From a new paper (”Reforming the Gift Tax and Making it Enforceable“) by Mitchell Gans and Jay Soled that mostly heaps a lot of love on the Gift Tax and wants to stick it to all those rich people who “deserve” to be punished for avoiding it (emphasis added and comments in brackets):
Some commentators, however, would likely lament the institution of this third-party reporting requirement [for confirming that a gift was made]. Why? They would argue that this reporting requirement puts recipients in the uncomfortable position of having to “tattle” on donors. Put differently, does Congress really want to have taxpayers’ children (the recipients of most taxable gifts) serve as an enforcement arm of the IRS? Rejecting this reporting requirement as overly intrusive miscasts its essence, however, which is simply to check and confirm.
Notably, a similar complaint of intrusiveness was lodged against a proposal authored by an IRS research officer who, in the early 1980s, suggested taxpayers claiming their children as dependents provide the children’s social security numbers. At the time, there was an anguished outcry that this requirement was too Big Brother in nature. Congress nevertheless heeded the IRS research officer’s recommendation, and “seven million dependents . . . suddenly vanished from the tax rolls,” generating an additional $3 billion of revenue annually.
Now that’s funny. But there’s still no word yet on when the authors of this paper will be submitting a draft of new legislation to add IRS staff in the protected classes of hate crime laws.
( h/t TaxProf Blog )
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