Starting next week, the IRS will no longer accept checks to pay your $100 million tax bill. The agency told the super-rich that the automated tools that process checks at Federal Reserve’s banks cannot properly handle checks for over $99,999,999.
Until now, checks of this size were processed manually which hiked the risk of mistakes or fraud, the U.S Treasury recently reported. So, the super-rich now need to pay their tax bills via the bank or more than a single check when there is a $100 million payment at stake.
Obama has been criticized for years that he was trying to unnecessarily raise the rich’s taxes. Currently, the President is under fire that he tries to make it really hard for the rich to pay those taxes.
“If Obama really gets mean, he’s going to make them bring in pennies or nickels,”
noted Grover Norquist, head of Americans for Tax Reform, a group that advocates for a universal, flat income tax for years.
The National Taxpayers Union also made a scathing remark on the U.S. government’s ability of handling large checks. The union proposed procedures and security to be revised instead of asking taxpayers to revise the way they make their tax payments especially when you are an “indebted federal government.”
According to recent reports, the federal government does have a real problem with taxpayers sending huge checks to its processing banks. According to a recent report issued by the Treasury Department federal banks noticed an increase in checks that are over $100 million. This year, the IRS received more than a dozen of these checks.
Officials explained that banks cannot process checks that have more than 10 digits because they lack the necessary equipment. On the other hand, the banks that do process these checks were barred from accepting them by the Federal Reserve years ago. Seemingly, the IRS didn’t learn about the measure until recently when reporters made requests for comment.
The agency urged federal banks’ executive to tell everyone about the check limit in all the “media forms” necessary. The IRS declined to provide the names of the taxpayers who submitted $100 million checks. The agency explained that confidentiality laws bar it from making such public disclosures.
According to the IRS’ 2012 reports, the country had 400 super-rich taxpayers who had an average tax bill of more than $55 million. But to have a tax payment of $100 million one would need to generate more than $300 million in taxable income over the course of one year. We may assume that only a corporation could pull off such feat. But shareholders who have over $500 million taxable income will also need to make a similar tax payment.
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