13,000 taxpayers to face special IRS audit - GoFuckYourself.com

tony286 · 09-26-2007, 04:54 PM

13,000 taxpayers to face special IRS audit

By EILEEN ALT POWELL
Associated Press
Published on: 09/26/07

New York ? Starting in October, hundreds of Americans will be getting "Dear Taxpayer" letters telling them they've been selected for a special audit by the Internal Revenue Service.

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The 13,000 chosen at random this year ? and similar numbers in subsequent years ? are part of the tax agency's National Research Program, which is designed to give the IRS a better understanding of how accurately income and deductions are reported and to reduce the so-called tax gap.

The tax gap, which is the difference between what taxpayers should have paid and what they actually did pay, is of growing concern because it's so big.

Earlier IRS research, which looked at about 46,000 individual tax returns for tax year 2001, found a $345 billion shortfall in tax money. After enforcement actions and late payments, that was reduced to about $290 billion ? a still-worrisome number.

The special audits will be used to help the IRS update the criteria for selecting tax returns for annual compliance audits, said Mark Mazur, the IRS director for research, analysis and statistics in Washington, D.C. Last year, some 1.2 million taxpayers were audited, the IRS said.

"That will allow the IRS to do a better job of choosing taxpayers for audit who have a higher probability of errors on their returns," he said.

This will help the agency function more efficiently and reduce the odds of burdening law-abiding citizens, he said.

"The data also can help us determine if there's a need to change the law, outreach programs or enforcement practices," Mazur added.

Mazur said that some of the noncompliance stems from taxpayers failing to pay what they actually calculated that they owed in taxes or failing to file at all. But the greatest problem, responsible for about 80 percent of the tax gap, comes from underreporting.

"That's where taxpayers put the wrong numbers down for tax liability compared to what they owe under the tax code," he said. People who work in restaurants might underreport tip income, for example, or sole proprietors might take business deductions for personal expenses.

Sometimes mistakes are accidental, Mazur said, noting that "not everyone is good at math, and some of the tax code can be complicated." At the same time, he added, the agency has to watch out for "things that look like they're not unintentional and where, at the extreme, you have criminal activity."

Mark Luscombe, principal tax analyst at CCH Inc. of Riverwoods, Ill., said the new IRS research program was designed to help officials at the IRS walk a fine line in updating statistics without upsetting taxpayers. The company, a division of Wolters Kluwer, provides tax information and services to tax professionals.

"They don't want to go back to the late 1990s, when Congress complained that the IRS was ruining peoples' lives with intrusive audits ... but they also need to improve its statistics," he said. "So they're doing fewer (special audits) but on a more frequent basis ? about 13,000 a year."

Some audits won't be apparent

In some cases, taxpayers selected for special audit won't know about them because their income and deductions can be verified by the IRS from third-party documents, such as W-2 wage statements and Form 1099 interest payment statements.

In other cases, they may be asked by the IRS for information to support their income and deduction claims, such as receipts for charitable contributions, Luscombe said.

In still others, they'll be called in to sit down with IRS examiners and go over the tax forms line by line.

"If you're one of the unlucky ones called for an in-person audit, you might want to get in touch with a tax professional who has experience in dealing with the IRS," he said.

Luscombe noted that compliance is best when income is subject to withholding by employers or confirmed by third-party reports, such as the tax forms supplied by banks and brokers to taxpayers and the IRS that detail interest payments and capital gains.

"What they find in the audits could lead to requests for more" third-party verification, he said.

Should taxpayers be worried?

"In most cases, no," Luscombe said. "But, let's face it. The IRS doesn't mind if people are a little nervous."

Unfortunately, if the IRS finds a mistake on a tax form during the course of a special audit, the taxpayer will be liable for increased tax payment and penalties, the IRS said.

LiveDose · 09-26-2007, 05:04 PM

Funny how they would never contact people if they overpaid. By that meaning people who don't take all the deductions they could...

woj · 09-26-2007, 05:56 PM

Quote:

Originally Posted by LiveDose

Funny how they would never contact people if they overpaid. By that meaning people who don't take all the deductions they could...

Actually, they do, few years ago my mom screwed up something on her taxes and actually got a letter saying she made a mistake and got a check back for a few bucks....

Spike D · 09-26-2007, 05:59 PM

Another reason the fair tax needs to be adopted...A national retail sales tax and no more audits....

Fair Tax

Worth looking into....

