Internal Revenue Service Commissioner
Charles O. Rossotti
1111 Constitution Ave NW
Washington, DC 20224
Re: Trader Tax Relief & Corrections
Commissioner Rossotti:
Over the last few years, Congress has passed many new laws that are quite beneficial to traders â i.e., those who make part of all of their income trading securities and/or commodities. Unfortunately, the IRS has done a poor job in translating those new laws into IRS tax code, regulations and revenues procedures. As a result, many traders have been unfairly penalized.
Not only has the IRS "sold traders short" on delivering what Congress intended (i.e., ordinary loss treatment for ALL traders), it has also increased the number of audits it performs on traders, and it is acting with impunity.
In 1997, Congress passed new tax laws granting traders the ability to treat their trading gains and losses as âordinary.â Ordinary gains and losses, for tax purposes, are far superior to capital gains and losses. This is the same tax treatment already enjoyed by those who qualify as âdealersâ in securities and/or commodities (under Internal Revenue Code Section 475 â mark to market accounting). However, traders who wished to take advantage of these helpful laws had to âelectâ this treatment, by April 15 of the current tax year, in a statement to the IRS.
Unfortunately, it has been far too difficult for the majority of traders to do this on time, as the IRS guidelines are vague, confusing and often not updated in time to reflect new information. The unacceptable result is that a large number of traders are now facing bankruptcy because they are prevented from receiving beneficial âNet Operating Loss" refunds â refunds they are entitled to according to the laws passed by Congress.
Equally unfair is that many traders incurred these large losses in corrupt financial markets. Traders cannot deduct their real business losses, yet these perpetrators of financial market crimes get away with deducting phony losses on their ill gotten gains.
We have confidence that the perpetrators of these financial crimes will not continue to get away with them, even with their powerful lobbies in Washington. We are equally hopeful that Congress will do what is right for traders â simply, that it will hold the IRS accountable to fix what has been messed up in translating Congressâs existing legislation.
Our dynamically growing community of traders, including "day traders" and "online traders," currently number in the millions. We are spread out evenly across the nation, and we are equally represented in all demographic groups, genders, races and political beliefs. We are highly educated, have money and are actively involved in social issues, politics, voting and the economy.
We don't have a lobby in Washington to represent our interests, which could be why we are in this current predicament. In an attempt to catch up on lost time, we are using a "virtual advocacy campaign" to reach members of Congress, the media and our community. Please accept our Internet methods. As traders, we make our living over the Internet â more so than any other community in America. Please don't consider our messages to you "cyber attacks." Rather, think of them as âcyber appeals.â
To learn more about our specific appeal, kindly visit
www.greencompany.com/advocacyfortradertax.htm. It will take just 15 minutes of your time to read our âcause and missionâ and "desired tax law changes."
We very much hope that your office will contact this group in the near future in an attempt to begin fixing our problems. We can be reached via e mail at
advocacy@greencompany.com or by calling (212) 658 9502 (voice mail).
Thank you for your help.
Sincerely,
_______________________
cc:
Sen. Kent Conrad (D-ND), Chair, Senate Taxation and IRS Oversight Committee
Sen. Don Nickles (R-OK), Rnk. Mem., Senate Taxation and IRS Oversight Committee
Sen. Max Baucus (D-MT), Chair, Senate Finance Committee.
Sen. Charles Grassley (R-IA), Rnk. Mem., Senate Finance Committee.
Sen. Christopher Dodd (D-CT), Chair, Securities and Investment Committee
Sen. Michael Enzi (R-WY), Rnk. Mem., Securities and Investment Committee
Sen. John Kerry (D-MA), Chair, Small Business and Entrepreneurship Committee
Sen. Christopher Bond (R-MO), Rnk. Mem., Small Business and Entrepreneurship Committee
Rep. William Thomas (R-CA 21st), Chair, Joint Committee on Taxation
Rep. Charles Rangel (D-NY 15th), Rnk. Mem., Ways & Means, Joint Committee of Taxation
Rep. Michael Oxley (R-OH 4th), Chair, House Financial Services Committee
Rep. John LaFalce (D-NY 29th), Rnk. Mem., House Financial Services Committee
Rep. Donald Manzullo (R-IL 16th), Chair, House Small Business Committee.
Rep. Nydia Velazquez (D-NY 12th), Rnk. Mem., House Small Business Committee
