Speaking of Privacy, What About Tax Returns?

There is nothing liberal remaining in liberalism... [Gilder's Daily Prophecy] June 18, 2021 [UNSUBSCRIBE]( | [ARCHIVES]( [Special Rebroadcast — VERY Limited Access]( [click here to replay]( recently MISSED the most important [Special Profit Briefing]( Jim Rickards has ever given. In case you don’t know, Rickards is the one of the media’s biggest “go to” guys for context on global macroeconomic happenings… And how to make money from them. In his new Briefing, he blew the lid off a growing international conflict that’s already costing $6.6 trillion a day. Yes, trillion… Every. Single. Day. More importantly — Jim reveals his [proprietary secret]( for profiting from this massive daily flow of capital. [Click here to watch the replay.]( [Warning] Do you enjoy receiving Gilder's Daily Prophecy? Please [Click Here Now]( so we know to continue sending you Gilder's Daily Prophecy for free! Speaking of Privacy, What About Tax Returns? [Jeffrey Tucker]Dear Daily Prophecy Reader, This week the lefty group ProPublica seized the headlines with a claim that many billionaires pay little or nothing in taxes. They claimed to prove this with the tax returns of many thousands of individuals, so this might just be the first information dump of many. Yes, you might be hit next. Anyone could be. The “news” itself was entirely bogus. The claim was based on totaling unrealized gains from asset appreciation which are not taxable. There was nothing in the revelation that could not have been gleaned from the Forbes list of richest Americans. Truth is that billionaires pay vastly far more in tax than the rest of us. The Real Issue The purpose of the disclosures — and the reason they are being celebrated — is due to a push for tax increases and a big new budget expansion ($80 billion) of enforcement, with the intention to snag another $700 billion in revenue from Americans. Which is to say: this is propaganda deployed for political purposes. Well timed. The real kick in the chops here pertains to the lack of security over tax returns themselves. How the heck did ProPublica get them? They claim to be doing journalism and only reporting on what landed in the public domain. They bear no legal liability for the pilfering itself, so they say. You know, they just found them on a park bench or something. This problem has been getting worse year by year. Two years ago, the New York Times somehow came across years of Donald Trump’s tax returns. The paper wrote many days of breathless reports of what turned out to be tremendously boring. Sometimes he made money and sometimes he didn’t. He carried over losses year to year. It’s called tax accounting. All these stories have missed the real point: tax returns are no longer secure. To be sure, tax returns of the very wealthy pass through many hands. They could have been stolen at any point in the preparation process. However, this seems a bit unlikely since it is not the case that thousands of the well-to-do all shared the same corrupt accountant. Plus, there are 10 years of returns here. How likely is it that 1,000-plus rich people used the same tax services for 10 years? A more likely possibility was [raised]( by Senate minority leader Mitch McConnell: "My guess is the IRS, somebody at the IRS leaked this in order to affect the tax debate and remind people that there are some very wealthy Americans," he said. "There are some very wealthy Americans. But it's important to remember we don't tax wealth." He is right. The claim that someone at the IRS would flagrantly violate the existing law that makes such disclosures illegal is alarming. It should chill anyone who cares about privacy, as “liberals” once claimed that they do. The theory that this was internal makes sense. We are talking about a heavily politicized and unionized government bureaucracy that is always seeking more power. There is every incentive for one or a few employees from within to pinch some returns out of the vast database if it would mean drumming up support for more funding, discretion, and power. [$10 billion bet... this is a real winner]( How Secure Are Your Returns? How I can possibly be speculating this way? Don’t I know that the government has promised not to do that? Surely we can trust the government! The IRS plainly [says]( “You are probably aware that the law protects your tax return information from disclosure to other parties by the Internal Revenue Service. IRC Section 6103 generally prohibits the release of tax information by an IRS employee.” The regulations [seem]( protective of privacy: (a) In general. Section 7216(a) prescribes a criminal [penalty]( for [tax return preparers]( who knowingly or recklessly disclose or use tax return information for a purpose other than preparing a tax return. A violation of section 7216 is a misdemeanor, with a maximum penalty of up to one year imprisonment or a fine of not more than $1,000, or both, together with the costs of prosecution. Section 7216(b) establishes exceptions to the [general rule]( in section 7216(a) prohibiting disclosure and use. Section 7216(b) also authorizes the Secretary to promulgate regulations prescribing additional permitted disclosures and uses. Section 6713(a) prescribes a related civil penalty for disclosures and uses that constitute a violation of section 7216. The penalty for violating section 6713 is $250 for each prohibited disclosure or use, not to exceed a total of $10,000 for a calendar year. Section 6713(b) provides that the exceptions in section 7216(b) also apply to section 6713. Under section 7216(b), the provisions of section 7216(a) will not apply to any disclosure or use permitted under regulations prescribed by the Secretary. A closer look at the process of filing reveals more holes in the system that allow third parties to share tax returns under some circumstances. If you look carefully at consent forms, it is likely that the terms and conditions enable preparers to sell your data, again with your consent. The IRS pushed a change in the law in 2006 that generally approves. Preparers now routinely provide the