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Comment by _jal | Hacker News Reader

> People who employ them often assume they’re fine because they haven’t been audited or caught yet, but that doesn’t make them legal.

There's also the pack effect. Kind of like how few folks taking the EITC actively trade stock, it looks 'normal' for rich people to do these things, whereas the same device when used by someone of more modest means is more likely to attract attention.

Not to mention having fewer resources to fight if you are audited.

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> Not to mention having fewer resources to fight if you are audited.

Can't find the link now, but I read somewhere that the IRS avoids audits if the risk of losing is higher (i.e. the person in question has more resources to fight it $). So their enforcement is heavily skewed towards average people.

Which corroborates this statement.

> more modest means is more likely to attract attention

Poor IRS, if only it had some good government contacts, it could ask them to improve the law and close those loopholes. Oh well.

The reason the IRS takes this tactic is it is literally underfunded. It does not have enough money to go after every millionaire and fight those court battles, even though there's a near certainty that it was in the legal right and enforcement of that type would bring back multiple dollars for every dollar spent on enforcement. The IRS does this calculus every single year, submits it as a report to the legislature, and then often has it's budget cut

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