Patterico's Pontifications

6/15/2013

IRS Collecting Your Electronic Data While Most Senators Miss Briefing on Surveillance

Filed under: General — Patterico @ 2:42 pm



On Twitter, iowahawk notes a story from April that carries new significance in light of recent revelations:

The Internal Revenue Service is collecting a lot more than taxes this year — it’s also acquiring a huge volume of personal information on taxpayers’ digital activities, from eBay auctions to Facebook posts and, for the first time ever, credit card and e-payment transaction records, as it expands its search for tax cheats to places it’s never gone before.

. . . .

“It’s well-known in the tax community, but not many people outside of it are aware of this big expansion of data and computer use,” says Edward Zelinsky, a tax law expert and professor at Benjamin N. Cardozo School of Law and Yale Law School. “I am sure people will be concerned about the use of personal information on databases in government, and those concerns are well-taken. It’s appropriate to watch it carefully. There should be safeguards.” He adds that taxpayers should know that whatever people do and say electronically can and will be used against them in IRS enforcement.

. . . .

“Private industry would be envious if they knew what our models are,” boasted Dean Silverman, the agency’s high-tech top gun who heads a group recruited from the private sector to update the IRS, in a comment reported in trade publications. The IRS did not respond to a request for an interview.

How extensive is this surveillance? You can rest easy, because of the judicial oversight! . . . by a court that denies fully .03% of all surveillance requests . . . and the legislative oversight! . . . that is, by the lawmakers who are in town to listen to the details:

Many senators elected to leave Washington early Thursday afternoon instead of attending a briefing with James Clapper, the Director of National Intelligence, Keith Alexander, the head of the National Security Agency (NSA), and other officials.

The Senate held its last vote of the week a little after noon on Thursday, and many lawmakers were eager to take advantage of the short day and head back to their home states for Father’s Day weekend.

Only 47 of 100 senators attended the 2:30 briefing, leaving dozens of chairs in the secure meeting room empty as Clapper, Alexander and other senior officials told lawmakers about classified programs to monitor millions of telephone calls and broad swaths of Internet activity.

By the way, I’m not sure I place the blame for this on the Senators. One wonders when the briefing was announced, and whether it was deliberately set for a day and time when the administration knew lawmakers had already scheduled their out-of-town trips.

67 Responses to “IRS Collecting Your Electronic Data While Most Senators Miss Briefing on Surveillance”

  1. Shorter Patterico version:

    NSA: I believe in the NSA! Hey, after all, unnamed former “officials” say there is “stringent internal supervision.” Snowden is a poopyhead who needs to go to jail!

    IRS: Bad, bad, bad. They stinky!

    Derp (44a2a2)

  2. I can only hope that senior staffers attended. Most of those Senators wouldn’t know what they were hearing anyway. Chuck Hagel and Patty Murray have shown us what the Senators look like when the spotlight is off.

    Mike K (dc6ffe)

  3. …and whether it was deliberately set for a day and time when the administration knew lawmakers had already scheduled their out-of-town trips.

    Yes, the administration knew most in Congress only spend three days a week in DC. They get there on time for the Tuesday session and leave Thursday afternoon.

    Which isn’t necessarily to say they only work three days a week. House representatives have an office in their district and Senators have several offices in their state.

    Steve57 (1ca8bb)

  4. Derp,

    Hop! You’ve already got your head stuck up your ass! That will take care of you.

    peedoffamerican (a84075)

  5. …taxpayers should know that whatever people do and say electronically can and will be used against them in IRS enforcement.

    The IRS needs to be abolished and the tax code replaced with a flat tax. And whatever replaces the IRS needs to be prohibited from doing any sort of electronic surveillance.

    This is the big problem with taking the attitude “I’m not doing anything wrong so I’ve got nothing to hide” toward all this electronic surveillance the government is doing across the board. How do you know you’re doing nothing wrong? Have you read the tax code? Were you supposed to report the income from the private sale you made on ebay? Besides it’s not up to the individual to decide they’re doing nothing wrong. Your government monitors get to decide that, and they can decide that what you were doing last week is now deemed to be wrong this week.

    Oh, look, I just got a phone call from the IRS. Somebody must have been watching as I typed this.

    Steve57 (1ca8bb)

  6. Derp,

    I am concerned about the NSA but uncertain about what to make of the story because Snowden seems noncredible and therefore I don’t believe I know the facts with any certainty.

    In this story there appears to be little controversy about the facts.

    Patterico (5a049c)

  7. I’m told by a staffer friend that members of Congress work very hard.

    Patterico (5a049c)

  8. “they can decide that what you were doing last week is now deemed to be wrong this week.”