JD · 09-26-2007, 06:01 PM

what's REALLY funny is there's no law saying we HAVE to pay income tax.... fucking bullshit.

MikesTraffic · 09-26-2007, 06:08 PM

Quote:

Originally Posted by SPeRMiNaToR

what's REALLY funny is there's no law saying we HAVE to pay income tax.... fucking bullshit.

There is no original law saying we have to pay taxes, but after some major issues arose during war time and our exports got cut, they amended the rules to allow taxes since we weren't making money on tarrifs anymore. It's amazing how a government will change something from being unconstitutional to REQUIRED all because they are getting the fat bank they used to

Sosa · 09-26-2007, 06:15 PM

taxes blow

Matt 26z · 09-26-2007, 06:44 PM

Quote:

Originally Posted by Spike D

Another reason the fair tax needs to be adopted...A national retail sales tax and no more audits....

Fair Tax

Worth looking into....

The bureaucracy that is the US government could never implement such a radical change in how we pay taxes.

tony286 · 09-26-2007, 06:45 PM

Quote:

Originally Posted by Matt 26z

The bureaucracy that is the US government could never implement such a radical change in how we pay taxes.

The sad truth

yahoo-xxx-girls.com · 09-26-2007, 06:49 PM

Well I'm Canadian... so I will not say anything... ^^

.

minusonebit · 09-26-2007, 06:57 PM

The funny part about it is, the income tax does not apply to most Americans. See Sec 861 and/or call Larkin Rose.

minusonebit · 09-26-2007, 07:00 PM

Quote:

Originally Posted by Spike D

Another reason the fair tax needs to be adopted...A national retail sales tax and no more audits....

Fair Tax

Worth looking into....

The "Fair Tax" is bullshit. Sales taxes are just another way of shouldering the tax burden to the middle and lower classes, and finish off the process of making for-profit corporations enterprises that pay no taxes, for the few that still do pay taxes anymore.

After Shock Media · 09-26-2007, 07:05 PM

Quote:

Originally Posted by minusonebit

The "Fair Tax" is bullshit. Sales taxes are just another way of shouldering the tax burden to the middle and lower classes, and finish off the process of making for-profit corporations enterprises that pay no taxes, for the few that still do pay taxes anymore.

It would be a hell of an improvement. It would also tax a great deal of underground money. Then sure there would be some loopholes who fucking cares.

tony286 · 09-26-2007, 07:07 PM

Wouldnt want the flat tax to happen unless they repealed income tax. Dont want to wind up in a few years oh got to start the income tax back up.

D · 09-26-2007, 07:09 PM

Joy.

This reminds me of that short story, "The Lottery."

pocketkangaroo · 09-26-2007, 07:14 PM

Quote:

Originally Posted by minusonebit

The "Fair Tax" is bullshit. Sales taxes are just another way of shouldering the tax burden to the middle and lower classes, and finish off the process of making for-profit corporations enterprises that pay no taxes, for the few that still do pay taxes anymore.

You mean it would require people to actually pay taxes. 40% of our country doesn't owe a dime to the government. The top percent pays almost everything.

pocketkangaroo · 09-26-2007, 07:31 PM

Quote:

Originally Posted by Spike D

Another reason the fair tax needs to be adopted...A national retail sales tax and no more audits....

Fair Tax

Worth looking into....

The Fair Tax would destroy the new sales of a ton of things. People would start buying used cars, homes, etc. Would stunt the growth of our economy.

Spike D · 09-26-2007, 07:40 PM

Before you start slamming away, at least take the time to read about what it this is all about White Paper

There would be no income tax, the black markets would be now taxed, and we would be able to say goodbye to the IRS. The biggest obstacle would be politicians, who would lose huge power by being able to manipulate the tax code to special interests advantage. It takes an large amount of power away from the government, which we are in need of..IMHO

tony286 · 09-26-2007, 07:46 PM

Quote:

Originally Posted by Spike D

Before you start slamming away, at least take the time to read about what it this is all about White Paper

There would be no income tax, the black markets would be now taxed, and we would be able to say goodbye to the IRS. The biggest obstacle would be politicians, who would lose huge power by being able to manipulate the tax code to special interests advantage. It takes an large amount of power away from the government, which we are in need of..IMHO

I read boortz's book there are lots of holes and lots of we think it might happen. Also it make used the way to go on everything. I also highly doubt if corporations dont have to pay taxes they will drop prices. Most dont pay taxes now and they arent giving away shit.

