Whistleblower Makes Shocking IRS Insider Trading Allegations


By John Crudele
NewYorkPost.com

A whistleblower made this shocking allegation to me last week: the IRS was tipping off members of Congress to corporate takeovers so the elected officials could profit from insider trading.

My snitch also charged that higher-level employees of the IRS also used that information to enrich themselves.

This may sound crazy but remember: Up until a few years ago members of Congress were allowed to trade stock based on information they got while performing their public duties.

It wasn’t until 2012, during President Obama’s tenure, that the practice was banned.

But the difference between what had been going on legally until 2012 and what my whistleblower is contending is enormous.

Everyone assumed that members of Congress were just profiting from things they happened to learn while working on their committees — that a drug was going to get turned down by the FDA, for instance, or that a company was sniffing around to see how regulators would feel about a merger.

That was bad enough!

What the whistleblower alleges goes well beyond that and is, quite frankly, freakin’ mind-boggling.

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Ron Paul: No (Internet Sales) Taxation without Representation!


By Ron Paul

Last week the United States Supreme Court, in the case of South Dakota v. Wayfair, ruled that the Constitution’s Commerce Clause allows state governments to force out-of-state businesses to collect state sales taxes. This decision overturns the court’s precedent that a state could require only businesses with a “physical presence” in the state to comply with state tax laws.

Unless Congress exercises its authority under the Commerce Clause to counter this decision with legislation, retailers will have to calculate sales taxes on every online purchase. An error in calculating sales taxes could cause a small retailer to undergo a costly and time-consuming audit, or even audits by multiple state governments. The compliance costs, along with the sales taxes themselves, will raise the cost of online commerce, burdening consumers and limiting the growth of internet business.

The burdens imposed on online commerce by the court’s decision will fall particularly hard on smaller internet retailers that rely on online sales to stay open. Stifling the growth of smaller and new internet retailers may be bad for consumers, but it serves the interest of large brick-and-mortar retailers, as well as large online retailers that already have to comply with state sales taxes because they have a physical presence in most states. These large businesses support giving states new taxing powers because they wish to use government power to make sure their smaller competitors stay small.

Allowing states to tax internet retailers with no physical presence in their states — and thus limited influence over state legislators — violates the principle of no taxation without representation. Tax- and power-hungry politicians will likely use this new power not just to increase taxes, but to impose other tax and regulatory burdens on out-of-state businesses. Having the power to tax and regulate employers and workers who cannot retaliate at the polls is a dream come true for many politicians. By making almost all online purchases subject to sales taxes, the decision will also reduce pressure on states to keep sales tax rates low.

The Constitution’s drafters intended the Commerce Clause to create free trade among the states, not to enable states to impose taxes and regulations on out-of-state businesses. The growth of online commerce does not change the Commerce Clause’s purpose.

Allowing state governments to force out-of-state retailers to comply with state tax laws harms small businesses, harms the growth of online commerce, and raises prices. It also benefits politicians seeking new tax revenue and helps large, politically-powerful corporations.

Congress must protect consumers, taxpayers, and small businesses by passing legislation limiting states’ ability to extend their taxing power across their borders. This would be a rare instance of Congress using its Commerce Clause powers for the intended purpose of promoting free trade among the states, not enabling the growth of government.

This article first appeared at RonPaulInstitute.org.

 

 
 
 
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Judicial Watch Obtains IRS Documents Revealing McCain’s Subcommittee Staff Director Urged IRS to Engage in “Financially Ruinous”


McCain minority staff director Henry Kerner to IRS official Lois Lerner and other IRS

officials: “the solution is to audit so many that it becomes financially ruinous”

(Washington, DC) – Judicial Watch today released newly obtained internal IRS documents, including material revealing that Sen. John McCain’s former staff director and chief counsel on the Senate Homeland Security Permanent Subcommittee, Henry Kerner, urged top IRS officials, including then-director of exempt organizations Lois Lerner, to “audit so many that it becomes financially ruinous.”  Kerner was appointed by President Trump as Special Counsel for the United States Office of Special Counsel.

The explosive exchange was contained in notes taken by IRS employees at an April 30, 2013, meeting between Kerner, Lerner, and other high-ranking IRS officials. Just ten days following the meeting, former IRS director of exempt organizations Lois Lerner admitted that the IRS had a policy of improperly and deliberately delaying applications for tax-exempt status from conservative non-profit groups.

