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In a criminal act, some person (or persons) at the IRS leaked confidential information on some of the nation’s wealthiest people. It was given to ProPublica, an independent, non-profit newsroom based in New York City, which reported that they had “obtained” a “vast cache of IRS information” on “thousands of the nation’s wealthiest people,” which they then published.
In the report dated June 8th, Jesse Eisinger, Jeff Ernsthausen and Paul Kiel wrote: “ProPublica is not disclosing how it obtained the data, which was given to us in raw form, with no conditions or conclusions.” They claimed to have “verified” the information by “comparing elements of it” with dozens of already public tax details. They claim all people mentioned in the article were asked to comment. Those who responded, unsurprisingly, said they had paid whatever taxes were legitimately owed.
The incident raises questions: It is illegal to pass on confidential IRS data. Will the guilty party be exposed and punished? If unrealized capital gains should be taxed, as the report infers, would it be a recurring tax? And if unrealized gains can be taxed, what about unrealized losses? Could they be deducted against ordinary income? After all, there are years when stocks decline. Would future investment be inhibited by taxing unrealized gains? After all, expanding economies rely on capital investments, be it from a pension plan, the savings of an individual, or a business. But there is a broader question. What is the purpose of the IRS? Is it to levy and collect taxes so to fund the federal bureaucracy, or is its mission to redistribute income? ProPublica claims to investigate “abuses of power,” but the abuse they highlight is not the IRS, which a few years ago during the Obama Administration targeted conservative non-profits. Nor will they identify the unnamed leaker who abused his position by disclosing confidential information. No, they highlighted the assets of four wealthy individuals who had taken advantage of legitimate loopholes, all laid out in the 6,550-page Internal Revenue Code, which was passed by Congress.