    – Steve57

    No, they can’t. I saw it in the Constitution.

    Leviticus (2c236c)

  9. 7.I’m told by a staffer friend that members of Congress work very hard.

    Maybe, but doing what? Mostly running for re-election as I understand it.

    James B. Shearer (fc4608)

  10. They are also doing this
    http://www.examiner.com/article/obama-snoops-part-2-infiltrate-target-harass-churches

    but he prohibits spying on mosques.

    peedoffamerican (c1890a)

  11. I think the date was on purpose, the equivalent of the Friday afternoon news dump.

    I think also we’re doomed.

    Patricia (be0117)

  12. Maybe, but doing what? Mostly running for re-election as I understand it.

    They do spend a lot of time dialing for dollars.

    Patterico (9c670f)

  13. And in all of that, you omitted the need of the Infernal Revenue Service to have a means to verify that we are all carrying ObaminableCare-approved insurance.

    The Dana who noticed (af9ec3)

  14. The Obama Administration’s motto is вперед, but they may have found away to move backwards; cash economy, anyone?

    The old fashioned Dana (af9ec3)

  15. Not that I like it but I pay all my taxes and then some.

    Rodney King's Spirit (ae12ec)

  16. “Derp”s act is kinda tired.

    JD (b63a52)

  17. Politicians do work very hard and the job takes its toll on a person, which is why we must grant them early retirement. Say at every election?

    nk (875f57)

  18. 6. Derp,

    I am concerned about the NSA but uncertain about what to make of the story because Snowden seems noncredible and therefore I don’t believe I know the facts with any certainty.

    In this story there appears to be little controversy about the facts.

    Comment by Patterico (5a049c) — 6/15/2013 @ 3:32 pm

    There isn’t any uncertainty about the secret order from the FISA court demanding data from Verizon. No one has disputed that document’s authenticity. So we know what kind of telephony data NSA is collecting, that the data they’re collecting is on US persons, and essentially it’s everything. And we know they’re storing that data for future possible exploitation.

    So we know DNI Clapper lied to Congress when he told Wyden NSA doesn’t collect data of any kind on Americans, and that NSA Directer Alexander lied when he stated in a public forum about this time last year that no information about Americans would be retained in the massive Utah storage facility they’re building.

    That’s pretty damning just on its own.

    Steve57 (1ca8bb)

  19. Derp is a Balkoite. I bet we have seen him here under other names as a frothing-at-the-mouth Balko fan.

    No blame for Balko on this; he was kind to me after I was SWATted and I’d like to think we are on good terms. Unlike him, some other people just can’t let go. Derp is one of them.

    Patterico (9c670f)

  20. Badge licking authoritarian!

    daleyrocks (bf33e9)

  21. 16. Not that I like it but I pay all my taxes and then some.

    Comment by Rodney King’s Spirit (ae12ec) — 6/15/2013 @ 4:25 pm

    How does anyone really know they pay all their taxes and then some? There could be transactions you engage in and it would never occur to you there’s a tax angle to it. The IRS has just installed a smart meter on every single taxpayer to dig for exactly that data.

    Glenn Reynolds, also known as Instapundit, is a law professor at the University of Tennessee, authored a paper titled “Ham Sandwich Nation: Due Process When Everything is a Crime.”

    Recently he’s been elaborating on points he made in “Ham Sandwich Nation.” He points out that when the Federal government can’t even count its own regulations, you can’t possibly know if you’re in violation of them. Even if we narrow it down to the tax code you can’t know. All the government needs to do is ID the target, then find the crime.

    I know I won’t be discussing tax issues with my accountant by email or by phone. The only thing I’ll discuss with her and dates and times of meetings so we can talk in person.

    It’s a side issue, but keep in mind that even if the IRS doesn’t find anything they can use against you there’s nothing to prevent the IRS from sharing whatever it finds with other agencies. Who can then look to see if you committed a crime you didn’t know about.

    Steve57 (1ca8bb)

  22. I wonder what the wookiesuiters think of their ecash now. Derp?

    nk (875f57)

  23. Comment by Steve57 (1ca8bb) — 6/15/2013 @ 5:07 pm

    It seems they share quite a bit about taxpayers with others, in and out of the government.

    askeptic (2bb434)

  24. My take on the fact that half the Senators missed this meeting:

    Why would you want to listen to Clapper, and risk the loss of IQ points – which Senators cannot spare.

    askeptic (2bb434)

  25. What people don’t realize is that Obama is just acting like Strother Martin’s character Captain in the movie Cool Hand Luke and he is having various government agencies and departments intrude upon our lives for our own good. Like Luke in the same movie, I just wish he would stop being so good to me.

    daleyrocks (bf33e9)

  26. J Edgar was a piker compared to the obama administration. They will know not only where the skeletons are buried but who buried them and why. It will reach a point where no one will feel safe questioning anything. So, why not leave town?