Lerner and other IRS officials met with select top staffers from the Senate Governmental Affairs Committee in a “marathon” meeting to discuss concerns raised by both Sen. Carl Levin (D-MI) and Sen. John McCain (R-AZ) that the IRS was not reining in political advocacy groups in response to the Supreme Court’s Citizens United decision.  Senator McCain had been the chief sponsor of the McCain-Feingold Act and called the Citizens United decision, which overturned portions of the Act, one of the “worst decisions I have ever seen.”

In the full notes of an April 30 meeting, McCain’s high-ranking staffer Kerner recommends harassing non-profit groups until they are unable to continue operating. Kerner tells Lerner, Steve Miller, then chief of staff to IRS commissioner, Nikole Flax, and other IRS officials, “Maybe the solution is to audit so many that it is financially ruinous.” In response, Lerner responded that “it is her job to oversee it all:”

Henry Kerner asked how to get to the abuse of organizations claiming section 501 (c)(4) but designed to be primarily political. Lois Lerner said the system works, but not in real time. Henry Kerner noted that these organizations don’t disclose donors. Lois Lerner said that if they don’t meet the requirements, we can come in and revoke, but it doesn’t happen timely. Nan Marks said if the concern is that organizations engaging in this activity don’t disclose donors, then the system doesn’t work. Henry Kerner said that maybe the solution is to audit so many that it is financially ruinous. Nikole noted that we have budget constraints. Elise Bean suggested using the list of organizations that made independent expenditures. Lois Lerner said that it is her job to oversee it all, not just political campaign activity.

Judicial Watch previously reported on the 2013 meeting.  Senator McCain then issued a statement decrying “false reports claiming that his office was somehow involved in IRS targeting of conservative groups.”   The IRS previously blacked out the notes of the meeting but Judicial Watch found the notes among subsequent documents released by the agency.

Judicial Watch separately uncovered that Lerner was under significant pressure from both Democrats in Congress and the Obama DOJ and FBI to prosecute and jail the groups the IRS was already improperly targeting. In discussing pressure from Senator Sheldon Whitehouse (Democrat-Rhode Island) to prosecute these “political groups,” Lerner admitted, “it is ALL about 501(c)(4) orgs and political activity.”

The April 30, 2013 meeting came just under two weeks prior to Lerner’s admission during an ABA meeting that the IRS had “inappropriately” targeted conservative groups.  In her May 2013 answer to a planted question, in which she admitted to the “absolutely incorrect, insensitive, and inappropriate” targeting of Tea Party and conservative groups, Lerner suggested the IRS targeting occurred due to an “uptick” in 501 (c)(4) applications to the IRS but in actuality, there had been a decrease in such applications in 2010.

On May 14, 2013, a report by Treasury Inspector General for Tax Administration revealed: “Early in Calendar Year 2010, the IRS began using inappropriate criteria to identify organizations applying for tax-exempt status” (e.g., lists of past and future donors). The illegal IRS reviews continued “for more than 18 months” and “delayed processing of targeted groups’ applications” in advance of the 2012 presidential election.

All these documents were forced out of the IRS as a result of an October 2013 Judicial Watch Freedom of Information (FOIA) lawsuit filed against the IRS after it failed to respond adequately to four FOIA requests sent in May 2013 (Judicial Watch, Inc. v. Internal Revenue Service (No. 1:13-cv-01559)). Judicial Watch is seeking:

  • All records related to the number of applications received or related to communications between the IRS and members of the U.S. House of Representatives or the U.S. Senate regarding the review process for organizations applying for tax exempt status under 501(c)(4);
  • All records concerning communications between the IRS and the Executive Branch or any other government agency regarding the review process for organizations applying for tax exempt status under 501(c)(4);
  • Copies of any questionnaires and all records related to the preparation of questionnaires sent to organizations applying for 501(c)(4) tax exempt status.
  • All records related to Lois Lerner’s communication with other IRS employees, as well as government or private entity outside the IRS regarding the review and approval process for 501 (c)(4) applicant organizations.

