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When the people fear the government, there is tyranny; When the government fears the people, there is liberty.  ~ Thomas Jefferson

 

Entries Tagged as 'Treasury'

Inmates get fraudulent tax refunds behind bars, report says

December 2nd, 2010 · Economy, Fraud Alert, Taxes, Treasury

By Ed O’Keefe

Jail cells might keep inmates from escaping, but don’t appear to stop some from filing fraudulent tax returns.

More than 48,800 of the nation’s prisoners claimed $130 million in fraudulent tax refunds by March of this year, and the numbers are probably much higher, according to a new watchdog report. The IRS paid $112 million of the claims, a small fraction of the $326 billion in refunds so far this year.

But the number of fraudulent payments made to inmates has climbed 37 percent since 2004, said the report, which also acknowledged that the rise is partly a result of increased detection and enforcement by the IRS.

The IRS doesn’t screen most prisoners’ tax returns, according to the report by the Treasury Inspector General for Tax Administration (TIGTA), set for release Thursday. A review of tax records found that 88 percent of the 287,918 returns filed by prisoners by late March were not screened for potential fraud. Of those, about 48,800 returns lacked wage information reported to the IRS by employers, the report said.

“There is a major problem with returns being filed fraudulently by people who are incarcerated,” TIGTA Inspector General J. Russell George said in an interview. “What makes this even more problematic is that we identified this as a problem more than five years ago. The problem not only persists, it’s gotten even worse.”

In 2005, TIGTA found that 18,000 prisoners had filed fraudulent returns in 2004. The report prompted a 2008 law that now requires George’s office to file regular updates on prison-based tax fraud. The number of bad claims has climbed because the IRS has stepped up detection and enforcement, as well as because a higher number of prisoners are making fraudulent claims, TIGTA and IRS officials said Thursday.

The IRS “is making very good progress” in identifying cases of fraud, George said. Overall, in the general population, the agency stopped almost 250,000 fraudulent returns totaling $1.48 billion through March, double the number from the 2009 filing season.

“The IRS takes refund fraud seriously and has programs in place to aggressively combat it,” agency spokesman Terry Lemons said in a statement. Tracking prison fraud “is not a simple process, particularly considering the fact that some inmates and their families are legally entitled to tax refunds and that the prisoner population is constantly changing,” he said.

The agency is working with state and federal officials to ensure timely updates and last summer met with federal prison officials to improve detection and prevention of prisoner fraud, he said.

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Employers looking at health insurance options

October 25th, 2010 · Corruption, Deception, Democrats, Ethics, Federal Spending, Government Control, Healthcare, Immigration, Money Lost, National Security, Non-Transparency, Obama's Scheme, Selling Out the US, Small Business, Tax Dollars, Taxes, Terrorism from Within, Treason, Treasury, Unemployment

By RICARDO ALONSO-ZALDIVAR – The Associated Press
Monday, October 25, 2010; 4:12 AM

WASHINGTON — The new health care law wasn’t supposed to undercut employer plans that have provided most people in the U.S. with coverage for generations.

But last week a leading manufacturer told workers their costs will jump partly because of the law. Also, a Democratic governor laid out a scheme for employers to get out of health care by shifting workers into taxpayer-subsidized insurance markets that open in 2014.

While it’s too early to proclaim the demise of job-based coverage, corporate number crunchers are looking at options that could lead to major changes. Gov. Phil Bredesen, D-Tenn., said the economics of dropping coverage are “about to become very attractive to many employers, both public and private.”

That’s just not going to happen, White House officials say.

“The absolute certainty about the Affordable Care Act is that for many, many employers who cover millions of people, it increases the incentives for them to offer coverage,” said Jason Furman, an economic adviser to President Barack Obama.

Yet at least one major employer has shifted a greater share of plan costs to workers, and others are weighing the pros and cons of eventually forcing employees to strike out on their own.

“I don’t think you are going to hear anybody publicly say ‘We’ve made a decision to drop insurance,’ ” said Paul Keckley, executive director of the Deloitte Center for Health Solutions. “What we are hearing in our meetings is, ‘We don’t want to be the first one to drop benefits, but we would be the fast second.’ We are hearing that a lot.” Deloitte is a major accounting and consulting firm.

“My conclusion on all of this is that it is a huge roll of the dice,” said James Klein, president of the American Benefits Council, which represents big company benefits administrators. “It could work out well and build on the employer-based system, or it could begin to dismantle the employer-based system.”

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The Overseas Profits Elephant in the Room: There’s a trillion dollars waiting to be repatriated if tax policy is right.

