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Charles
01-18-2002, 11:15 AM
The IRS will start doing random audits this year. I hope this means they will start doing something about all those lawncare people who run illegal out there. But this mean also that even the tax paying LCOs may be audited. I dont yet understand why this type of auditing would be better. They say it will cut down on unneccessary audits. Anybody got more info on it? How about just auditing people who dont pay anything? Now that would make sense to me

Craig Jones
01-18-2002, 12:23 PM
I believe they are just auditing Form 1040s. I do not think they will be going over schedule Cs. I will look for the information and try to post it.

thelawnguy
01-18-2002, 12:37 PM
Random means just that. Legit biz, scrub, and Charles alike :alien:

bruces
01-18-2002, 02:31 PM
Originally posted by Charles
The IRS will start doing random audits this year. I hope this means they will start doing something about all those lawncare people who run illegal out there. But this mean also that even the tax paying LCOs may be audited. I dont yet understand why this type of auditing would be better. They say it will cut down on unneccessary audits. Anybody got more info on it? How about just auditing people who dont pay anything? Now that would make sense to me

One reason the IRS does random audits is that is one of their means of developing statistic about trends, where mistakes & cheating are taking place, etc.

They used to do audits where they check every single item on the return to gather this same information. They have suspended that program for now.

Information from the audits they do helps them to decide what types of audits to concentrate on, thus the random audits.

They will still continue to pick returns for audited based on certain information that might stand out on the return.

As far as just auditing 1040's, not schedule C's, the schedule C is just part of the form 1040, if they audit a return, they might look at any part of it or all of it.

They generally will have some area they are concentrating on but if they see something that looks out of line in other areas, they will look at those too.

Richard Martin
01-18-2002, 04:41 PM
My local paper reported they they will mostly be concentrating on over $100,000 earners.

HOMER
01-18-2002, 06:46 PM
Guess I'm safe then!:mad: :D :confused:

Randy Scott
01-18-2002, 06:50 PM
Let 'em audit. Doesn't bother me at all.

heygrassman
01-18-2002, 10:14 PM
My local paper reported they they will mostly be concentrating on over $100,000 earners.

The article that I read stated the lions share were going to be situations where AGI went from user 100K to over 100K. I also believe that was going to focus on non-schedule c's.

geogunn
01-18-2002, 10:46 PM
Originally posted by Craig Jones
I believe they are just auditing Form 1040s. I do not think they will be going over schedule Cs. I will look for the information and try to post it.

mr. jones--as a veteran of the IRS AUDIT, in my experience, I can assure you that you don't have a clue what you are talking about.

if you have had better audit experiences than me then you are lucky.

the IRS not only audits your 1040 but also any schedule you file as well as your lifestyle.

and by that I mean if you are claiming taxable income and your lifestyle exceeds that income they don't stop till they figure it out.

I live to hear all the breast beating about shoving it up the IRS ass in an audit. yeah right.

GEO

awm
01-18-2002, 10:53 PM
kinda believe that man knows what he is talkin about.

heygrassman
01-18-2002, 11:22 PM
Here is the article for those of us that missed it. It is directly from Reuters, unedited and a link to verify.

jf

WASHINGTON (Reuters) - This fall the U.S. Internal Revenue Service will begin reviewing a "statistically valid" sample of tax returns in an effort to update its information on taxpayer compliance.

The reviews, announced on Wednesday, will include less than 50,000 of the 132 million individual returns filed annually. The new audits, dubbed the National Research Program, will take the place of a previous efforts discontinued in 1988.

"If we can't make sure that everyone pays their fair share, then honest taxpayers get stuck making up the difference. So, tracking taxpayer compliance is a cornerstone of a fair tax system," Treasury Secretary Paul O'Neill said in a statement.

The largest portion of the audits, about 30,000, will deal with only selected portions of returns, not the painstaking "line-by-line" approach used in the past.

Another 9,000 audits will include exchanging correspondence with taxpayers. The IRS said some taxpayers contacted for the audits likely would have heard from the IRS anyway in its routine of matching up information.

"The IRS is working smarter," said IRS Commissioner Charles Rossotti. "We have found new ways to use existing information to measure tax compliance. The process is substantially less intrusive on taxpayers, but will help us catch tax cheating and improve tax administration."

By gathering data on taxpayer compliance, the IRS hopes to shrink the so-called tax gap, the difference between total tax liability and taxes paid voluntarily and on a timely basis. That gap for all taxes, including individual, business, employment and estate levies, was estimated at $278 billion in the 1998 tax year.

In comparison, the budget surplus seen in Fiscal Year 2001 was much smaller, at $127.02 billion.

http://www.reuters.com/news_article.jhtml?type=search&StoryID=523792

MuskTurfKing
01-18-2002, 11:41 PM
One of my parent's friend's son was about 12 at the time and received an audit on his internet business. I found that funny. This was 2-3 years ago.

Hank

Craig Jones
01-18-2002, 11:43 PM
Geo, you are right about the full fledged audit. What I was referring to is what I read about the new initiative IRS is taking. AFter having an audit myself, I do find the new audit initiaitves hard to believe and was referring to an article I read recently. I wish I could find it again and post it to clarify what I said. Of all of life's experiences, an audit is one of my worst.