Weaponized Audits: If the Fed Does It, Why Wouldn't the States?


Posted by Katie McAuliffe on Monday, May 20th, 2013, 9:18 AM PERMALINK


In light of recent revelations about the IRS’s shady practices – disregarding Fourth Amendment rights online and targeting groups for their political affiliation – Americans should consider three important questions:

1.       Do we really want to grant nearly every state access to our tax records with the IRS?
2.       Do we really want to expand state tax collection authority beyond each state’s borders?
3.       Do we really want state revenue departments with authority as limitless as the Internet?

It is nonsensical to reward the abuse of government power by expanding it. The obviously answer to each of these questions is absolutely not!

States’ physical borders are recognized as the end of state legal authority in tax collection and other matters.  We know from experience that when states have the ability to reach across their borders and tax competitors or target out of state entities with penalties, they will. There’s a reason the Articles of Confederation was an absolute failure. Giving both states and the federal government absolute expansive power is a horrible idea.

Shays Rebellion August 1786-June 1787

 

On the senate floor, Senator Enzi said that audits on businesses rarely happen, but they do happen, and an expansion of state tax authority across borders allows even more opportunities for businesses to be on the receiving end of a misguided audit.

These are not irrational worries that state IRS' may abuse their power in states searching for revenue.  The action of the Federal Internal Revenue service, targeting groups with a certain affiliation is proof positive that these instances ar enot only possible, but they happen int the worst way.  IT is not a far cry to believe that without the proper safe guards, some states will aggressively pursue businesses and tax revenue from other states.

Just wait for the first time a California department of revenue takes a Mississippi business to court over a sales tax dispute. Opening the door for even one abuse of power is too much, one time too many.

 

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