“The Obama IRS scandal is bipartisan – McCain and Democrats who wanted to regulate political speech lost at the Supreme Court, so they sought to use the IRS to harass innocent Americans,” said Judicial Watch President Tom Fitton. “The Obama IRS scandal is not over – as Judicial Watch continues to uncover smoking gun documents that raise questions about how the Obama administration weaponized the IRS, the FEC, FBI, and DOJ to target the First Amendment rights of Americans.”

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Just How Much Federal Waste, Duplication and Weird or Unnecessary Spending Are Your Tax Dollars Funding?


 

By Adam Andrzejewsi
FoxNews.com

The ever-rising federal debt just surpassed $21 trillion last month at least $65,000 for every person in the U.S. Just how much federal waste, duplication, and weird or unnecessary spending are your tax dollars funding?

It’s hard to know where to begin, but here are some starters.

Delving into the trillions of dollars in annual spending, our government transparency organization, OpenTheBooks.com, recently examined Washington’s discretionary grants system beyond such big-ticket items as health, welfare and defense. We found that the feds doled out 560,771 grants totaling $583 billion during fiscal year 2016, the most recent year on record.

This means, on average, each grant exceeded $1 million. Not every federal grant is wasteful, but there are plenty that are highly questionable.

Consider these outlandish examples from the Department of Health and Human Services (HHS) in the final year of the Obama Administration. (We’ve included the names of the congressional representatives for the zip codes where the grant was received.)

· Sex-Ed for Prostitutes: Barbara Lee, D-Calif. – The California Prostitutes Education Project received nearly $1.5 million from HHS to teach sex-ed to prostitutes. The project seeks to teach prostitutes about safer sex and needle use in a way that’s respectful to its clients’ lifestyle and choices – even though prostitution is illegal in California and 48 other states.

· Designing Condoms: Joseph Kennedy III, D-Mass. – More than $200,000 funded a new condom design to address “a lack of adequate lubrication,” currently a “universal drawback” in other condom designs. The grant recipient – a company called Hydroglyde Coatings with the sole mission to design the perfect condom lubricant – should fund its own research and development.

· Video Game for Your Future Self: Robert Wittman, R-Va. – More than $650,000 funded video games designed to “make the future feel close,” allowing adolescents to explore their future selves. These games are titled “My World of Dreams,” “The Valley of Others,” “Disappointment Bridge,” and “The Sea of Hope.”

· Pedestrian Training in China: Terri Sewell, D-Ala. – The University of Alabama received $183,750 to develop a virtual reality platform to teach children how to cross the street – about as far from Alabama as possible.

·  E-Diary for Micro-Aggressions: Adam Kinzinger, R-Ill. – Northern Illinois University received $173,089 from HHS for a four-week study in which “radically diverse bisexual women” documented their experience with micro-aggressions using a daily e-diary.

Health & Human Services was the biggest porker by far – doling out roughly $4 of every $5 in federal grants. The total grant tab at HHS was $421 billion.

But the waste didn’t just flow from there. Ten other federal agencies doled out more than $1 billion in grants in fiscal year 2016 – and many of these agencies went off-mission in doing so.

· Galactic Animated Cartoons: Mo Brooks, R-Ala. – The National Aeronautics and Space Administration (NASA) awarded $2.5 million in grant funding to the Alabama Space Science Exhibit Commission to produce two seasons of “Space Racers,” an animated children’s cartoon in which the main characters embark on several galactic adventures.

· Zoombinis Computer Game: Katherine Clark, D-Mass. – The National Science Foundation (NSF) granted more than $658,000 to redevelop a 1990s computer game called “The Logical Journey of the Zoombinis” where children create their own small blue creature – the Zoombini – to help them through adventure challenges.

· Hobo Day: Kristi Noem, R-S.D., zip code 57007 – A grant for nearly $12,000 from the National Endowment for the Arts (NEA) funded South Dakota State’s Historic Hobo Day where students dress up as “hobos” and parade through the streets.

There is more, much more. And now you can see it all for yourself, zip code by zip code, with an interactive map we’ve built at OpentheBooks.com. When you open the tool, you will be swallowed in a sea of red we mapped every grant to a zip code pin. It may look intimidating – but simply zoom in or enter your zip code in the search bar above the map, click on a pin, then scroll down to see the results.

