With 87,000 new agents, here’s who the IRS may target for audits

[BirdinHand]

Again, spoken like someone who has no idea what they are talking about…at lot of that going on in this thread.

In 25 years of practice, I’ve had one business owner audited. After the IRS spent 8 months of back and forth, requesting supporting documentation and other information (which we happily provided), they came away with a tax bill for $430 for a few non-deductible meals that accidentally got charged to miscellaneous expense. (Mind you, their gross revenue is approximately $14 million annually, and they net several hundred thousand dollars annually).

No…the only business owners who sweat an IRS audit are those that know they are hiding something.

and a GOOD tax accountant wouldn't advise any business to lie/hide anything because their reputation is on the line also.

 

[Geoist]

From the article: "New auditors may have a six-month training program and receive cases worth few hundred thousand dollars rather than tens of millions, Levy said."

A few hundred thousand dollars? That seems to run afoul of the White House's claim today that people making less than $400,000 would not be more likely to be targeted for audits.

You think they're going to throw new recruits at the big fish?

 

[Geoist]

IRS audits disproportionately target poor people

So are you willing to put in the taxpayer dollars and resources/manpower it takes to go after the rich and powerful?

 

[fmw]

Don’t lie on your tax forms?

The new hires are over a decade. Did you think that they would all be magically hired the next day after Biden signs the bill?

I've been through two audits. The first one took nine months and cost time and money. It resulted in no tax due. Oddly, the IRS brought the same kind of audit the following year. Same process. Same result. It is not about lying on tax forms. It is about being targeted for no reason and being dragged through an ugly and expensive process. Been there done that.

The people with the most to fear in this IRS expansion are those in the lower income brackets. It is difficult and time consuming to audit rich people. They can defend themselves. The easier route is to go after those whithout the means to defend themselves. Normally they can send a letter and get a check in return. Quick, easy, cheap and there are millions of targets. This may help government but it won't help the economy.

 

[mrjurrs]

With the IRS hiring more employees, here's who agents may target for audits

The Senate approved nearly $80 billion in IRS funding with $45.6 billion for "enforcement." Here's who may be affected by more audits.

www.cnbc.com

87,000 NEW agents as part of "The Inflation Reduction Act"?

But... I'm sure this is all justified and my concerns are only the long term effects paranoia brought on by watching too much Fox News.

You mean people that are 'fudging' their taxes are worried? Good.

 

[Juggernaut74]

The people with the most to fear in this IRS expansion are those in the lower income brackets. It is difficult and time consuming to audit rich people. They can defend themselves. The easier route is to go after those whithout the means to defend themselves.

Those with no means to defend themselves do not have income they are hiding or extraordinary expenses - so there’s nothing to audit, save for maybe verifying they’ve not over-claimed any earned income tax or similar credits.

Normally they can send a letter and get a check in return. Quick, easy, cheap and there are millions of targets. This may help government but it won't help the economy.

Getting a letter/notice from the IRS isn’t an audit (another quick and easy way to identify people who don’t know what they’re talking about). It just means their computers have different information (via W-2s and 1099s etc) than what you reported on your return. If your W-2 says you made $32,000 and you report (whether intentionally or accidentally) it as $23,000, their computer is going to automatically send you a letter pointing out the discrepancy and tell you you owe the tax on the difference.

 

[bave]

I've been through two audits. The first one took nine months and cost time and money. It resulted in no tax due. Oddly, the IRS brought the same kind of audit the following year. Same process. Same result. It is not about lying on tax forms. It is about being targeted for no reason and being dragged through an ugly and expensive process. Been there done that.

The people with the most to fear in this IRS expansion are those in the lower income brackets. It is difficult and time consuming to audit rich people. They can defend themselves. The easier route is to go after those whithout the means to defend themselves. Normally they can send a letter and get a check in return. Quick, easy, cheap and there are millions of targets. This may help government but it won't help the economy.

This.

The only thing I disagree with is that they won't audit people in the bottom 70%, they use standardized deductions and have simple returns. The folks running schedule C's and making $200M+? That's the target.

 

[Juggernaut74]

they won't audit people in the bottom 70%, they use standardized deductions and have simple returns. The folks running schedule C's and making $200M+? That's the target.

This much I agree with.

 

[Juggernaut74]

I've been through two audits. The first one took nine months and cost time and money.

To be fair, you are correct here. The biggest hassle is the time and monetary cost of complying with the audit (the company I referred to above received a bill from our firm for around $6,000 for our time spent defending them, not to mention any internal time spent by their own internal employees).

Right now, the overall chances of being randomly audited lie around 0.5% (so you can expect to be audited about once every 200 years solely by chance). There are certain items or red flags that can raise that probability. Obviously I don’t know your specific circumstances, but if you were audited two years in a row, it is most likely that your return contained one or more of these red flags. The chances of that happening simply by being unlucky are astronomical.

 

[fmw]

To be fair, you are correct here. The biggest hassle is the time and monetary cost of complying with the audit (the company I referred to above received a bill from our firm for around $6,000 for our time spent defending them, not to mention any internal time spent by their own internal employees).

Right now, the overall chances of being randomly audited lie around 0.5% (so you can expect to be audited about once every 200 years solely by chance). There are certain items or red flags that can raise that probability. Obviously I don’t know your specific circumstances, but if you were audited two years in a row, it is most likely that your return contained one or more of these red flags. The chances of that happening simply by being unlucky are astronomical.

