The IRS And The Tax System:

Integrity And Fairness For Whom? (by Christopher Bergin , contributor at f Forbes)

There are many people who no doubt would like to harm the IRS. Some of that comes with the territory –- after all, most taxpayers dislike the tax collector. But right now, the one hurting the IRS the most is the IRS itself. In the latest bonehead maneuver from the IRS, the Treasury Inspector General for Tax Administration issued a report this week that revealed that agency employees with conduct and tax compliance problems received bonuses and awards.

According to a news story from Tax Analysts:

Among employees who received awards between October 1, 2010, and December 31, 2012, 1,100 with federal tax compliance problems received $1 million in cash awards, 10,000 hours in time-off awards, and 69 quality step increases within a year after the IRS substantiated their tax compliance problems. Also, 2,800 employees with conduct issues requiring disciplinary action received more than $2.8 million in monetary awards, 27,000 hours in time-off awards, and 175 quality step increases.

Are you kidding me?! 

Wait, because it gets even worse. These awards are not prohibited under our government’s rules.

Are you kidding me?!

As Tax Analysts reported, the TIGTA report addressed that in this way:

Although awards for employees with conduct and tax issues are not prohibited, TIGTA said that providing awards to those employees, especially those who fail to pay federal taxes, “appears to create a conflict of interest with the IRS’s charge of ensuring the integrity of the system of tax administration.”

That’s classic understatement for you. There’s really no “appears” about this anymore. This is now an agency that is rapidly losing its way under an administration and a Congress that apparently could care less.

The IRS’s mission statement couldn’t be clearer:

Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

If some of the tax cops aren’t playing by the rules – and getting bonuses for it – how does that provide us taxpayers “top quality service” and help us understand and meet our tax responsibilities? The two most important words in this mission statement are “integrity” and “fairness.” The one thing largely missing from our tax code is fairness. And the one thing now beginning to disappear from the agency charged with administering that tax code is integrity.

The Credit Bureaus Love Bad Credit - And Here’s Why

Not only are the Big Three credit reporting agencies (Equifax, Experian and Trans Union) making a killing selling personal information, what most don’t realize is that they've also got an actual financial stake in gathering as many poor credit scores as possible.

Some data is more valuable than other data, which allows the credit bureaus to charge more for it. As sick as it sounds, there is more money to be made in people with problem credit, because they can be taken greater advantage of.

Consider a credit card company that charges outrageous fees, and inflated interest rates to high-risk consumers. They want to market to people with less-than-average credit.  The methodology is that these consumers will be willing to pay more to have a credit card because their credit is poor.

People with harmed, bruised, or sub-prime credit are the people who make the banks the most amount of money in fees and interest. Banks don’t get rich on consumers who get approved for 0% interest credit cards. Instead their biggest profits come from their customers who are getting charged interest rates of 25% and higher.

The only trick is that the lender doesn't want too many borrowers defaulting.

Now consider the sales department at one of the Big Three credit bureaus. Their sole job is maximizing the income they can generate off their data.  When it comes to making the most money off a credit report, sub-prime customer data is worth more than good credit consumers. So the bureaus can easily sell this data and make a lot more money.

The problem with this is that predatory lenders are the best customers that the credit reporting agencies could ask for. This is because they’re willing to pay top dollar prices in order to get access to the bottom-of-the-barrel FICO scores.

All of this means one important thing; damaged credit consumers are more valuable to the credit reporting agencies than those with good credit. This actually gives the bureaus an incentive to try and NOT fix damaged credit - since the better the credit, the less money they can make on the data.

original message from (George Wisniewski of Dispute Suite)