Spike D · 09-26-2007, 07:58 PM

Quote:

Originally Posted by tony404

I read boortz's book there are lots of holes and lots of we think it might happen. Also it make used the way to go on everything. I also highly doubt if corporations dont have to pay taxes they will drop prices. Most dont pay taxes now and they arent giving away shit.

I definitely agree there are holes and it is far from perfect. But we do have some pretty good sized states with no state income tax, and since almost all loopholes if not all will disappear, and since my frustration levels with politicians has been maxed out for while, any reduction in government is a good thing in my eyes. The tax code and the IRS has become almost intolerable. (Adds self to the list of the 13,000....

)

pocketkangaroo · 09-26-2007, 08:01 PM

Quote:

Originally Posted by Spike D

Before you start slamming away, at least take the time to read about what it this is all about White Paper

There would be no income tax, the black markets would be now taxed, and we would be able to say goodbye to the IRS. The biggest obstacle would be politicians, who would lose huge power by being able to manipulate the tax code to special interests advantage. It takes an large amount of power away from the government, which we are in need of..IMHO

But how do you grow an economy that penalizes you for buying new products. People would simply buy everything they can used.

Wouldn't it also just be a cute way of elminating corporate taxes and causing a huge underground economy?

FreeHugeMovies · 09-26-2007, 08:02 PM

For those who have S corps, here is a good read.

http://www.aicpa.org/pubs/jofa/sep20...orporation.htm

Barefootsies · 09-26-2007, 08:09 PM

Quote:

Originally Posted by woj

Actually, they do, few years ago my mom screwed up something on her taxes and actually got a letter saying she made a mistake and got a check back for a few bucks....

Yep. I've had the same. A good ten years or more back in college I did not claim something or whatever. I received a $240 credit.

Peaches · 09-26-2007, 08:40 PM

I've been audited twice and both times the IRS owed me money. I'd love another one

09-26-2007, 04:54 PM	#1
tony286 lurker Industry Role: Join Date: Aug 2002 Location: atlanta Posts: 57,021	13,000 taxpayers to face special IRS audit 13,000 taxpayers to face special IRS audit By EILEEN ALT POWELL Associated Press Published on: 09/26/07 New York ? Starting in October, hundreds of Americans will be getting "Dear Taxpayer" letters telling them they've been selected for a special audit by the Internal Revenue Service. [ Submit your comments below. ] ? More business news The 13,000 chosen at random this year ? and similar numbers in subsequent years ? are part of the tax agency's National Research Program, which is designed to give the IRS a better understanding of how accurately income and deductions are reported and to reduce the so-called tax gap. The tax gap, which is the difference between what taxpayers should have paid and what they actually did pay, is of growing concern because it's so big. Earlier IRS research, which looked at about 46,000 individual tax returns for tax year 2001, found a $345 billion shortfall in tax money. After enforcement actions and late payments, that was reduced to about $290 billion ? a still-worrisome number. The special audits will be used to help the IRS update the criteria for selecting tax returns for annual compliance audits, said Mark Mazur, the IRS director for research, analysis and statistics in Washington, D.C. Last year, some 1.2 million taxpayers were audited, the IRS said. "That will allow the IRS to do a better job of choosing taxpayers for audit who have a higher probability of errors on their returns," he said. This will help the agency function more efficiently and reduce the odds of burdening law-abiding citizens, he said. "The data also can help us determine if there's a need to change the law, outreach programs or enforcement practices," Mazur added. Mazur said that some of the noncompliance stems from taxpayers failing to pay what they actually calculated that they owed in taxes or failing to file at all. But the greatest problem, responsible for about 80 percent of the tax gap, comes from underreporting. "That's where taxpayers put the wrong numbers down for tax liability compared to what they owe under the tax code," he said. People who work in restaurants might underreport tip income, for example, or sole proprietors might take business deductions for personal expenses. Sometimes mistakes are accidental, Mazur said, noting that "not everyone is good at math, and some of the tax code can be complicated." At the same time, he added, the agency has to watch out for "things that look like they're not unintentional and where, at the extreme, you have criminal activity." Mark Luscombe, principal tax analyst at CCH Inc. of Riverwoods, Ill., said the new IRS research program was designed to help officials at the IRS walk a fine line in updating statistics without upsetting taxpayers. The company, a division of Wolters Kluwer, provides tax information and services to tax professionals. "They don't want to go back to the late 1990s, when Congress complained that the IRS was ruining peoples' lives with intrusive audits ... but they also need to improve its statistics," he said. "So they're doing fewer (special audits) but on a more frequent basis ? about 13,000 a year." Some audits won't be apparent In some cases, taxpayers selected for special audit won't know about them because their income and deductions can be verified by the IRS from third-party documents, such as W-2 wage statements and Form 1099 interest payment statements. In other cases, they may be asked by the IRS for information to support their income and deduction claims, such as receipts for charitable contributions, Luscombe said. In still others, they'll be called in to sit down with IRS examiners and go over the tax forms line by line. "If you're one of the unlucky ones called for an in-person audit, you might want to get in touch with a tax professional who has experience in dealing with the IRS," he said. Luscombe noted that compliance is best when income is subject to withholding by employers or confirmed by third-party reports, such as the tax forms supplied by banks and brokers to taxpayers and the IRS that detail interest payments and capital gains. "What they find in the audits could lead to requests for more" third-party verification, he said. Should taxpayers be worried? "In most cases, no," Luscombe said. "But, let's face it. The IRS doesn't mind if people are a little nervous." Unfortunately, if the IRS finds a mistake on a tax form during the course of a special audit, the taxpayer will be liable for increased tax payment and penalties, the IRS said.