following notice as provided by the IRS: "Warning: Once your tax return information is disclosed to a third party per your consent, we have no control over what that third party does with your tax return information. If the third party uses or discloses your tax return information for purposes other than the purpose for which you authorized the disclosure, under Federal tax law, we are not responsible for that subsequent use or disclosure, and Federal tax law may not protect you from that disclosure." Whether and to what extent these exceptions account for the leaks and pilfering of tax returns is up for debate, and we’ll probably never know. The higher the penalties, the more incentive there is to guard the source of the leak, whether from the agency itself or from a third party. In either case, the motivation is likely political. The Media is finally Catching on [screens from laptop]( been talking about [THIS]( since late last year. And now the media too confirm the world’s richest man’s “second act” could be as big as his first. For once, the media have got it absolutely right This “second act” is a prime opportunity for Americans to get in on the ground floor of potential wealth-creating opportunity. But you have to hurry. A major reveal is expected on August 23. After which it could be too late. To see how you can potentially cash in on the developing situation [Click Here Now.]( The Politics of Theft A more alarming problem has to do with the media culture surrounding these disclosures. When Trump’s personal privacy was assaulted with the New York Times disclosures, he protested. The press jeered as if rich presidents obviously have no rights and certainly none to privacy in their personal finances. He was hounded for years to release his returns even though doing so was and remains his option. There is an ethos surrounding these new disclosures that once you are rich, you have no human rights. All is fair in the war on the rich. I’ve not seen or heard a word of sympathy from major media for these people who have been victimized, nor a warning that the disclosures should stop. Not at all. ProPublica promises more of them. Some Republicans object but they are being treated as nothing but shills for wealth. To be sure, the IRS has promised a full investigation, having referred the matter for investigation to the FBI and the US attorney's office in the District of Columbia. What will come of it? It’s a reasonable prediction: nothing. As [part of]( tax plan, there are more mandatory disclosures coming. The plan would require banks to report not just wages and salaries but loans and investments – essentially all money flows into and out of all personal and business accounts. Compliance would be onerous which is why banks are objecting. They do not want to be conscripted to become full-time tax collectors for the Biden administration. But far more serious are the privacy implications. The real takeaway from these latest leaks is that the data are not secure. They can be stolen and leaked with immunity, provided that the motive is political – and there is a media machinery available to cheer it all on. [Why Google, Apple, Facebook are teaming up?]( Today’s Prophecy The war on the rich is real, fomented by the party in power, and targeting fundamentals of privacy, equality, and fairness. The Biden administration is backed by a massively powerful media apparatus that celebrates the war on wealth as great and wonderful. Back in 1913 when the income tax was enshrined in the US Constitution, a few lone voices warned that this amounts to a massive danger to American liberty. It grants governments the right to know everything it wants to know about the personal finances of every American. It could mean the eventual end of American liberty. This is why Frank Chodorov referred to the income tax as the “root of all evil.” That’s always been true, but random disclosures of private filings really does take us to a new level. It’s happening now because of a certain fanaticism that has taken over government at the highest levels. The people in power believe that they have 18 months to realize their dreams before they risk losing control of the entire legislative branch, and then the presidency too in 2024. Based on the current D.C. trajectory of crazy, this is just the beginning. There is nothing liberal remaining in liberalism. Whether it is lockdowns, censorship, pilfering tax returns, or the outright demonization of the wealthy – any means to the end – the trends coming from D.C. today have the look and feel of a galloping revolution against freedom and prosperity. Regards, [Jeffrey Tucker] Jeffrey Tucker July 14th: America’s Financial Extinction Event? [Destroyed city]( election is over… The corrupt media declared Joe Biden the winner… And that bad news is about to get a whole lot worse… Because the prophetic analyst who predicted the subprime mortgage meltdown… the financial crisis of 2008… and Brexit… Just issued another shocking prediction… If you and your family are not prepared for what he says is coming your way on July 14th… You need to take action now. [Click here for the full details.]( [Three founders Publishing]( To end your Gilder's Daily Prophecy e-mail subscription and associated external offers sent from Gilder's Daily Prophecy, feel free to [click here](. If you are having trouble receiving your Gilder's Daily Prophecy subscription, you can ensure its arrival in your mailbox by [whitelisting Gilder's Daily Prophecy](. Gilder's Daily Prophecy is committed to protecting and respecting your privacy. Please read [our Privacy Statement.]( For any further comments or concerns please email us at GildersDailyProphecy@threefounderspublishing.com. Nothing in this e-mail should be considered personalized financial advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after online publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. © 2021 Three Founders Publishing, LLC., 808 Saint Paul Street, Baltimore MD 21202. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Three Founders Publishing, LLC. EMAIL REFERENCE ID: 401GDPED01