October 20th, 2010 · Economy, Government Control, Greed, Tax Dollars, Taxes, Treasury, Unemployment

By John Chambers and Safra Catz

During last year’s “Jobs Summit,” President Obama said he was open to any good idea to get the economy moving again. Today he should be especially so, since Washington’s many monetary and fiscal policy decisions have not been able to spur the robust growth or job expansion that we all would like. And yet there is a simple idea—the trillion-dollar elephant in the room—that has apparently been dismissed for no good reason.

One trillion dollars is roughly the amount of earnings that American companies have in their foreign operations—and that they could repatriate to the United States. That money, in turn, could be invested in U.S. jobs, capital assets, research and development, and more.

But for U.S companies such repatriation of earnings carries a significant penalty: a federal tax of up to 35%. This means that U.S. companies can, without significant consequence, use their foreign earnings to invest in any country in the world—except here.

The U.S. government’s treatment of repatriated foreign earnings stands in marked contrast to the tax practices of almost every major developed economy, including Germany, Japan, the United Kingdom, France, Spain, Italy, Russia, Australia and Canada, to name a few. Companies headquartered in any of these countries can repatriate foreign earnings to their home countries at a tax rate of 0%-2%. That’s because those countries realize that choking off foreign capital from their economies is decidedly against their national interests.

Many commentators have pointed to the large cash balances sitting on U.S. corporate books as evidence that the economy is still stalled because companies aren’t spending. That analysis misses the point. Large cash balances remain on U.S. corporate books because U.S. companies can’t spend their foreign-held cash in the U.S. without incurring a prohibitive tax liability.

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Foreclosure freeze leads to uneasy politics for Democrats

October 19th, 2010 · Accountability, Banking Industry, Corruption, Deception, Democrats, Ethics, Federal Spending, Fraud Alert, Government Control, Greed, Housing Industry, Money Lost, Obama's Scheme, Selling Out the US, Tax Dollars, Taxes, Treasury

Another political factor: people struggling to keep paying their mortgages who are upset that deadbeat borrowers may get a break.

“I pay my mortgage every month; that was the deal I made,” Kevin McGrath, a Virginia realtor, wrote in an e-mail. “I know I am currently throwing money into a depreciating asset that every day feels more and more like the Black Hole of Calcutta, but that’s ok; I placed my bet, and I am willing to ride this pony until she breaks.

“But wait a minute; now I look over at my neighbor and I see he is in the same situation, upside down on his mortgage, except he has not made a payment in a year or so. He has multiple cars in his driveway, some of them newer than mine, he just got back from a trip to Best Buy, and he is still living in his house. There are all kinds of neat things to do with your money when your housing costs are zero. Where is my free rent?

By Steven Mufson Washington Post Staff Writer
Tuesday, October 19, 2010; 7:26 AM

The details of the foreclosure mess are ugly and complicated. The politics of it are even worse.

The calculus is clear for most Democratic incumbents, especially those in tight races like Senate Majority Leader Harry M. Reid: Nothing could be worse on the eve of elections than images of people being booted out of their homes by big banks that have relied on sloppy, if not fraudulent, paperwork.

But reviving the economy requires repairing the housing market, which won’t happen until foreclosed properties and delinquent mortgages are dealt with. So the White House, which is looking past the midterm elections, has been restrained. Housing and Urban Development Secretary Shaun Donovan wrote over the weekend that “a national, blanket moratorium on all foreclosure sales would do far more harm than good, hurting homeowners and home buyers alike.”

It’s a recipe for legislative inaction, especially with lawmakers busy campaigning. For a White House seen by Wall Street as too populist, and by many liberals as too close to Wall Street, that might not be a bad outcome. Democratic candidates can strike a populist note, letting the Obama administration take the economic high road while pressing banks to define the scope of the latest financial mess.

“There’s a problem here,” said one veteran Democratic political consultant, who spoke on the condition of anonymity because of the issue’s sensitivity. “The politics are very attractive to say, ‘Let’s have a moratorium.’ But shutting down foreclosures has the potential of shutting down the whole housing market, which isn’t helpful to anybody.”

For now, most of the biggest banks, sensitive to political winds, have voluntarily frozen foreclosure sales. Some analysts believe the freeze could last until January. That gives banks until the end of the quarter to figure out the extent of their problems, and it delays foreclosures until after the election as well as the Thanksgiving and Christmas holidays.

“I think that they’re trying to see how this is playing,” said one political consultant working for the financial services industry. “They’re trying to gauge the political intensity around the issue.”

Democratic pollster Peter Hart says intensity runs high. “There are two things of critical importance to American households,” he said. “One is their job and two is their house.”

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Momentum builds for nationwide freeze on foreclosures despite the grave impact on the nation’s housing market and economic recovery.

