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Internet Sales Tax: IRS Scandal Raises Serious Questions

Each successive day, the stories of the intimidation of conservative grassroots groups by the Internal Revenue Service (IRS) grow more bizarre.

Yahoo reports the IRS swiftly approved one conservative group’s non-profit application after the group applied with a “liberal-sounding name.”  Breitbart revealed the IRS also targeted a “conservative Hispanic outreach group that educates Spanish-speaking and English-speaking Hispanic communities on the US Constitution.”  ABC News quotes an Ohio woman who said the IRS “wanted to know what materials we had discussed at any of our book studies.”

On his Facebook page, Rep. Steve Womack (R-AR) called it a “serious abuse of government.”  The only way to limit the abusive nature of government is to limit the size and scope of government.

Unfortunately, the opposite is happening under President Obama’s watch.  As Heritage’s Christopher Jacobs points out, “At a time when doubts are growing about the IRS’s politically biased behavior, Obamacare grants the agency massive new authority to implement its complex and bureaucratic regime.”

Obamacare is not the only power grab for tax bureaucrats, though.  Missed amongst the headlines is the so-called Marketplace Fairness Act, more commonly known as the Internet sales tax, would grant sweeping authority to tax bureaucrats in all 50 states.

If the Internet sales tax were to become law, online retailers would become tax collectors for faraway governments thirsty for more revenue.  Complying with America’s 9,600 different taxing jurisdictions is no easy task, making the threat of audits from out-of-state tax bureaucrats a stark reality.  Even the New York Times’ Andrew Ross Sorkin who favors the bill shudders “about the prospect of an out-of-state tax audit.”

All of which brings us back to Rep. Womack, the lead sponsor in the House of the so-called Marketplace Fairness Act.  Can he look his constituents in the eye and promise out-of-state tax bureaucrats will not seriously abuse their newfound power?

Perhaps he should ask Bryan Snyder, the president of Bryke.com.  According to the website, Snyder starting his online business after “local dirt race track in Fayetteville was bought out by a housing developer,” thus stunting sales at his brick-and-mortar.  He says the web-based business “allows customers all over the world to get the same superior customer service, quality parts, and affordable prices that the folks in Northwest Arkansas have experienced.”

If Rep. Womack’s Internet sales tax bill became law, it would have an immediate impact on Snyder’s business.

Lance Trebesch, the head of TicketPrinting.com, put it this way:

“Filing tax returns is costly and time consuming. The proposed Internet sales tax will necessitate my filing up to 45 returns a month, more than 500 a year. Each state has different filing laws and procedures. Needless to say, my risk of audit (along with the risk of lawsuit and bank account seizure by aggressive out-of-state tax agents) will increase 45 times. I’ll have to hire one to two full-time bookkeepers, plus an outside CPA. I’ll have to implement software (which is not guaranteed for accuracy or protection from audits) costing me tens of thousands of dollars, maybe more, and devote extra days each month to additional paperwork, communications and hassles with 45 state tax departments.”

At this moment, Bryan Snyder is a success story.  He was able to adapt to Northwest Arkansas’s changing economy, but would he be able to adapt to the crushing compliance burdens of the Internet sales tax?   Is Rep. Womack comfortable exposing Synder and many others like him all across the country to unaccountable tax bureaucrats?

The so-called Marketplace Fairness Act will only serve to empower tax bureaucrats in distant lands.  Those of us who support a support a less intrusive government understand the only protection against the abuse of government is a smaller, less powerful government.

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