Media Analysis & Criticism

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eviltastic: Feb 8, 2004; Fan of Britches

With all this talk about correctness and truth, I think it's important to refer back to the model presented for the thread.

Correct information may be tautologically useful, but seems kind of orthogonal to the use of the model. In that sense, correctness would be about fidelity to an intended understanding, not about conveying an accurate understanding as determined by some factor outside the scope of the model. If we were to include that factor, then we still have to remember that factual accuracy of a component of a message is not the same thing as conveying an accurate understanding of information, because that's a result of the process as a whole. It's possible to convey incorrect information through entirely accurate statements, and it's possible to convey correct information through factually inaccurate statements, due to the impact those statements may have on the receiving party. It seems like the conversation might be starting to conflate the latter with the role of noise in the model, when they aren't the same thing.

eviltastic fucked around with this message at 16:11 on Apr 30, 2021

# ¿ Apr 30, 2021 16:09

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# ¿ May 13, 2024 04:42

eviltastic: Feb 8, 2004; Fan of Britches

I think I can reduce what Murgos and Jarmak were talking about to some real world events to help characterize terms. Maybe I'm showing my rear end since I'm coming at this fresh and I'm clueless about any relevant academic work, but I think I've got a good media example.

You guys may remember something about coin flips and the Iowa Democratic caucus in 2016. After the caucus, the Des Moines Register put out an article that caused problems. Here it is: https://www.desmoinesregister.com/s...-flip/79680342/

From context I'll get into in a minute, we can infer that the intended message here was of the form of a human interest story discussing a quirk of how things can happen at the Iowa caucus. The point was to explain how coin flips were used to resolve selection of county level delegates when some participants wandered off. Hey, look at our quaint way of doing things in Iowa, now please give us clicks and ad revenue.

In encoding this idea by writing it out in English language text posted to the internet, they introduced noise that really disrupted delivery of the intended message. Take a look at the final paragraphs:

quote:

Party officials recommended they settle the dispute with a coin toss.

A Clinton supporter correctly called �heads� on a quarter flipped in the air, and Clinton received a fifth delegate.

Similar situations were reported elsewhere, including at a precinct in Des Moines, at another precinct in Des Moines, in Newton, in West Branch and in Davenport. In all five situations, Clinton won the toss.

We have a big unintended message here: that an unlikely but possible thing happened, and one side won six out of six coin flips. It's also not clear from the text whether the word "reported" there is invoking some kind of journalistic activity and/or integrity or not.

There is also a source of what Murgos referenced as attenuation here in the course of transmission. Unless the reader mouses over and clicks through those links, they won't notice that the referenced sources here are all tweets. Some are from actual reporters and some aren't, some have video and some don't. One is a private account and the tweet cannot be seen. That intended message component is lost in transmission if the reader just looks at the paragraph, and is still lost for the last one even if they do click through. It's easy to miss (or on retransmission, omit) that the source here is poo poo the reporter in question saw people post on twitter.

Then the message is received and decoded (read), and we have a further source of noise introduced, when many readers took the article to say something that it does not directly say: that a total of six coin flips happened, and that the Des Moines Register, a paper of record in the state and presumably reliable source of information, had confirmed that.

So as a result of this article, a bunch of readers came to the belief that Clinton had been reported as winning six out of six coin tosses to determine delegates at the precinct level (or another level!). Some of those readers were in the media, and promptly set about retransmitting what they thought was their accurate understanding of the message, such as via this Marketwatch article: https://www.marketwatch.com/story/coin-toss-broke-6-clinton-sanders-deadlocks-in-iowa-and-hillary-won-each-time-2016-02-02

quote:

While it was hard to call a winner between Hillary Clinton and Bernie Sanders last night, it�s easy to say who was luckier.

The race between the Democratic presidential hopefuls was so tight in the Iowa caucus Monday that in at least six precincts, the decision on awarding a county delegate came down to a coin toss. And Clinton won all six, media reports said.