Astronomical indeed but true. It was an audit of my business. Fortunately I have a good CPA to do the tax work. I didn't even mention that the year prior to these two I had a state audit of my business over payroll taxes. That one ended in no taxes due as well. I can't guess what red flags they encountered. Perhaps they shared that with my accountant. My accountant took it as personally as I did. He submits the tax returns and viewed the audits as questioning of his competence. I don't have to tell you where I question competence.

 

[Lloyd Christmas]

They republicsn will lie and sell to their moronic base that it will target middle and low income, but it will target the people who have been cheating on thier taxes for decades.

The IRS has admitted that they dont' audit big corporations or individuals as they dont' have the man power, so audit regular people.

Republicans whining about riches paying their fair share of Taxes is the epitome of republican's sole policy, make the wealthy and themselves even more money at all costs.

 

[fmw]

They republicsn will lie and sell to their moronic base that it will target middle and low income, but it will target the people who have been cheating on thier taxes for decades.

The IRS has admitted that they dont' audit big corporations or individuals as they dont' have the man power, so audit regular people.

Republicans whining about riches paying their fair share of Taxes is the epitome of republican's sole policy, make the wealthy and themselves even more money at all costs.

Big public corporations have full time on site IRS auditors working in their accounting department. Been there done that. I don't think there are nearly enough very rich people to keep 87000 new agents busy. If they know people who cheating on taxes for decades they would have audited them by now. I think the whining is at your end.

 

[Juggernaut74]

Big public corporations have full time on site IRS auditors working in their accounting department. Been there done that. I don't think there are nearly enough very rich people to keep 87000 new agents busy.

Luckily - as has been pointed out multiple times in this thread already, the funding doesn’t call for 87,000 new agents.

 

[SuperDS77]

Luckily - as has been pointed out multiple times in this thread already, the funding doesn’t call for 87,000 new agents.

Whether all are "agents" or not, the idea is to increase their capacity for doing what they do, right?

 

[Plasmaball]

I'll light a candle for you and your butthurt

 

[Juggernaut74]

Whether all are "agents" or not, the idea is to increase their capacity for doing what they do, right?

Correct - very little of which involves auditing (which is the realm of the IRS agents). As pointed out in this thread, they are currently anywhere from 12-24 months behind just on processing basic tax filings and correspondence, partially due to COVID and partially due to constantly being subject to budget cuts over the last several years.

 

[fmw]

Luckily - as has been pointed out multiple times in this thread already, the funding doesn’t call for 87,000 new agents.

So they are spending billions for no increase in revenue. I suppose that is something government would do

 

[Simon W. Moon]

So they are spending billions for no increase in revenue. I suppose that is something government would do

ftsoa, let's say you're right.

could it be worth spending money to prevent a revenue decrease?

 

[Gatsby]

87,000 NEW agents as part of "The Inflation Reduction Act"?

More IRS agents = More tax money collected = Less money sloshing around the economy = Reduced inflation.

But... I'm sure this is all justified

What exactly is your objection to funding the police?

and my concerns are only the long term effects paranoia brought on by watching too much Fox News.

Sounds about right.

 

[KingLeo]

AP FACT CHECK: GOP skews budget bill’s impact on IRS, taxes​

HOUSE MINORITY LEADER KEVIN MCCARTHY, R-CALIF.: “Do you make $75,000 or less? Democrats’ new army of 87,000 IRS agents will be coming for you -- with 710,000 new audits for Americans who earn less than $75k.” – tweet Tuesday.

SEN. TED CRUZ, R-TEXAS: “The Manchin-Schumer bill will create 87,000 new IRS agents to target regular, everyday Americans.” — Friday tweet.

THE FACTS: That’s misleading. Last year, before the bill emerged, the Treasury Department had proposed a plan to hire roughly that many IRS employees over the next decade if it got the money. The IRS will be releasing final numbers for its hiring plans in the coming months, according to a Treasury official. But those employees will not all be hired at the same time, they will not all be auditors and many will be replacing employees who are expected to quit or retire, experts and officials say.

AP FACT CHECK: GOP skews budget bill’s impact on IRS, taxes

Republican politicians and candidates are distorting how a major economic bill working its way through Congress would overhaul the IRS and affect taxes for the middle class.

apnews.com

 

[highroller]

So are you willing to put in the taxpayer dollars and resources/manpower it takes to go after the rich and powerful?

They’re also easier to audit because they go after easy to disprove credits.

 

[Nickyjo]

So, here's from in the article:



It seems the article is validating what has often been claimed: Enforcement provides taxpayers the highest ROI of any Treasury funding.

Here, it looks like a return of around 500%.

Why would the citizens and taxpayers not be happy about this?

Double standards. Prosecute poor people; they can handle it. Always have.

 

[Jack Fabulous]

The mantra "Defund the Police" is purposeful because the the police are largely viewed as a force which negatively and disproportionately effects people of lower economic status.

On the other hand, the IRS is viewed, largely, as a force which negatively and disproportionately effects people of higher economic status.

Hmm...

 

[reflechissez]

Do you know what if any net revenue benefit this investment will derive? Usually a good idea to test the assumptions built into the model that shows this gain.

I don't think you have a good handle on the analysis.

 

[OpportunityCost]

I guess everyone forgot what the IRS admitted but didn't admit to doing a few years ago. Doesn't anyone think that a portion of those agents are going to investigate supposed apolitical organizations applying for tax free status?

Sure some of it will be for tax recuperation, but I really do think some of it will be used for this purpose. Controlling political groups and subjecting them to audits, seems right up the bureaucratic alley/shitpile that is Washington DC these days.