Tackling FOIA for the Bankruptcy

      If you are preparing for a bankruptcy, it is very important to get your tax transcripts from the IRS.  You must identify the exact dates of the filing of the returns and the dates of assessment to discover possible complications such as events that toll the various time requirements.  

      A FOIA request should include a request for the following:

1.  The IMFT-30 Transcript for personal 1040's.

2.  The Collection File.

3.  The complete TDI File.

4.  All notes and histories.

5.  All statutory notices of deficiency.

6.  All records of assessment provided for by the regulations (Reg. Section 301.6203-1, Method of Assessment).

      The request should be addressed either to the local Disclosure Officer or the Disclosure Officer at the service center where the individual mailed his tax returns.

      The transcripts can then be used to analyze the dates of filing and assessment to be sure that everything is ready for the bankruptcy. 

Wealthfare for

 the Rich

      The federal government gives away about $448 billion a year to rich individuals and corporations.  Since the current federal deficit is running at $130 billion, we could wipe out the whole deficit if we cut wealthfare by about 25%.  Wealthfare for the rich costs about 31/2 times as much as welfare for the poor.  Three years of wealthfare costs us the same as it costs to run the government for one year and 12 years of wealthfare equals about 200 years of deficit spending.  Following is a list of the wealthfare that is ripping off the average middle class taxpayer (These amounts are in billions of dollars per year):

1.  Military waste and fraud $172.      

2.  Social Security tax inequities $53.

3.  Accelerated depreciation $37.

4.  Lower taxes on capital gains $37.

5.  The S & L Bailout  $32.

6.  Agribusiness subsidies $18

7.  Tax avoidance by

     Transnationals $12

8.  Tax-free munibonds $9.1

9.  Media Handouts $8

10.  Excessive government

       pensions $7.6

11.  Insurance loopholes $7.2

12.  Nuclear subsidies $7.1

13.  Aviation subsidies $5.5

14.  Business entertainment $5.5

15.  Mining subsidies $3.5

16.  Oil and gas breaks $2.4

17.  Export subsidies $2

18.  Synfuel tax credits $1.2

19.  Timber subsidies $2

20. Ozone tax exemptions $320 million

21. Miscellaneous rip offs $1.6

22. Billions more not mentioned above.

      There is not room in this newsletter to go into detail on each of the above issues, so let's look at a couple of big ones.

       Military waste and fraud is an incredible black hole.  During the year 1996, the budget for the Pentagon was $265 billion  which is $7 billion more than it requested.  That amounts to 5% of our GNP. We spend almost four times more than Russia, the next largest military spender.  Our military budget is larger than the next 9 countries under us in spending put together.  Our military spending accounts for about 40% of world military spending even though our GNP is about 20 percent of the world's total.  The waste in the military industrial complex is beyond anything that you can imagine.  According to a U.S. Senate hearing, $28 billion was lost or unaccounted for between 1985 and 1995 alone.  In 1992 the Army Corps of Engineers "lost" a billion and a half worth of equipment. 

      The Social Security system is another area where the government has raised the taxes considerably on the poor and the middle class.  Ronald Reagan signed the largest tax increase in history by raising Social Security tax rates while he lowered income tax rates.  Social Security tax is a major method of taking the tax burden away from the rich.  For example, there is a ceiling of about $63,000 on how much earned income is taxed.   That means that Bill Gates who is worth 40 billion pays the same social security tax as a many middle class breadwinners.  A family that makes $40,000, pays about 8%of its income in social security tax while one that makes ten times as much pays out less than 2%. Meanwhile, the government is "borrowing from the Social Security trust fund to pay for the massive military waste. If the wealthy had to pay Social Security taxes at the same rate as the middle class, the government would take in about $50 billion more per year.

      You have all heard about the S&L Bailout, the savings and loans got into incredible trouble because of bad management and corruption in the ranks.  The Reagan Administration failed to police the situation and so the Feds had to bail the whole thing out.  The $157-billion bailout was financed by floating 30-year bonds.  The S & L Bailout amounts to a transfer of wealth from ordinary people to the rich investors and the crooks, most of whom were never prosecuted.