Congressional hopeful Zach Nunn says part of the Cut Inflation Act that provides extra funding to the IRS is an attack on people like Iowa businessman Mark Daggy, which is pretty true considering Daggy has over $5 million in assets in Iowa and has been sued for his business practices.
“Agents are going to look to companies like Mark’s where they’re going to try to recoup the loss-making spending they’ve been doing for years now in an attempt to recover through tax and audits, which will have an impact disproportionate on small business,” Nunn said while visiting MacDonald Letter Service Co. on Aug. 11.
A Republican senator from Bondurant, Nunn is challenging Democrat Cindy Axne for the right to represent Iowa’s 3rd congressional district, which includes Des Moines and Polk County.
Nunn’s criticism of IRS funding has become a common refrain for Republican candidates this election cycle, with many significantly misrepresenting the scope and purpose of the new IRS hires the agency is seeking. to hire.
But his elevation of this particular businessman may not have been particularly helpful to his argument, instead adding another questionable claim to Republicans’ rhetoric on the issue.
During his visit with Daggy, Nunn was joined by Sen. Lindsey Graham (R-SC) and Nunn painted a picture of Daggy as a small business man dealing with big government forces.
While talking with Nunn and Graham, Daggy said he was audited 26 times, a claim that Republicans in the state and nation later shared.
This small business has been audited 26 times by the IRS – hours and hours of paperwork and bureaucracy for a hardworking Iowan.
The kicker? The most unpaid taxes the IRS ever found was about $25.
A small sample of what to expect from the 87,000 new IRS agents proposed by Biden. https://t.co/f2u8hfp6Xl
— Kush Desai (@K_SDesai) August 11, 2022
But for Daggy to be audited 26 times, that would mean he was audited for every year he owned MacDonald Letter Service, which he bought in 1996 and became its registered agent in 1997.
According to the IRS, audits (or reviews) are performed to ensure income, expenses, and credits are reported accurately, and they play a key role in identifying errors and detecting fraudulent activity. but they are rarely performed. From 2011 to 2019, only 0.55% of individual returns and 0.92% of corporate returns were verified.
Daggy doesn’t exactly run a ma-and-pa print shop, however, and a lawsuit filed by a former employee uncovered at least one confirmed case of questionable accounting.
In his lawsuit, Eugene Williamson, the former employee, noted that he worked as a pressman for Daggy’s Acme Custom Print company, but his paychecks came from Nite Owl Print and Copy, a separately incorporated company. registered to Mark Daggy’s wife, LeeAnn.
Williamson, who is black, said Daggy told him he was fired because he had filed a complaint with the Iowa Civil Rights Commission against a former employer for racial discrimination. Daggy admitted to being tipped off to Williamson during an unemployment hearing when the terminated employee applied for benefits.
The terminated employee sought “damages, including but not limited to mental and emotional distress; to fear; anguish; humiliation; embarrassment; joy of life lost; lost wages, benefits, future earnings and other employment emoluments.
The lawsuit was later dismissed with prejudice, but Daggy has been attached to another business lawsuit since dismissed.
In 2012, the Gold-Eagle Cooperative sued Daggy after he was hired to deliver 10,000 bushels of soybeans and 30,000 bushels of corn. According to the since-dismissed lawsuit, Daggy did not deliver a single grain to the cooperative.
MacDonald Letter Service Co., where Nunn and Graham met Daggy, is one of many businesses Daggy owns or is affiliated with. A few others include Acme Custom Print, Acme Printing Co., Envelopes Tomorrow, and Nite Owl Printing / Nite Owl Print and Copy, all of which are in Polk County.
Daggy and his wife also own nearly 330 acres of farmland in Humboldt County, not including land he owns jointly with his son, according to county property records.
About this IRS funding…
A recent string of attacks Nunn has used against Axne underscored his support for the Cut Inflation Act, sweeping federal legislation that addresses everything from climate change to capping insulin costs for Medicare beneficiaries.
The bill also provides $80 billion in additional funding for the IRS, but Nunn and other Republicans have twisted the facts about how that funding will be applied.
Nunn says the IRS wants to hire more than 80,000 new federal agents to go after people like Daggy, whom he has repeatedly referred to as a singular small business owner. This despite the fact that Daggy owns several commercial and residential properties in Polk County and owning over 300 acres of farmland in Humboldt County which sold for $11,506 per acre in 2021.
According to the White House, individuals and small businesses earning less than $400,000 a year will see no additional taxes under the Inflation Reduction Act. However, there will be a minimum 15% corporate income tax for the largest profitable corporations, 55 of which paid no federal income tax in 2020.
About those IRS agents…
The estimated number of new IRS agents is exaggerated. According to PolitiFactthe 87,000 number that Nunn and other Republicans cited comes from a 2021 Treasury Department report, but the actual number of new hires has yet to be decided.
Additionally, not all new hires will be tax officers, as the IRS also hires specialized law enforcement personnel, updates its information technology department, and invests in taxpayer service. .
Taxpayer service includes “pre-filing assistance and education, filing and account services, taxpayer advocacy services and other services,” according to the text in the Invoice of 730 pages.
Otherwise, FactPolicy notes that the IRS currently employs about 80,000 people – the lowest number since the 1970s – and expects 50,000 to 60,000 retirements within six years, so a number of new recruits would fill some of these jobs in addition to the new specialty areas.
In a letter to CongressIRS Commissioner Charles Rettig said his agency has been understaffed for years and that “improved IT systems and taxpayer service will actually mean that honest taxpayers will be better able to comply with tax laws, which will reduce the likelihood of being audited and a reduced burden. on them.”
by Ty Rushing
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