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Video: Cadillac Tax: Like Your Health Insurance? Then 40% Tax


“Affordable” Care Act? The cost of health insurance is going up faster than a cryptocurrency and a new 40% tax is about to be levied on “Cadillac Policies” — i.e. the health insurance you like and want to keep. Stacy Washington joins David Knight to break it down.

 

 
 
 
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Seven Myths About the GOP Tax Reform


When the history of the current year in American history is written, the passage of the 2017 tax reform bill will likely take a very large role.
 

by John Carney
breitbart.com

After a decade of economic contraction and listless  growth, Americans demanded a new set of policies that would “make America great again.” And Republicans responded by passing a dramatic overhaul to the tax code that aims to break the hold of what liberal economists call “secular stagnation.”

The passage of the bill was greeted by the unedifying spectacle of the Democratic opposition, many in the mainstream media, and many leading economists joining to mislead the public about the Republican tax proposals. It played out almost as a Shakespearean play-within-a-play. But instead of Hamlet’s production of a play about the assassination of a king, we saw the blue-checkmarks of economics and budgets performing a miniature version of the resistance-without-regard-for-truth that has been performed by America’s orthodox elites ever since Donald Trump’s election.

Many of the reports about the tax plan, however, are demonstrably false. Others are not even wrong. Below are the top seven myths that critics of the tax overhaul have put forward–and the evidence that disproves them.

MYTH #1: They’re cutting taxes on millionaires while raising them for the middle class and the poor.
FACT: Middle-income Americans are the biggest winners under the tax bill.

Despite the ocean of ink and cloud-stuffing pixels spilled out to prove this point–and the more hyperbolic critics have described the tax bill as “class warfare” against the middle class and the poor–it is obviously wrong. The Senate bill, for example, cuts taxes for every income bracket and slashes the tax bill for nearly all taxpayers.  In fact, middle-class Americans would see the largest deductions in their tax bills.

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Here are the facts, all according to the nonpartisan Joint Committee on Taxation.

  • Middle-income Americans win the most. People earning between $40,000 and $70,000 would see their tax bills falling by 7.1 percent. People with incomes between $20,000 and $30,000 would see a 10.4 percent decline in their tax bills. Millionaires get just a 5.3 percent cut.
  • And most middle-income Americans win. Eighty-one percent of taxpayers earning between $50,000 and $75,000 get a tax cut under the Senate bill, according to the JCT. For people earning between $75,000 and $100,000, 84 percent get a tax cut. The same with those earning $100,000 to $200,000. Just 80 percent of those earning a million dollars or more get a tax cut.
  • A lot of families will owe no taxes at all. Most married couples with children earning less than $60,000 per year will have no income tax liability at all. That’s because under the Senate bill, the child tax credit rises to $2,000 per child. (Note, this is not from JCT but from the MarketWatch tax calculator.)
  • It’s actually the wealthy that disproportionately pay higher taxes under the bill. Very few people would face a tax increase under the Senate bill, and those people are disproportionately wealthy. According to the JCT, just 10 percent of taxpayers earning between $50,000 and $75,0000 will get a tax increase under the Senate bill, largely from the loss of some deductions. That number is actually probably too high, however, because it was done before Senator Susan Collins of Maine proposed an amendment to preserve the deduction for state and local property taxes up to $10,000. For lower levels of income, the numbers are much smaller. In the $20,000 to $30,000 range, for example, just 5.6 percent will see taxes rise. Around 19.2 percent of millionaires, however, will pay more in taxes because of the loss of deductions.

One of the reasons critics of the tax cuts say the bill actually raises taxes on the middle class is that many of the cuts to individual tax cuts are set to expire after 2025 in order to comply with Senate budget rules. And it is true that if those tax cuts were allowed to expire, then taxes would go up for many Americans. But there’s no reason to expect Congress will allow the tax cuts to expire, particularly if Republicans keep control of either the House or the Senate. You don’t have to take our word for it, though. The New York Times explained all this years ago: temporary tax cuts are typically extended or made permanent.

When opponents of the tax bills say the expiration dates mean the Senate bill hikes taxes on the middle class, they’re not telling the truth.

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George Soros' $18 Billion Tax Dodge Exposed


The wealthy have tucked billions into private nonprofits... where the IRS can’t touch it.