And there we have it, media reporting that "media reports" were saying things that no one reporter really actually said. Cue all the pundits navel gazing about probabilities and coin flips, accusations of corruption or malfeasance in the caucus, people thinking Hillary won a whole caucus that came down to coin flips, and all of it was completely loving off base.

Here's the followup article from the Des Moines Register after everyone having kittens for a few days, which is a big part of the context I mentioned at the start for interpreting all this: https://www.desmoinesregister.com/s...flips/79784762/

quote:

The actual number of caucus precincts in which a coin flip helped decide the allocation of delegates is unknown and may remain unknown. And that means the impact those coin flips had on the final result of the razor-thin race between Sanders and Hillary Clinton is likely to remain unknown as well.

The Iowa Democratic Party told The Des Moines Register on Tuesday that seven coin flips were reported through the mobile app many caucus sites used to report results. It does not identify the precincts in which they occurred. Several more coin flips were identified by the Register through interviews, tips and social media.

It appears safe to say at this point that coin flips occurred in at least a dozen precincts, and that Clinton and Sanders won roughly an equal number of them.

While a few outlets modified or pulled articles or printed followups, the whole media had pretty much moved on by the next day. With the twin harms that, (1) due to sloppy and widely amplified initial reporting, many people came to a false belief about what happened, and (2) attention was diverted from another story that could've been the focus of attention, which is that information tracking and app usage at the caucus sure looked like an unverifiable clusterfuck. I don't think it's relitigating the 2020 primary (please don't) to say maybe we'd have been better off if that bit got the attention.

If I blew it with terms or there's otherwise a better way to characterize a step there, that should at least be a decent media-event related springboard for the conversation.

eviltastic fucked around with this message at 00:31 on May 1, 2021

# ¿ May 1, 2021 00:16

eviltastic: Feb 8, 2004; Fan of Britches

Crossposting some fodder for the thread. The Treasury Department issued a report today about new measures for tax compliance. The reason it's in the news right now is that it mentions bitcoins. Naturally, media reporting is hyperventilating about the small portion of it that mentions crypto, and none of the rest. Clicking through the first articles to come up on google that weren't just some rando, I didn't see a one where the reporting was something other than hot garbage. I'm typing this up as everyone's racing to crank out their initial hot takes, so that may change. (fake edit: it did, for example this Reuters article is much better)

Here is the announcement. I'm linking the webpage describing the report rather than direct linking the PDF as I did in USNews, because it shows the context that is being stripped from the news stories. Just glancing over this, you can immediately tell that this report is fundamentally not about cryptocurrencies. Anyone presenting it that way is being deliberately misleading. You won't find any direct mention of them on that announcement page. If you are familiar with crypto issues you'll immediately spot how it's going to come up because this is a report about how the IRS is trying to ramp up its enforcement efforts. But this is not a decision to crack down on cryptocurrencies. It is about efforts to crack down on tax evasion which, in part, implicate cryptocurrencies.

This is the first article I saw on Google. It leads with

quote:

KEY POINTS:
The Treasury Department announced that it will require any transfer worth $10,000 or more to be reported to the IRS.

�Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,� the Treasury said.

Investors have seen the value of bitcoin slide about 25% over the past month and talk of capitulation creep into online forums.

Here is the portion of text the article is referencing.

quote:

Still another significant concern is virtual currencies, which have grown to $2 trillion in market capitalization.58 Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion.59

This is why the President�s proposal includes additional resources for the IRS to address the growth of cryptoassets. Despite constituting a relatively small portion of business income today, cryptocurrency transactions are likely to rise in importance in the next decade, especially in the presence of a broad-based financial account reporting regime. Within the context of the new financial account reporting regime, cryptocurrencies and cryptoasset exchange accounts and payment service accounts that accept cryptocurrencies would be covered. Further, as with cash transactions, businesses that receive cryptoassets with a fair market value of more than $10,000 would also be reported on. Although cryptocurrency is a small share of current business transactions, such comprehensive reporting is necessary to minimize the incentives and opportunity to shift income out of the new information reporting regime.60

