The IRS Audit Blog

Posts Tagged ‘irs audits’

Question: The IRS discontinued random audits in 1988.?

The IRS discontinued random audits in 1988. Instead the IRS conducts audits on returns deemed questionable by its Discriminate Function System (DFS) a complicated and highly secretive computerized analysis system. In an attempt to reduce the proportion of “no-change” audits (that is m audits that uncover that no additional taxes are due), The irs only audits returns the DFS scores as highly questionable. The proportional of no change audits has risen over the years and is currently 0.25 .Suppose that you select a random sample of 100 audits. What is the probability that the sample has

A – Between 24% and 26 % no change audits

b- between 20% and 30% no change audits

c- more that 95% no change audits

Answer: You are not serious right? Whatever you are studying, obviously you are not good at it. This question can’t get any easier. I’ll tell you it’s not c.

La Crescenta Federal Tax Return Help Requests On The Rise Reports 2020 Financial

La Crescenta, CA – La Crescenta federal tax return help ( http://www.2020taxhelp.com ) requests have taken a sharp spike this year as business clients and individuals worry over the multiple tax law changes reports 2020 Financials Services’ Enrolled Agent (EA) Greg Fey.

Question: What happens if you have to go through an IRS Audit? PLEASE ONLY ANSWER IF YOU KNOW WHAT YOU ARE TALKING ABOUT?

This is kind of a multiple- part question. To begin with, I’m starting my own business soon, and prior to the opening of this business, I lived at home working part time for a few years, and then more recently moved out to go to college and began working full time. During the past few years, as I described, I never claimed more than $20,000 on my tax returns. With the opening of this business, however, the numbers that I ran with my current client base and projected employee payouts, after I pay all my bills and pay my employees, I’ll be able to claim around $550,000 for my salary in 2009. This brings me to my first question. How at risk does this put me at for a tax audit?
Also, the next part of this question, if I am at risk for an IRS audit, which I am sure I will be, what happens during an audit? It’s not like I’ve been lying to the IRS, it’s just that my income went way up way fast. Will I get in trouble?
Please help me if you can.
Thanks

Answer: You would be at a bigger risk for audit if you suddenly stop reporting a half million dollars in income.

Its important to know there are 2 types of audits. The more common type is usually fairly painless. This happened to my parents a few years ago. They got confused on the legal wording of a particular tax credit and thought they could claim it. They weren’t trying to cheat, they just misinterpreted the IRS instructions. I think it was related to the fact that they were still paying money toward my tuition although I had gotten married and started claiming myself. The IRS just sent them a letter saying basically, “you tried to claim such and such credit but didn’t submit the proper form. Either send in form X to verify your claim, or we will adjust your return accordingly.” That was it, that was an audit, but the only pain was the fact that their refund ended up being a little smaller than they first though.

The second type of audit is much more in depth. This is where an IRS representative would actually come out, look over all your paperwork for the business, verify every deduction and expense, and verify that you reported all your income. This is where you can get in big trouble if you are hiding something. Chances are that if you are trying to be honest but you just make a mistake, the worst thing that will occur is that they will adjust your return to make it correct, and add a nominal fine.

If you had a half million dollar income from a business, it would probably be worth the investment to hire a CPA to handle the books for the business. Then you can hire the same CPA or a qualified tax pro to look over your personal returns.

IRS to Audit Some BABs Over Issue-Price Tax Rule

INDIAN WELLS, Calif. — The Internal Revenue Service plans to audit some Build America Bond issues to determine if they meet the tax requirement on issue price, an agency official said here last week.

IRS Collection Appeals – IRS Appeals

Question: depositing more than 10K in a bank at once…..?

