Repealing the Estate Tax by the Back Door

by Mike Hall, Jul 30, 2006

When it comes to the Bush administration and tax breaks for the wealthy and well-connected, after six years you’d think it would be safe to say, “I’ve seen it all.”

Well, just when you think you’ve seen it all, something brand new pops into view.

Despite the Bush White House and Republican congressional leaders’ repeated attempts, they still haven’t completely repealed the estate tax—the tax that only applies to multimillion dollar estates.

It’s the job of the Internal Revenue Service (IRS) to make sure those millionaire families pay their taxes. Sharp-eyed lawyers at the IRS are the enforcers. But the Bush administration has decided there are just too many enforcers keeping tabs on the superrich estates.

As The New York Times reported:

The federal government is moving to eliminate the jobs of nearly half of the lawyers at the Internal Revenue Service who audit tax returns of some of the wealthiest Americans, specifically those who are subject to gift and estate taxes when they transfer parts of their fortunes to their children and others.

The administration plans to cut the jobs of 157 of the agency’s 345 estate tax lawyers, plus 17 support personnel.

The IRS spins it as follows: An early-term Bush administration tax cut package reduced the number of estates facing the tax, so the IRS just doesn’t need so darn many lawyers.

The New York Times reported that several IRS tax lawyers have a different view:

But six IRS estate tax lawyers whose jobs are likely to be eliminated said in interviews that the cuts were just the latest moves behind the scenes at the IRS to shield people with political connections and complex tax-avoidance devices from thorough audits.

Sharyn Phillips, a veteran IRS estate tax lawyer in Manhattan, called the cuts a “back-door way for the Bush administration to achieve what it cannot get from Congress, which is repeal of the estate tax.”

It looks like when the very, very wealthy finally figure out a way to take it with them, they’re going to have a lot more to take, thanks to their friends in the Bush administration.

Click here and here to read the latest in the estate tax fight.

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