Posted on 04/15/2014 11:46:41 AM PDT by SeekAndFind
The IRS is cash-strapped and audit rates are down, but that doesn’t mean the average Jane or Joe can hide the ball from the tax man.
The tax-collecting agency devotes more resources to chasing big fish like convicted tax cheat Wesley Snipes than the average middle-class taxpayer, that’s true. But the IRS is now using sophisticated software and data analysis that puts it in touch with taxpayers before the official audit process begins.
“Now with automation and the electronic submission of W-2s and 1099s, the IRS just matches the information,” said David Kautter, managing director of the Kogod Tax Center at American University. “If you don’t report something, it is almost automatic that you’ll get a letter from the IRS.”
The agency reported it reviewed less than 1 percent of all tax returns in 2013, compared with slightly over 1 percent the prior year, continuing a downward trend. The average audit rate in 1996 was about 2 percent.
Individuals with income topping $10 million saw an audit rate of more than 24 percent, while the rates for people who earned between $25,000 and $200,000 never climbed above 0.77 percent.
But the audit rates are somewhat misleading.
The vast majority of taxpayers receive W-2 forms that detail automatically generated earnings from an employer, bank or other institution. All of that information is simultaneously transmitted to the IRS and stored digitally. Agency computers can quickly and easily check to make sure the taxpayer’s figures match those reported by their employer or bank.
(Excerpt) Read more at politico.com ...
Politico doing fearmongering on the IRS’ behalf?
The same wonderful computer systems that regularly spit out letters to businesses that haven’t existed in decades (nor do they actually have any out stand taxes owed).
The same supposedly upgrades systems that cost huge sums of money, all for the sake of preventing fraudulent returns (ID theft being a primary target), that actually opened the door to much greater ID theft and fraudulent tax returns...
The same systems that “miss” data that has been correctly provided, resulting in threatening letters and even audits that require repeated submissions of the same forms...
It’s all about not being too greedy ...
Sounds like it.
If the IRS is so great at catching scammers then why did it pay out $4 BILLION (with a B) to crooks?!
“A government report in November said the IRS issued $4 billion in fraudulent tax refunds over the previous year to criminals who were using other people’s personal information.”
IRS refunded $4 billion to identity thieves last year, inspector general’s report says
Precisely. Things that make you go “hmmmm”.
The same wonderful system that sent more than $46 million in tax refunds to 23,994 “unauthorized” alien workers who all listed the same address in Atlanta, Ga., in 2011.
Give us one more reason to hate you, IRS. One day you WILL cross the line and its not oing to be pretty. We are severely overtaxed and strained to the limit because of you now. Its not a matter of if people snap, its a matter of when...
Yeah, unless you’re an “unauthorised alien”:
Funny that the IRS does not look at what events launched the movement for independence from the British Empire and compares its own actions.
Around 2008 they gave up on their old master file system and just starting putting all returns in a new one, which actually works pretty well.
Now paper 1099’s still get scanned by high speed OCR scanners and stored electronically in another system.
But if you’re an IRS employee and want to access those 1099’s, they have to print them off and send them to you via inter-office mail.
File paper.
I was audited in the mid-80s because we didn’t report $32 in interest income. By mistake.
As a kid in the 70s, I remember part of a weekly (now worker) reader about how things were regarding society. The part that still sticks at the lamentation about a computer with cards that crumbled that belonged to that jbt organization.
The same computer system that can’t match 2000 refunds going to same address for same tax year.
Brought to you by the same government that brought you the Obamacare website.
Brought to you by the same Sec. of the Treasury who cheated on his own taxes.
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