So as far as the KEY POINTS go: The first is flat out unsupported. "Businesses that receive" is not the same thing as "any transfer". The author is either making an inference based on information not mentioned in the article, or is wrong. There's no effort to reconcile that point with the IRS saying "There are no new requirements on taxpayers," which would appear to contradict the claim.

edit: I'm just gonna emphasize this point because it's why was annoyed and put this post together: Every outlet is using universal language to describe this reporting requirement. More responsible outlets are quoting the actual language, but even that Reuters piece I edited in above leads with this "all transfers" kind of phrasing. At first blush, it is much more plausible to me that we wind up seeing something like requirements for cash transactions and the current IRS form 8300, which does not cover all cash transfers. It should not be too much to ask for media outlets to make a very obvious comparison between how cash reporting is handled and how bitcoin transfers with the exact same reporting limit are handled. Particularly when the report itself invites that comparison.

The second is a thing that is said within the report, but is not a key point of any sort. It's mentioned to lead you to believe that the IRS is very concerned about people using crypto to evade taxes now and as a result is somehow cracking down on crypto. That's not what the report says. It says not much business income is in cryptocurrencies, but that could change in the future, particularly given the other regulations that are coming down the pipe. The footnote in the report references early studies, and cites a 2013 study indicating that crypto is potentially useful for tax evasion. There is no claim there about present tax evasion using cryptocurrencies. We may all know cryptocurrencies are used to facilitate illegal transactions, and that many of those folks, the exchanges, and probably a fair few of the true believer crowd are not exactly giving appropriate governments their cut. But that's not the way the report characterizes the problem that they intend to address.

The third key point has fuckall to do with anything the Treasury Department said. It's there because the author is padding the rest of the article as I write this with additional updated content related to cryptocurrency to get more clicks.

More importantly, the article, at the time I first read it, didn't have this paragraph, which was added:

quote:

The Treasury Department�s release came as part of a broader announcement on the Biden administration�s efforts to crack down on tax evasion and promote better compliance. Among proposals officials are considering are bolstered IRS funding and technology, and more severe penalties for those who evade their obligations.

The first way the article was presented, and the rhetoric it still uses, implies there's a cryptocurrency-focused crackdown when that's not happening. This blurb does note that there is in fact possibly a whole lot to talk about from this announcement that is actually not bitcoin related...but it still misses the goddamn point. The whole reason cryptocurrencies came up is that the IRS is trying to (and may actually for once have the cash to) modernize its enforcement efforts, and they want that to include a focus on increased third party reporting requirements. The IRS loves third party reporting requirements, because it gives them a second set of books to check against. And both people and businesses are a lot less likely to lie to the feds to protect someone else than they are to cook their own books.

Here's the full context that precedes the bit everyone's talking about.

quote:

B. Increased Information Reporting
The second step in the compliance agenda involves shining light on opaque income streams, including proprietorship and partnership business income. Bolstering information reporting is regarded by the IRS and GAO as one of the best ways to increase the overall compliance rate,52 and existing empirical evidence confirms that introducing third party reporting requirements is effective.53

Previous changes to information reporting shed light on the significant potential of such efforts but also on pitfalls that can arise when reporting requirements are imprecisely designed. It is important to implement comprehensive information reporting regimes, as partial reforms can simply shift tax evasion into other areas.54 Further, financial institutions house a lot of valuable information, and indeed already provide third-party reports to the IRS. Leveraging this information�rather than introducing new requirements for taxpayers55�is a proven way to improve compliance.56

The President�s proposal requires information reporting on financial accounts to increase the visibility of gross receipts and expenses to the IRS. Today, business income is subject to limited information reporting. Current reporting of gross receipts exists for only certain types of revenue, and there is no information reporting on deductible expenses. This is why the tax gap for partnership, S-corporation, and proprietorship income is estimated at around $200 billion annually with the net misreporting percentage for certain income categories exceeding 50%.

Third party information reporting is already provided on primary income streams for the vast majority of Americans, such as wage, pension, and unemployment income. The President�s proposal would help make tax administration more equitable by subjecting financial flows, especially those that accrue disproportionately to those at the top of the income distribution, to third-party reporting as well.