    Jim (2976d8)

  27. much too busy lining their pockets and feathering their nests…

    Colonel Haiku (c7fc59)

  28. same strange behavior
    brain washed, rinsed and well wrung out
    derp is a twerp

    Colonel Haiku (c7fc59)

  29. 26. LOL

    gary gulrud (dd7d4e)

  30. I’m not sure I place the blame for this on the Senators.

    ALL the blame? No. But they have an obligation to CHANGE their @@$%@ plans.

    Not everything that is an “all hands on deck” occurrence is a terrorist attack or call for war.

    IGotBupkis, "Faeces Evenio, Mr. Holder?" (a2f645)

  31. Wouldn’t attending a briefing by someone you already know has no compunction about lying to Congress be pointless?

    NickM (218798)

  32. I can’t wait until they start going after sixteen-year-old girls who make extra money babysitting, or people who don’t pay sales or income taxes on their eBay auctions.

    bridget (84c06f)

  33. Did anyone read Georeg Will’s column this weekend?

    Sammy Finkelman (d22d64)

  34. Or capital gains if the are just a normal person selling a vintage kids’s book with a 1.99 cost basis and a 200 dollar bid.

    SarahW (b0e533)

  35. The ebay/ PayPal trawling is infuriating. They shouldn’t have access to any info behind a password until wrongdoing is suspected.

    SarahW (b0e533)

  36. And when the jaws are clamped tight on any pay via Internet transactions, here comes the lawn squad touring your neighborhood for local sales and Craigslist listings.

    SarahW (b0e533)

  37. It wouldn’t be cost effective for the IRS to do any of this, and they do very few audits, but the law is still written that all these things are taxed, and also count for things like Medicaid.

    Sammy Finkelman (d22d64)

  38. Let’s list ’em:
    eBay
    Craigslist
    Yard sales
    Airbnb
    Etsy
    Babysitting
    Mowing lawns
    Shovelling driveways
    Putting in some new wiring in your friend’s house
    Dog-walking and pet-sitting
    Sharing a ride and the gas money to the airport

    What these dingbats don’t understand is that a good portion of the economy will come to a grinding halt, and that a lot of our prosperity is based on getting things done easily, cheaply, and from the most able person to do it. Parents who have to give their babysitter a 1099 and an extra $5 an hour to account for her taxes aren’t going to go to dinner and a movie nearly as often. People who can’t get rid of their things in a yard sale or on Craigslist will throw them out, leaving them and the potential purchasers worse off. Elderly people who used to pay the kid next door $20 to shovel the driveway will pay a professional much more money – and then go on Medicaid or food stamps a little bit sooner. People who pay for a taxi, rather than ride-sharing, won’t spend nearly as much money while on vacation.

    bridget (84c06f)

  39. Comment by bridget (84c06f) — 6/18/2013 @ 12:49 pm

    Parents who have to give their babysitter a 1099 and an extra $5 an hour to account for her taxes aren’t going to go to dinner and a movie nearly as often.

    They are not going to do, but the boundary line is very very vague. There is a de minimus provision either in the law or in IRS policy.

    For instance cab fare to go home when working late isn’t considered income (although that might be because it is for the convenience of the employer)

    Looking at eBay isn’t for this but to check into welfare fraud. And they would be interested in if anybody sold a car or other high priced items.

    Anyway, what needs to be done is for Congress to change the income tax and other laws.

    Maybe all miscellaneous income below $10,000 should be ignored. Or $20,000? $30,000?

    People who can’t get rid of their things in a yard sale or on Craigslist will throw them out, leaving them and the potential purchasers worse off. Elderly people who used to pay the kid next door $20 to shovel the driveway will pay a professional much more money – and then go on Medicaid or food stamps a little bit sooner. People who pay for a taxi, rather than ride-sharing, won’t spend nearly as much money while on vacation.

    Sammy Finkelman (d22d64)

  40. New Credit Card Reporting Requirement Worries Some Taxpayers Forbes 10/25/2011 @ 10:24AM

    A little over three years ago, President Bush signed into law a bill known as The Housing Assistance Tax Act of 2008; it was part of the Housing and Economic Recovery Act of 2008, or HERA….What was forgotten about was that little “for other purposes” bit in the bill. Smack in the middle of the bill was a new requirement for banks and credit card merchants to report certain payments to the IRS. The law was passed in 2008 but the new reporting requirement didn’t kick in until this year (2011); it will show up for the first time when forms 1099-K are issued in early 2012. Yep, that’s just a few months away.