09-26-2007, 05:04 PM	#2
LiveDose Show Yer Tits! Industry Role: Join Date: Feb 2002 Location: Somewhere Out there... Posts: 25,792	Funny how they would never contact people if they overpaid. By that meaning people who don't take all the deductions they could... __________________ Scammer Alert: acer19 acer [email protected] [email protected] Money stolen using PayPal

09-26-2007, 05:59 PM	#4
Spike D Confirmed User Join Date: Dec 2004 Location: Atlanta Posts: 600	Another reason the fair tax needs to be adopted...A national retail sales tax and no more audits.... Fair Tax Worth looking into.... __________________ SoloSlutCash email: Admin (at) SoloSlutCash (dot) com

09-26-2007, 07:09 PM	#15
D Confirmed User Join Date: Jan 2006 Location: The Valley Posts: 7,412	Joy. This reminds me of that short story, "The Lottery." __________________ -D. ICQ: 202-96-31

09-26-2007, 07:40 PM	#18
Spike D Confirmed User Join Date: Dec 2004 Location: Atlanta Posts: 600	Before you start slamming away, at least take the time to read about what it this is all about White Paper There would be no income tax, the black markets would be now taxed, and we would be able to say goodbye to the IRS. The biggest obstacle would be politicians, who would lose huge power by being able to manipulate the tax code to special interests advantage. It takes an large amount of power away from the government, which we are in need of..IMHO __________________ SoloSlutCash email: Admin (at) SoloSlutCash (dot) com

09-26-2007, 06:01 PM	#5
JD Too lazy to set a custom title Industry Role: Join Date: Sep 2003 Posts: 22,651	what's REALLY funny is there's no law saying we HAVE to pay income tax.... fucking bullshit.

09-26-2007, 06:15 PM	#7
Sosa In Tushy Land Join Date: Oct 2002 Location: Nebraska Posts: 40,149	taxes blow

09-26-2007, 06:49 PM	#10
yahoo-xxx-girls.com Confirmed User Join Date: Jul 2006 Location: Canada Posts: 3,143	Well I'm Canadian... so I will not say anything... ^^ .

09-26-2007, 06:57 PM	#11
minusonebit So Fucking Banned Join Date: Feb 2006 Location: [email protected] Posts: 7,391	The funny part about it is, the income tax does not apply to most Americans. See Sec 861 and/or call Larkin Rose.

09-26-2007, 07:07 PM	#14
tony286 lurker Industry Role: Join Date: Aug 2002 Location: atlanta Posts: 57,021	Wouldnt want the flat tax to happen unless they repealed income tax. Dont want to wind up in a few years oh got to start the income tax back up.

09-26-2007, 08:02 PM	#22
FreeHugeMovies Too lazy to set a custom title Join Date: Dec 2001 Location: Charlotte, NC Posts: 14,137	For those who have S corps, here is a good read. http://www.aicpa.org/pubs/jofa/sep20...orporation.htm

09-26-2007, 08:40 PM	#24
Peaches Old broad Join Date: Oct 2002 Location: Away Posts: 13,933	I've been audited twice and both times the IRS owed me money. I'd love another one