I know that if you deposit more than 10K at a bank at once, they will fill out some sort of form and report it to the IRS (or at least I’m told). My question is, what if I deposited $9300 on Wednesday, and I deposit $7K today (two days later) It is over 10K, but it is not at once. Will my bank notice this on some sort of audit and report it to the IRS anyway? I have about another 18K that I need to funnel in before July. I want to take it out of my safety deposit box and into an account that earns interest. The bottom line is that I used to have a side business that sold mattresses wholesale and it was all cash. I never filled out a business licnese, and therefore never reported any of it to Uncle Sam. I don’t want the IRS auditing me to find out where this influx of cash came from and have to pay penalties and back taxes. So is it strictly 10K a day, or do they take a look at all of your deposits if they become abnormally high all fo a sudden? Thank you everyone.

Answer: If you deposit $9,300.00 today and then $7,000.00 two days later you will be fine.

The rule is for $10,000.00 in the same 24 hours.

By the way, the IRS does not have the right to audit any bank accounts.

To do that they need to get a Court Order and to do that they to give the Judge at least a reason.

The IRS audits only your taxes and not your bank accounts.

Only if they find something wrong with your taxes they will start an investigation.

The $10,000.00 is not a IRS thing. It’s a NSA thing. (National Security Agency) and a FBI thing and a CIA thing (Outside the United States of America)

They are trying to locate all the drug dealers, terrorists, kidnappers, hitmen and other dangerous criminals.

It’s not wise to place your name on that black list.

Health bills could expand IRS role

Under the proposed health care legislation, Internal Revenue Service agents would be checking to see whether Americans have health insurance.

Income Tax Filing: Tips To File Income Tax On Time

Question: irs is auditing me, how i can estimate penalties and interest?

i want to know if there is a table where i can see the percentage of interest and penalties that they will charge me, is a fix amount or what?
vp and other guys thanks for u answers, but still isn very clare, u said 20 of penalty plus interes of 6 plus aditional penalty of 6 percent annually? would ya explain a little bit more? thanks
i do appreciate your answers my friend i get an idea, somebody told me worst things like that have a nice day

Answer: Failure to file penalty: 4.5% per month or fraction, up to a total to 22.5%

Failure to pay penalty: 0.5% per month or fraction, up to a total of 25%

Interest: currently at 4% per year, no limit.

If you are a business, you could also get a failure to deposit penalty, which is 2%, 5%, 10% or 15%, depending on how late your deposit is.

Don’t Get Scammed on Your Tax Refund

Itching to get your due from Uncle Sam? There are plenty of folks — legit and otherwise — who will happily promise to help you get a faster or bigger refund.

IRS Penalties, Audits, Benefit Plans 419e 412i

Question: How to file taxes if only cash was earned and employer will not provide proof of employment?

My husband worked last year for cash. We did not keep records of how much he earned, but estimate it at under
$18, 000. His employer says he has no record of him working there and will not provide anything. We are not looking for a tax refund, we just want to file to avoid an audit or any trouble with the IRS. We are not sure if we need to file, and if we need to file, how do we do it? There is no W-2 or 1099 and I know those things are needed to file.

Other things to take into consideration. We have one son (age 4). My husband also became a permanent legal resident in the United States in 2007. I have called the IRS to ask, but get different answers every time. Any clear advice/tax rules are much appreciated.

Answer: just file a 1040 with the irs…put the whole thing in as wages without a 1099-misc. (thats what it is, right?).

did you know that even if you earned it from stealing, bribes, drugs, or prostitution the irs wants it cut! Its in the books.

if you had no taxes withheld, then you will have to pay all of it now (as opposed to a little every week).

make sure you put the whole family to reduce the tax you will owe. also get the better of the standard or itemized deduction.

if you buy turbo tax it will guide you.

and yes, the irs may interview you to get info about your employer to verify where you got your money.
this is not guaranteed though.

IRS peers into executive compensation

As the Obama Administration seeks backing for a tax on banks’ lucrative pay packages, the Internal Revenue Service has been stepping up its oversight of executive pay through its auditing and other powers.

Represent Taxpeyers before the IRS