 

by Tyler Durden
Zerohedge.com

Congress is still scrambling to find ways to pay for its tax cut, so perhaps it should pay closer attention to last month’s news that George Soros had transferred $18 billion of his fortune to a private charity that he controls. There it will be sheltered from the Internal Revenue Service forever. This may be the single biggest tax dodge in U.S. history, yet no one on the right or left seems to have raised an eyebrow.

True tax reform is predicated on the principle that all income should be taxed at a low rate once, and only once. But much of the wealth that Mr. Soros spent years moving into his Open Society Foundations will never be taxed. A gift of billions of dollars of appreciated stock escapes any capital gains tax, and the estate tax as well. So Mr. Soros can donate appreciated stock that Open Society Foundations can liquidate without the government ever taking a cut.

There’s more. When a person donates untaxed, appreciated assets to a private foundation, he may also deduct up to 20% of its market value on his personal return, carrying forward this deduction for five years. This double write-off may be the sweetest deal in the tax code.

The donors also can retain control of the money within the private foundation for years or even decades before it is disbursed. Since the foundation can employ family members at six-figure salaries for life to “administer” it, the umbilical cord to the donor never has to be cut.

Congress should stop ignoring this tax-avoidance scheme. The super rich have already poured hundreds of billions into private foundations, but the figure could soon be in the trillions. Mark Zuckerberg has pledged to give away 99% of his Facebook shares, currently estimated to be worth somewhere around $70 billion, and much of it will go to a foundation his family controls. Bill Gates and Warren Buffett have each put roughly $30 billion tax-free into the Bill and Melinda Gates Foundation. This has left the foundation so flush that it spent $500 million on a 12-acre, 900,000-square-foot office complex in Seattle for its 1,500 employees. This is philanthropy?

I don’t question these billionaires’ right to do with their money as they wish. I’m simply arguing that Congress shouldn’t let the rich and politically powerful use private foundations to escape taxation. This loophole is one reason for an anomaly in our otherwise progressive tax code: The top 1% of earners pay an effective tax rate of 23%, but the top 0.001% pay only 18%.

Mr. Buffett has sanctimoniously denounced the fact that he pays a lower effective tax rate than his secretary. His suggestion is that Congress raise taxes on capital gains. But even if the tax rates were lifted, say, to 50%, Mr. Buffett still wouldn’t have to pay it on the tens of billions of dollars he puts into private foundations, and he would still be able to deduct a fifth of that contribution on future tax returns.

This tax favoritism might be defensible to promote genuine philanthropic activities.

Many billionaires, such as the Gateses and David Koch, have heroically donated to fight cancer and malaria or provide relief to hurricane and earthquake victims.

But others, including Mr. Soros and Michael Bloomberg, have turned private foundations into massive de facto lobbying operations for bigger government and liberal causes like higher minimum wages, gun control, universal health care, and a carbon tax. Mr. Soros’s $18 billion gift alone is the equivalent of maybe 100 Heritage Foundations. This kind of weaponized philanthropy has the potential to undermine the American free enterprise system.

Yes, billions go to groups on the right, too, from Mr. Koch and others. But regardless of ideology, why shouldn’t tax be collected before the money is given away? What message does it send that the Republican tax-reform bills retain this trillion-dollar loophole for the super rich, at the same time as the House plan eliminates the adoption credit for middle-class families who want to help children?

One simple solution would be for Congress to apply the capital-gains tax to assets of more than $1 million before they are transferred to a charity. This could even finance cutting the capital-gains rate to 15% for everyone.

Alternatively (or perhaps in addition) Congress could cap deductions for any given household to $250,000 a year. Under this kind of plan, Mr. Soros would be able to write off only a tiny fraction of his multi-billion dollar gift.

This isn’t an argument against charity. But selfless and effective giving is not motivated by tax breaks. Two-thirds of Americans don’t itemize their deductions, yet millions give until it hurts. In the 1980s, individual donations to charities surged, even as the top tax rate—and thus the maximum value of the write-off—fell from 70% to 28%.

The question is whether a tax code that encourages dynastic family foundations is good for America. If Congress stopped letting billionaires pour money tax free into the foundation-industrial complex, it would go a long way toward lowering rates and making the tax code fairer for everyone. This would help the economy grow faster, which is the best way to help those in need.

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