    The idea of the law was to “improve voluntary tax compliance by business taxpayers and help the IRS determine whether their tax returns are correct and complete.” Yes, they used the word “voluntary.” Only it’s not so much.

    You see, you and I both know that there are hundreds of millions of dollars (if not more) exchanging hands that go unreported every year. This difference between what is actually reported versus actually earned is called the tax gap. A lot of the tax gap is thought to be the result of online transactions. And it’s true. Bloggers, etsy sellers, affiliates, eBay merchants and other small businesses have been able to stay under the radar if their income comes from multiple sources or if they are paid from companies that fail to file report that income (for whatever reason). The form 1099-K is an attempt to put an end to the underground/untaxed economy.

    Here’s how it will work: certain payments for goods and services paid by credit card or third party merchants will now be reported to the IRS via the form 1099-K. The look and feel of the form 1099-K is very similar to the form 1099-INT used by banks to report interest and the form 1099-DIV used by banks to report dividends.

    The form 1099-K will be required for “reportable payment transactions.” A reportable payment transaction is basically a transaction in which a payment card (such as a credit card or gift card) is accepted as payment or any transaction that is settled through a third party payment network like PayPal. It does not include ATM withdrawals, cash advances against a credit card, a check issued in connection with a payment card, or any transaction in which a payment card is accepted as payment by a merchant or other payee who is related to the issuer of the card.

    What this means, basically, is that taxpayers who have a credit card merchant account, Paypal account or similar account and otherwise meet the criteria will receive form 1099-K from their service provider at the end of the year

    Sammy Finkelman (d22d64)

  41. Nope, Sammy. The new deal is they trawl everything linked to ebay. Every transaction, with access to credit and to bank accounts linked PayPal. To watch them. just in case.

    SarahW (b0e533)

  42. 38. George F. Will: There’s more, much more, to the Lois Lerner story Posted: 06/12/2013

    As soon as the Constitution permitted him to run for Congress, Al Salvi did. In 1986, just 26 and fresh from the University of Illinois law school, he sank $1,000 of his own money, which was most of his money, into a campaign to unseat an incumbent Democratic congressman. Salvi studied for the bar exam during meals at campaign dinners.

    He lost. Today, however, he should be invited to Congress to testify about what happened 10 years later when as a prosperous lawyer he won the Republican Senate nomination to run against a Democratic congressman named Dick Durbin.

    In the fall of 1996, at the campaign’s climax, Democrats filed with the Federal Elections Commission charges alleging campaign finance violations by Salvi’s campaign. These charges dominated the campaign’s closing days. Salvi spoke by phone with the head of the FEC’s Enforcement Division, who he remembers saying: “Promise me you will never run for office again, and we’ll drop this case.” He was speaking to Lois Lerner.

    After losing to Durbin, Salvi spent four years and $100,000 fighting the FEC, on whose behalf FBI agents visited his elderly mother demanding to know, concerning her $2,000 contribution to her son’s campaign, where she got “that kind of money.” When the second of two federal courts held that the charges against Salvi were spurious, the lawyer arguing for the FEC was Lois Lerner….

    Sammy Finkelman (d22d64)

  43. Shouldn’t that be called the Illinois way, not tghe Chicago way?

    Sammy Finkelman (d22d64)

  44. Parents who have to give their babysitter a 1099 and an extra $5 an hour to account for her taxes aren’t going to go to dinner and a movie nearly as often.

    They are not going to do, but the boundary line is very very vague. There is a de minimus provision either in the law or in IRS policy.

    I haven’t taken tax law in years, but I think you are misapplying de minimus income, i.e. it applies to cab fare home from work or a free lunch at the office, but it does not apply to wages for work.

    The first $600 of miscellaneous income does not have to be reported (e.g. gambling winnings), but everything over that has to be. So a kid who earns about $15 a week in babysitting money theoretically needs to file a tax return for that money, and de minimus doesn’t apply because it’s wages, not ancillary benefits.

    bridget (84c06f)

  45. Half the point of amnesty is to make cracking down on the off grid economy, of ordinary persons possible…

    SarahW (b0e533)

  46. That old crank, P. Henry, arguing for a more limited federal government:

    The officers of Congress may come upon you now, fortified with all the terrors of paramount federal authority. Excisemen may come in multitudes; for the limitation of their numbers no man knows. They may, unless the general government be restrained by a bill of rights, or some similar restriction, go into your cellars and rooms, and search, ransack, and measure, every thing you eat, drink, and wear. They ought to be restrained Within proper bounds.”