The new reporting regime would build from the framework of the Form 1099-INT reports that taxpayers already receive from financial institutions when they earn more than $10 in interest from a bank, brokerage, or other financial institution. Financial institutions would simply report additional data on the financial accounts of these existing information returns. Specifically, the annual return would report gross inflows and outflows on all business and personal accounts from financial institutions, including bank, loan, and investment accounts but carve out exceptions for accounts below a low de minimis gross flow threshold.57

Other accounts that are similarly situated to financial institution accounts would also be covered under this new reporting regime�for example, payment settlement entities would also be required to report gross receipts and gross purchases. The reporting regime would also cover foreign financial institutions and crypto asset exchanges and custodians.

These new reporting requirements would come with no additional reconciliation requirement for taxpayers. For already compliant taxpayers, the only effect of this regime is to provide easy access to summary information on financial accounts and to decrease the likelihood of costly �no fault� examinations once the IRS is able to better target its enforcement efforts. For noncompliant taxpayers, this regime would encourage voluntary compliance as evaders realize that the risk of evasion being detected has risen noticeably.

To arrive at a revenue estimate for the impact of a comprehensive information reporting regime, the Office of Tax Analysis began with an estimate of the tax gap for business income which included Schedule C proprietorship income, Schedule E rent and passthrough income, and small corporation income as well as the portion of the employment tax gap associated with business incomes. This tax gap estimate was then reduced to reflect the expected increase in voluntary compliance once taxpayers realize that the IRS has a lens into business income. The revenue estimate added two assumptions: first, a reduction in the steady state share of the tax gap due to increased voluntary compliance as taxpayers react to increased information reporting; and second, a gradual increase of voluntary compliance that phases in over time.

The revenue estimates assume that the bank reporting proposal will become effective for tax year 2023, building in implementation time for the IRS and for financial institutions. The Administration would concurrently seek out ways to reduce any new burden on financial institutions associated with this information reporting requirement.

This additional information reporting would also enhance the effectiveness of enforcement measures, as it will provide a proxy measure for a taxpayer�s potential income position, and suspect account flows could help the IRS better target its enforcement activities. This would benefit compliant taxpayers, whose risk of costly no-fault audits would decrease as the IRS better targets enforcement actions. According to the Office of Tax Analysis, the increase in compliance that would result from this new reporting regime is estimated to raise $460 billion over the next decade.

Challenges of Cash and Virtual Currencies
For a new information reporting regime to shed light on previously opaque income sources effectively, it is imperative to prevent business income from being shielded from reporting requirements. This is why the new Form 1099 reports would also be required from payment services providers so that businesses cannot shift out of traditional financial institutions to other kinds of platforms and avoid making their income visible to the IRS.

Another concern is that an information reporting regime will shift taxpayers toward a greater use of cash. Although information reporting may push some taxpayers to transact more in cash to avoid the reporting, it is unlikely that a substantial share of the business tax gap will move to cash-based transactions. Businesses already have incentives to use cash as much as possible to avoid detection via bank statements obtained in an audit, but there are practical barriers�such as security risks and the difficulty of spending large amounts of cash for certain transactions�to expanding the use of cash without depositing it in a bank account.

Bolding mine, numbers are footnotes that I didn't plug in. If you are a tax nerd or care about tax enforcement, this is interesting stuff! They're dropping some big hints here about where they are going to be placing more emphasis on enforcement, and how they're going to do it. This is the real story, which could have an impact to the government's bottom line to the tune of tens or hundreds of billions of dollars. These requirements could be a big deal in some industries. Relegating it to a footnote of a conversation about the potential impact to bitcoins from somebody trying to get the coin exchanges to report things is hiding the ball for clicks.

There's plenty of other fodder for comment in there too that's unrelated to bitcoins - regulation of tax preparers, the IRS's woes with its ancient system that predates the Commodore-64 by two decades, and so on.

e: buncha edits to tighten up lazy language, sorry

eviltastic fucked around with this message at 00:07 on May 21, 2021

# ¿ May 20, 2021 22:37

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