Sunday, July 23, 2006

Are Estate-Tax Audits Being “PETRAfied”?

From an item in today's New York Times:

“The federal government is moving to eliminate the jobs of nearly half of the lawyers at the Internal Revenue Service who audit tax returns of some of the wealthiest Americans, specifically those who are subject to gift and estate taxes when they transfer parts of their fortunes to their children and others.

“The administration plans to cut the jobs of 157 of the agency’s 345 estate tax lawyers, plus 17 support personnel, in less than 70 days.”

Although the auditors are becoming unemployed (Civil Service rules won't let them switch to income-tax audits), deputy IRS Commissioner Kevin Smith sends them off with a kind word:

“Estate tax lawyers are the most productive tax law enforcement personnel at the I.R.S., according to Mr. Brown. For each hour they work, they find an average of $2,200 of taxes that people owe the government.”

Oh, well. Even with PETRA, the estate tax won't vanish entirely, though enforcement obviously will be scanty. So the words of the IRS theme song could continue to ring true:
If he hollers, Tax him more;
Tax him till he's good and sore.
Tax his coffin, Tax his grave,

Tax the sod in which he's laid.
Put these words upon his tomb,
"Taxes drove him to his doom."
After he's gone, we won't relax.
We'll still collect inheritance tax.

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