In a move that will bother very few people, the Internal Revenue Service announced today that it will stop accepting checks for over $99,999,999 in a confounding decision that affects nearly nobody.
Critics blame Obama for IRS policy?
The reason for the new policy begins with the inability of the nation’s Federal Reserve banks to process checks of that size. As a result, they must be processed by hand which according to the IRS and the Treasury Department opens the agency up to errors, theft and fraud. The mega-rich will now be forced to wire their payments of over $99,999,999 or simply write multiple checks.
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While reading this you could be forgiven for asking yourself how many checks of this size were written to the IRS last year? The answer is….fourteen.
Strangely, the Federal Reserve hasn’t accepted checks of more than 10 digits for some time from other government agencies but that news doesn’t seem to have reached the IRS.
The rabble-rousing right including Grover Norquist, president of Americans for Tax Reform, have long maintained that President Obama has long been trying to slow down the United States’ economy with tax increases with Norquist publicly challenging members of Congress to sign a pledge to vote against all legislation that calls for tax increases despite a staggering national debt and deficit.
In what can only be considered a joke, Norquist responded to the policy change saying, “If Obama really gets mean, he’s going to make them bring in pennies or nickels.”
“You’re trying to write a $100 million check to the government and they’re treating you like dirt?” he said. “These are your customers. If this was Las Vegas, they’d give you the suite and a bottle of champagne for free.”
Pete Sepp, president of the National Taxpayers Union, chimed in with “When our indebted federal government turns down large checks for fear of fraud or mishandling, it’s time to revise processing procedures and security rather than inconveniencing or deterring taxpayers.”
Calmer heads also spoke to the policy change with a few tongue in cheek comments as well.
“I have a lot of envy,” said Rep. Joe Crowley, D-N.Y. He continued, “I don’t know if I have sympathy for someone who’s required to pay that kind of taxes.”
Democratic representative from Maryland, Chris Van Hollen, spoke to the issue perhaps forgetting that multiple checks are still allowed, “It sounds to me like these people could afford to pay electronically.”
Who sends the IRS more than $100 million?
In theory, in order for a corporation to owe the IRS more than $100 million they would need to see a profit of well over $300 million and have a pretty poor group of tax attorneys and accountants not privy to the countless loopholes many corporations use to lower their burden.
For the super rich that make enough in capital gains to owe this type of money they would need to see around $500 million in gains.
Suffice is to say, ValueWalk is reasonably certain that anyone reading this will not be affected by this new IRS policy.