    SarahW (b0e533)

  47. 43, 44. Good stuff.

    gary gulrud (dd7d4e)

  48. 51. ! Roobs, tell us it ain’t true!

    gary gulrud (dd7d4e)

  49. Features, and bugs, people. Features, and bugs.

    JD (b63a52)

  50. I’ve had it. I don’t know my country anymore…it’s made of lies and government spies who want to punish wrong thoughts and speech and force me to purchase what I don’t want,and control how I light my rooms or how cold I keep them. It feels entitled to know my dearest concerns and interfere with how my doctor records our interactions.

    I really can’t bear it. I’m even looking at real estate in Sweden, where the people are free, compared to this tx1138 nightmare creeping up the walls of my house.. I can only stay so many months a year and they hate to bank with Americans because the US punishes banks that deal with expats.

    Something’s got to give or it’s all but over and I think it might already be. Who will stop it?

    SarahW (b0e533)

  51. They ought to be restrained by Rule-7.62!

    askeptic (b8ab92)

  52. In order to tax transactions on eBay don’t you need to know the cost basis of the items sold? Now you would if the items were new.

    What is some are sold at a profit and other things at a loss? It would seem that all transactions could be combined (as they are in a business or with gambling)

    Sammy Finkelman (d22d64)

  53. Comment by SarahW (b0e533) — 6/18/2013 @ 1:10 pm

    Half the point of amnesty is to make cracking down on the off grid economy, of ordinary persons possible…

    A necessary, but not a sufficient condition.

    Sammy Finkelman (d22d64)

  54. Nope. It’s per item.

    SarahW (b0e533)

  55. That is, there is no capital loss deduction for items kept for personal use, like storybooks or pins with gold or gems or flatware that have gone up in value.

    You buy and sell in a business, investment property that loses value can offset gains. But not the emerald pin you inherited in 1970.

    SarahW (b0e533)

  56. Arrg. half of that got deleted. No deductions for losses, like on you clothes or shoes or Jerry Pournelle novella in the box under you bed, or ikea furniture in low demand. Ther Eli’s no offset on personal items, only investment property. I’m not sure how beanie baby bubbles would work. But your basic household item loss will not cancel out the pin, the silver, the rare book gain.

    SarahW (b0e533)

  57. daleyrocks, Strother “What we’ve got here is a failure to communicate” Martin is certainly one of the most enjoyable character actors of the ’60s/’70s.
    He and Paul Newman kept appearing in the same films !

    I’m sure you also recall he was the guy who hired Butch & Sundance to ride along with him to get the payroll, in Bolivia. “Idiots—I’ve hired idiots !”

    Elephant Stone (6a6f37)

  58. I hope that garble can be understood. eBay sellers can’t offset capital gains, which apply for personal items as well as investment items, to capital losses for personal items, but only for investment items.

    SarahW (b0e533)

  59. Former WH counsel Bob Bauer is advising Obama Administration personnel to “stay in their lanes” as they coordinate the ObamaCare roll-out — because he wants to avoid claims that the White House is affiliating itself with political action groups as they coordinate the roll-out ObamaCare. Even though they are.

    You know, it isn’t hard to imagine Bauer telling members of the Obama Administration to “stay in their lanes” when they talked to IRS personnel about Tea Party nonprofit groups.

    DRJ (a83b8b)

  60. Sarah W: yes, it’s per item, but the way around it would be to sell everything and then use the cost basis of the entire lot. For example, you bought 50 baseball cards for $2 each back in the day, and one of them became valuable (worth, say, $200). Your eBay listing would be “Baseball card collection. Fifty cards, one of which is the rookie card for David Ortiz. Asking $200.” Your cost basis to the IRS would be $100 (i.e. 50 cards sold in a collection in one transaction, $2 each).

    The downside: you have to sell your entire collection to get around the taxes. Just another way in which the government makes efficient things either inefficient, expensive, or otherwise unappealing.

    bridget (84c06f)

  61. None of this about eBay sales is discussed anywhere in the IRS 1040 instructions or even in Publication 17 (this question is avoided) and it isn’t mentioned by tax refomers either, not that I know. A flat tax is not a simple tax. (although a flat tax would enable withholding to be done by the people writing certain kinds of checks)

    Sammy Finkelman (d22d64)


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