As the Department of Government Efficiency (DOGE) looks to slash waste and correct inefficiencies, one DOGE adviser revealed it's "hard to really grasp the scale" of problems facing the IRS.
"A huge part of our government is collecting taxes. We cannot perform the basic functions of tax collection without paying a toll to all these contractors. We really have to figure out how to get out of this hole. We're in a really deep hole right now," DOGE representative Sam Corcos said on "The Ingraham Angle" Thursday.
Department of Government Efficiency @DOGE
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There is a pattern across all agencies where IT “modernization” contracts do not pay for outcomes/performance; instead, they pay for time. Therefore, the incentive is for contractors to “never finish,” resulting in incredible waste.
As an example, IRS modernization started in 1990 to be delivered in 1996. Today, the work is not complete and the contractors say it’s still 5 years away. 29 years behind schedule and ~$15b over budget. Everyone loses, except the government contractors.
This must change. This week, the IRS froze ~$1.5B in modernization contracts, none of which have any effect on tax filings. All of those contracts will then either be cancelled or the contract terms will be changed to pay-for-performance.
9:25 AM · Mar 21, 2025 //
Mongoose
7 hours ago
Really, Mr. Wyden? Refund delayed? Let me tell you a story. I was working financial intelligence and got a call from a local bank. Seems they had a guy who wanted to deposit a million dollar+ check from the IRS. His tax refund, he said. The bank, which is supposed to report sketchy-looking activity on Treasury Suspicious Activity Report forms, thought this was... suspicious. On account of this guy had a W-2 job that paid him about $50,000/year. The bank really, really, really did NOT want to do this transaction, which they were certain was fraudulent.
It sounded squirrelly to me, so I called the IRS-CID special agent who handled refund frauds and was surprised to hear he already knew about it. The guy was pulling a 1099 OID fraud (it's on Wikipedia), and the bank had already told the IRS about it. I said, "Well, good, you can stop payment on the check, nip this fraud in the bud."
Nope, they'd been instructed not to interfere with the deposits/cashing of any refund checks. Go ahead and do the transaction, they told the bank. If it's fraudulent, we'll try to get the money back later. They couldn't even delay the check for a couple of weeks to do an investigation. Why? Because of Ron Wyden and people (Senators and Congressmen) like him. Apparently taxpayers(?) had been complaining to their congress folks about not getting their refunds (especially the fraudulent ones) in a timely fashion, and Ron and his buddies don't like those kinds of calls and can earn some easy constituent gratitude by squeezing IRS to push out that check post haste, so that's what IRS did.
I told the S/A that I thought he and IRS were f'n morons and told him I was going to tell the bank that I believed their deposit of the check would be a potential money laundering violation (thereby guaranteeing they wouldn't touch it or that customer with a hazmat suit). Which I did. (And in fairness, the refund fraud S/A was as distressed about it as I was.)
The crook took his business elsewhere, deposited his check, moved all the money out and when IRS finally went to get it, it was gone.
Now, multiply that little piece of insanity by a couple hundred thousand taxpayers(?) and we're starting to talk real money. Wikipedia says one 1099 OID fraud case involved three quarters of a billion dollars in false claims.
But those checks all went out because Ron Wyden doesn't want your refund delayed.
Despite receiving tens of billions of dollars for modernization under the Biden administration, the IRS claimed it didn’t have the resources to conduct necessary inspections. To be clear, The IRS, under the Inflation Reduction Act, received about $60 billion to rebuild its workforce and modernize its IT systems over the next decade.
"Officials cited a lack of resources as to why these on-site inspections are no longer conducted."
TIGTA’s findings are another major blow to an agency already struggling with data security. As this latest report reveals, the IRS is failing taxpayers in one of its most basic responsibilities: safeguarding private financial data.
The agency’s negligence goes beyond poor management—it mocks the very people it is meant to protect. Throwing documents into regular trash, failing to maintain secure bins, and ignoring security protocols sends a clear message: taxpayers are at risk, and the IRS doesn’t seem to care. The agency is not only putting your data in harm's way but also ripping you off with ineffective, wasteful practices.
Some ideas are like horror movie villains. They’re dangerous, and no matter how many times they’re defeated, they never seem to die.
The misguided idea of taxing unrealized capital gains is back on the scene. Sen. Ron Wyden, D-Ore., floated a proposal to tax unrealized capital gains in 2021.
It was widely debated in 2022, when Congress was considering a multitrillion-dollar tax and spending package.
Opposition from Sen. Joe Manchin, D-W.Va., to taxing income before it’s earned helped defeat the idea then.
But the idea was far from dead. President Joe Biden included a version of the tax in his latest budget.
Vice President Kamala Harris also has endorsed the idea.
The first step in killing a bad idea is to recognize it for the scourge it is.
A realized capital gain—which we currently tax—is the difference between the price you sold an asset for and the price you paid for it. An unrealized gain, on the other hand, is an estimate of what that difference would be if you had sold an asset that you still hold.
The difference between taxing realized capital gains and unrealized gains is the difference between the government taxing people on income they’ve actually received versus the government taxing them on income they might receive later.
It would give the government the first claim on income, taking a big slice before the supposed owner of the asset ever sees a penny.
In effect, it would turn property owners into property renters, with Uncle Sam as their landlord. //
If you bought a house for $300,000, and the value rose to $500,000 a couple years later, you could be stuck paying tax on the $200,000 of gain even as you’re struggling to make mortgage payments. At a 25% tax rate, it would cost you $50,000 in federal taxes.
It would be like having a second mortgage, but in some ways worse.
At least mortgage payments end after 30 years. But you would never finish paying off your unrealized capital gains tax payments, as long as you owned the asset and its value was increasing—even if that increase was only from inflation.
And unlike mortgages, which give homeowners clearly defined payment terms, unrealized capital gains tax payments would be unpredictable, rising or falling depending on the housing market, inflation, and subjective assessments of a house’s value. //
Those in Washington who propose taxing unrealized capital gains generally include broad exemptions for certain asset classes and based on income or asset thresholds. These exceptions would give investors a path to escape from the tax, which is better than the alternative. The tax would have fewer direct victims as a result.
But the tax-induced capital flows still would wreak economic havoc—and without managing to raise much government revenue. So, the new tax would do little to satiate lawmakers’ appetite for more tax dollars.
And once a horror movie villain—or a bad idea—gets a foot in the door, it quickly can swing the door open wide and claim more victims. When the income tax was first implemented in 1913, it applied to less than 1% of the population, and most of those who paid it paid only a 1% rate. That small initial income tax spawned something far worse and more widespread over time.
Allowing the government to tax income that doesn’t exist sets an even more dangerous precedent.
At first glance, vitamins and other dietary supplements seem like qualified medical expenses for health savings account (HSA) and flexible spending account (FSA) holders. They are designed to fill "gaps" in the average diet, offsetting nutritional deficiencies along the way — yes, even those deficiencies that can lead to larger health problems.
However, the IRS defines qualified medical expenses within the IRS Section 213(d) as “amounts paid for the diagnosis, cure, mitigation or treatment of a disease, and for treatments affecting any structure or function of the body.” The IRS has further specified that these expenses must be primarily to alleviate a physical or mental defect or illness.
So why are HSA users coming up empty when searching for HSA eligible vitamins and supplements? Learn which vitamins and supplements are HSA eligible. //
Currently, the only way to use a consumer-directed healthcare account to pay for most vitamins and supplements is if a specific vitamin or supplement is recommended by a medical professional to treat or mitigate a medical condition with a letter of medical necessity.
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