October 11th, 2010 · Banking Industry, Corruption, Deception, Democrats, Economy, Federal Spending, Government Control, Greed, Housing Industry, Obama's Scheme, Real Estate, Selling Out the US, Tax Dollars, Taxes, Terrorism from Within, Treason, Treasury, Unemployment

By Ariana Eunjung Cha, Steven Mufson and Jia Lynn Yang Washington Post Staff Writers
Saturday, October 9, 2010; 10:23 AM

Senior Obama administration officials said Friday that a nationwide moratorium on foreclosure sales may be inevitable, despite their grave reservations about the impact a broad freeze would have on the nation’s housing market and economic recovery.

Their remarks were made as pressure for a nationwide moratorium mounted Friday when Bank of America, the nation’s largest bank, halted foreclosure sales in all 50 states. Senate Majority Leader Harry M. Reid (D-Nev.), who is locked in a tight reelection campaign, called on other major lenders to follow suit.

The White House has so far resisted joining the election-season calls for action but convened two interagency meetings this week to discuss reports that banks filed fraudulent documents to evict delinquent borrowers and to deal with questions about whether banks are seizing properties without having clear ownership of the mortgages.

One meeting was made up mostly of groups that regulate the housing industry, including the Department of Housing and Urban Development, the Treasury Department and the White House. The other, which involved the U.S. Securities and Exchange Commission, the Internal Revenue Service and U.S. attorneys from across the country, was focused on the question of whether financial fraud was committed.

With foreclosed properties comprising one in every four homes sold in the United States, the spreading moratorium could disrupt real estate deals in progress, slow down the process of clearing the backlog of troubled home loans and prolong the economic recovery, analysts said.

A freeze would also strike at the financial sector, just two years after it suffered one of the worst crises in its history. One government official who has been in discussions with several big financial firms said the banks are bracing themselves for a wave of lawsuits from homeowners who are fighting to keep their homes and from investors who had bought mortgage loans on Wall Street. On Friday, while the Dow Jones industrial average crossed 11,000, most major bank stocks fell.

Bank of America is the first bank to put a moratorium on foreclosures in all states, extending its suspension to states such as California and Nevada, which have been hit hardest by the housing bust. Previously, Bank of America, J.P. Morgan Chase and others had announced that they were stopping foreclosures only in the 23 states where a court order is needed for an eviction.

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Tax wrangling creates uncertainty about paychecks

October 8th, 2010 · Deception, Democrats, Economy, Greed, Taxes, Terrorism from Within, Treasury

By Peter Whoriskey Washington Post Staff Writer
Friday, October 8, 2010; 2:27 AM

With Congress in a muddle over tax rates for next year, uncertainty over how much to withhold from workers’ pay has begun to worry the nation’s payroll administrators.

Normally, the Treasury Department issues information on how much to take out of next years paychecks by mid-November, but this year the debate over how much to extend the Bush tax cuts seems unlikely to be resolved by that time, and could drag into December or beyond.

The longer it drags on, the more likely it will complicate the processing of millions of paychecks in January. It can take as long as five weeks for some companies to make the adjustments under the new tables, payroll administrators said.

“Withholding is so personal to people,” said Michael O’Toole, the American Payroll Association’s director of government relations and publications. “People are apprehensive about whether Congress will act on time for them to produce accurate payrolls at the beginning of the year.”

A Treasury representative declined to say how the Treasury would handle the situation, should it drag out.

“We have a lot of flexibility on the release of the withholding tables,” the representative said. “The president and [Treasury Secretary Timothy F.] Geithner are confident Congress will vote to approve middle-class tax relief before the end of the year.”

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Amid backlash and budget deficits, government workers’ pensions are targets like the rest of America

October 6th, 2010 · Deception, Democrats, Economy, Federal Spending, Greed, Money Lost, Obama's Scheme, Selling Out the US, States, Tax Dollars, Treasury, Unemployment

By Michael A. Fletcher Washington Post Staff Writer
Wednesday, October 6, 2010; 2:45 AM

PHILADELPHIA – Faced with deep budget deficits and overextended pension plans, state and local leaders are increasingly looking to trim the lucrative retirement benefits that have long been associated with government employment.

Public employees are facing a backlash that has intensified with the nation’s economic woes, union leaders say, because of their good job security, generous health-care and pension benefits, and right to retire long before most private-sector workers.

In California, where an estimated 80 cents out of every government dollar goes to employee pay and benefits, Gov. Arnold Schwarzenegger (R) has proposed a two-tier system of pensions that offers new state workers reduced benefits with tighter retirement formulas. He also wants state workers to kick in higher pension contributions to help deal with California’s staggering deficit.

