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In today's edition, the IRS struggles to keep up with the tax avoidance strategies of the ultrawealthy, Big Soda is making its voice heard in Philadelphia's mayoral election, the latest on President Trump's taxes, and more. 

washington watch

Chart credit: ProPublica.
  • The IRS had an ambitious plan to take on the tax-avoidance strategies of the ultrawealthy. Guess who won? "In 2009, the IRS had formed a crack team of specialists to unravel the tax dodges of the ultrawealthy. In an age of widening inequality, with a concentration of wealth not seen since the Gilded Age, the rich were evading taxes through ever more sophisticated maneuvers…The IRS’ new approach to taking on the superwealthy has been stymied. The wealthy’s lobbyists immediately pushed to defang the new team. And soon after the group was formed, Republicans in Congress began slashing the agency’s budget. As a result, the team didn’t receive the resources it was promised. Thousands of IRS employees left from every corner of the agency, especially ones with expertise in complex audits, the kinds of specialists the agency hoped would staff the new elite unit…The wealth squad never came close to having the impact its proponents envisaged." (ProPublica) In other disappointing IRS news, Congress is poised to ban the agency from building a free online tax filing system. (ProPublica)
  • A former White House counsel to President Obama is expected to be charged in a Mueller-tied foreign lobbying case. "Lawyers for Gregory B. Craig, a White House counsel in the Obama administration, expect him to be indicted in the coming days on charges related to his work for the Russia-aligned government of Ukraine. The case against Mr. Craig, 74, stemmed from an investigation initiated by the office of the special counsel, Robert S. Mueller III…Mr. Craig would become the first person who made his name in Democratic Party politics to be charged in a case linked to the special counsel’s investigation." (New York Times)
  • The House Ethics Committee reminded members and staff about the rules for private plane travel. "Back by popular demand: House Ethics rules on private plane usage. The House Ethics Committee released a memo Wednesday reminding lawmakers and staff of rules for travel on private planes…Under the House gift rules, a member is allowed to travel on a private plane if they pay or reimburse the donor for the travel. But there are strict restrictions on candidates and campaigners traveling on private aircraft. The House Ethics memo advises members to check with them before doing any travel on non-commercial aircraft." (Roll Call)
  • Legislation to bring more accountability to private sector algorithms introduced in the House and Senate. "US lawmakers have introduced a bill that would require large companies to audit machine learning-powered systems — like facial recognition or ad targeting algorithms — for bias. The Algorithmic Accountability Act is sponsored by Senators Cory Booker (D-NJ) and Ron Wyden (D-OR), with a House equivalent sponsored by Rep. Yvette Clarke (D-NY). If passed, it would ask the Federal Trade Commission to create rules for evaluating “highly sensitive” automated systems. Companies would have to assess whether the algorithms powering these tools are biased or discriminatory, as well as whether they pose a privacy or security risk to consumers." (The Verge)

states and cities

Big Soda is spending heavily to influence Philadelphia's upcoming mayoral election. Image credit: Marlith.
  • Outside groups look likely to outspend candidates in upcoming Philadelphia, Pennsylvania elections. "Philadelphia Mayor Jim Kenney holds a commanding lead in fundraising over his two rivals the Democratic primary race, according to campaign finance reports filed Tuesday. But the city may be headed toward another municipal election in which independent, outside groups spend more to influence votes than the top candidates do directly…union-backed Super PAC’s supporting Kenney and a national trade association for the beverage industry opposing him may well be the big players before Election Day." (WHYY)
  • Detroit, Michigan hires director of digital inclusion to focus on digital equity issues. "Detroit has hired its first director of digital inclusion, making it one of a growing number of cities to have a full-time employee within its government tackling issues of digital equity. The city, which announced the hire Wednesday, tapped Joshua Edmonds to fill the new role. Edmonds comes to the city from Cleveland, where he previously worked in the digital inclusion space. In Cleveland, Edmonds helped lead the deployment of more than $1.5 million of investments related to digital equity through The Cleveland Foundation, an influential community foundation in the Ohio city." (Government Technology)
  • Court finds that Virginia's automatic license plate reader program violates the state's privacy laws. "The ACLU has secured a win for privacy in Virginia after taking on the state law enforcement and their many, many automatic license plate readers. The state's ALPR track record isn't great. Law enforcement and other government agencies love the tech, even if they have a considerable amount of trouble showing that plate readers do anything more useful than catch property tax cheats. Law enforcement agencies have turned their plate readers on political rally attendees, raising First Amendment issues along with the usual privacy concerns." (Tech Dirt)


Image credit: Marco Verch.
  • Treasury department asks for more time to respond to Congressional request for President Trump's tax returns while indicating that it ultimately won't share them, setting up legal fight. "Treasury Secretary Steven Mnuchin said he needed more time to review House Ways and Means Chairman Richard E. Neal’s request for six years of President Donald Trump’s tax returns…Mnuchin’s letter, while asking for more time, nonetheless indicated what the eventual response would be…Mnuchin’s response appears to put the ball back in Neal’s court, though the 70-year-old former mayor of Springfield, Mass., has been talking all along like he was preparing for a lengthy legal battle." (Roll Call)
  • On the Democratic side, Elizabeth Warren became the latest 2020 presidential hopeful to release her tax returns. (The Hill)
  • Meanwhile, Noah Bookbinder, Gabe Lezra, and Conor Shaw explained why Congress needs to see the President's tax returns. "President Trump’s nonstop affronts to ethics and transparency are at this point almost too many to recount. After becoming the first president in more than 40 years not to disclose  at least portions of his tax returns to the American people, he  refused to divest from his businesses…For these reasons, Neal's request for Trump’s tax returns and those of eight affiliated entities serve numerous valid oversight interests. They could shed light on a number of critical questions, including whether President Trump or his businesses are receiving income from foreign sources, whether he has any previously unknown financial conflicts of interest that could be influencing his decisions as president, and whether he personally benefited from the massive overhaul of the tax code that he and congressional Republicans enacted in 2017." (USA Today)
  • The Pentagon has spent $300,000 at Trump properties since 2017. "Defense Department personnel have charged more than $300,000 at Trump-branded properties since the start of Donald Trump's presidency through last November, according to internal agency documents obtained by CNN. The transactions range from lodging expenses at the Trump National Golf Club in Bedminster, New Jersey, to restaurant tabs at the Trump International Hotel in Washington to parking fees at the Trump National Doral Golf Club in Miami." (CNN)
  • Attorney General William Barr is planning to scrutinize the F.B.I over alleged "spying" on the Trump campaign. "Attorney General William P. Barr said on Wednesday that he would scrutinize the F.B.I.’s investigation of the Trump campaign’s ties to Russia, including whether “spying” conducted by American intelligence agencies on the campaign’s associates had been properly carried out." (New York Times)


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