quoted saying, "Not one thing got done on that submarine that the commanding officer was not made aware of."