New Jersey Gov. Chris Christie (R) calls reform of public employee pensions essential to fixing the state’s enormous fiscal problems. Michigan Gov. Jennifer M. Gran-holm (D) recently signed a change to her state’s teacher pensions that increases employee contributions. Illinois has pushed back the retirement age for new employees. Detailing his agenda for New York, Democratic gubernatorial nominee Andrew M. Cuomo has said, “We simply can’t afford to pay benefits and pensions that are out of line with economic reality.”

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Money transfers could face anti-terrorism scrutiny

September 27th, 2010 · Accountability, Foreign Policy, Homeland Security, Immigration, National Security, Treasury, War on Terrorism

By Ellen Nakashima  Washington Post Staff Writer
Monday, September 27, 2010; 2:50 AM

The Obama administration wants to require U.S. banks to report all electronic money transfers into and out of the country, a dramatic expansion in efforts to counter terrorist financing and money laundering.

Officials say the information would help them spot the sort of transfers that helped finance the al-Qaeda hijackers who carried out the Sept. 11, 2001, attacks. They say the expanded financial data would allow anti-terrorist agencies to better understand normal money-flow patterns so they can spot abnormal activity.

Financial institutions are now required to report to the Treasury Department transactions in excess of $10,000 and others they deem suspicious. The new rule would require banks to disclose even the smallest transfers.

Treasury officials plan to post the proposed regulation on their Web site Monday and in the Federal Register this week. The public could comment before a final rule is published and the plan takes effect, which officials say will probably not be until 2012.

The proposal is a long-delayed response to the 2004 Intelligence Reform and Terrorism Prevention Act, which specified reforms to better organize the intelligence community and to avoid a repeat of the 20S01 attacks. The law required that the Treasury secretary issue regulations requiring financial institutions to report cross-border transfers if deemed necessary to combat terrorist financing.

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With their Jobs on the line, Dems want to fix the economy. Too little too late.

August 25th, 2010 · Accountability, Auto Industry, Banking Industry, Change of Power, Deception, Democrats, Economy, Ethics, Federal Spending, Government Control, Greed, Money Lost, Non-Transparency, Obama's Scheme, Reform, Selling Out the US, Tax Dollars, Taxes, Terrorism from Within, Treason, Treasury, Unemployment

As midterms loom, Democrats work to shore up faltering recovery

By Lori Montgomery – Wednesday, August 25, 2010

A rapidly weakening economy threatens to undermine President Obama’s assertion that he has set the nation on a path to prosperity and, with barely two months until congressional midterm elections, Democrats find themselves with few options for reviving the faltering recovery.

The latest sign that the economy is losing steam: Home sales fell 27 percent in July, the steepest one-month drop since figures were first compiled in 1968, according to a report released Tuesday. Analysts had expected sales to decline following the expiration of a federal tax credit for homebuyers this spring, but the drop was nearly twice as large as forecast.

The housing report punctuated a wave of bad news that has been building all summer. The number of jobless claims has risen in each of the past four weeks and last week hit its highest point in nine months. Private-sector job creation is trending well below the level needed to keep up with population growth. Retail sales have also been disappointing.

Economists generally do not expect a dip back into recession, although many say the risk has grown with each new piece of disheartening data.

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Minority leader Boehner: Fire Obama’s economic team, extend tax cuts

August 24th, 2010 · Accountability, Corruption, Deception, Democrats, Federal Spending, Foreign Policy, Greed, Money Lost, Non-Transparency, Obama's Scheme, Selling Out the US, Tax Dollars, Taxes, Terrorism from Within, Treasury

By Paul Kane and Michael D. Shear – Tuesday, August 24, 2010; 12:21 PM

CLEVELAND — House Minority Leader John Boehner (R-Ohio) called Tuesday for the mass firing of the Obama administration’s economic team, including Treasury Secretary Timothy F. Geithner and White House adviser Larry Summers, arguing that November’s midterm elections are shaping up as a referendum on sustained unemployment across the nation and saying the “writing is on the wall.”

Boehner said President Obama‘s team lacks “real-world, hands-on experience” in creating jobs that are needed for a full economic recovery. The Republican lawmaker cited reports that some senior aides complained of “exhaustion,” including the recently departed budget chief Peter Orszag.

“President Obama should ask for – and accept – the resignations of the remaining members of his economic team, starting with Secretary Geithner and Larry Summers, the head of the National Economic Council,” Boehner said in the morning speech to business leaders at the City Club of Cleveland. The mass dismissal, he added, would be “no substitute for a referendum on the president’s job-killing agenda. That question will be put before the American people in due time. But we do not have the luxury of waiting months for the president to pick scapegoats for his failing ‘stimulus’ policies.”

Vice President Biden lashed back at Boehner, called his “so-called” economic plan nothing but a list of what Republicans are against and devoid of innovative new ideas that can help move the country forward.

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