Accounting News Roundup: Over-promising Tax Reform and Sovereign Citizens | 04.21.17

By | 1 week ago

How’s tax reform coming along?

If there’s one success that the Trump administration can claim so far it’s this: They can over-promise and under-deliver the hell out of anything. No other modern presidency has promised so much in a short amount of time and managed to accomplish…uh, nothing? Like, not a single thing. And there’s no sign that the over-promising is slowing down. Treasury Secretary Steven Mnuchin said yesterday that a tax reform plan would be produced “soon”:

During a conference Thursday sponsored by the Institute of International Finance, both Mnuchin and Gary Cohn, President Donald Trump’s top economic adviser, raised expectations for significant tax legislation before the end of 2017.

“Just to be clear: We hope this won’t take til the end of the year,” Mnuchin said. Of the administration’s plan, he said: “We’re pretty close to being able to bring forward what is going to be major tax reform.”

And everybody’s like, “Sure.”

“Clearly they’re saying what they’d like to believe is true,” said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, a progressive policy group in Washington. “We now know that we must heavily discount their assertions,” said Bernstein, who served as former Vice President Joe Biden’s chief economic adviser.

“The lack of agreement on the desired direction for tax reform casts doubt on whether it can be done this year,” said Alan Viard, a senior scholar at the conservative American Enterprise Institute. “But I suppose end of year is still possible, if they can coalesce around something reasonably soon.”

If you know anything about how tax reform works, you know that no one really coalesces around anything ever. People piss and moan for months and months before they reluctantly go along. Congress hasn’t even hit their stride yet.

Sovereign citizens

If you enjoy a good tax protestor story, here’s an Oregonian report on Winston Shrout, a prominent “sovereign citizen” who hasn’t paid taxes for 20 years. Shrout is on trial for “13 counts of creating and issuing bogus financial documents and six counts of willful failure to file tax returns from 2009 through 2014.”

Sovereign citizens espouse crackpot beliefs about the legality of, well, pretty anything they like. Some are extreme, however, and are considered to be a risk of terrorism in the U.S. than any form of Islamic terrorism.

Shrout doesn’t seem to be the violent sort, but he is accused of floating around a bunch of hilariously bogus documents.

Government lawyers argued Shrout aimed to cheat the Treasury and banks, and preached his illegal schemes to hundreds of others in paid seminars. He purposely sent a package of 1,000 homemade International Bills of Exchange, each purporting to be a legal tender for a trillion dollars, to a small community bank in Chicago “hoping to slip one by an unsuspecting banker,” U.S. Tax Division trial lawyer Scott Wexler told jurors.

Shrout also claims that for the years he’s accused of not paying taxes, he “could never find a legal definition of the word income.”

Depending on the outcome of the trial, Shrout may be up for a senior advisory position in the Trump White House. It’s not looking good, though.

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