Discussion:The Top 5 of the Dirty Dozen List of Mistakes

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Discussion Forum Index --> Tax Tips --> The Top 5 of the Dirty Dozen List of Mistakes

SoDreamer (talk|edits) said:

2007 November 15
After receiving the November, 2007 issue of the FEDERAL TAX ALERT from the National Society of Tax Professionals and reading this article, I felt that I really needed to pass this information along. And trust me, it is the most valuable information that you can receive for the 2008 tax season or for any tax year.

Checkout ”Ten Ways To Annoy An IRS Agent” first.


Edited to remove what appears to be an article that's likely under copyright and therefore should not be posted here, under TaxAlmanac's copyright policies/guidelines.

“What is the difference between a taxidermist and a tax auditor?” The taxidermist takes only your skin!”…………

S. Raines, Sr. Financial Advisor/Tax Preparer

Wkstaxprep (talk|edits) said:

15 November 2007
As far as i understand, the rational behind auditing low to middle income earners is because they are the majority of returns and the IRS can target similar items on many returns(such as eic). even a small assessment of 2K for a million returns is more revenue for IRS than an assessment of 10K on 1,000 returns for high earners.

That's what a former state auditor told me once but who knows....???

BethAZ (talk|edits) said:

15 November 2007
Another more dastardly reason might be that low to middle income earners are less likely to have their returns professionally prepared, less willing to pay for representation, and less able to defend themselves.

Dplemmo (talk|edits) said:

15 November 2007
I hope Effectur is more reliable than JK Harris

DZCPA (talk|edits) said:

15 November 2007
The numbers are heavy for low income taxpayers due to the fact many audits are for non filers. There income is zero before the audit starts.

Trixied1 (talk|edits) said:

18 November 2007
Ironically, from what I hear, some of the low to middle income earners DO have their returns prepared (maybe not professionally)and DO telephone the preparer or tax service for representation only to hear either the person who prepared their return is no longer with the company, followed by a price quoted so high they know the person couldn't afford to have representation, or, the tax service has closed up and moved to another unknown location. As far as not being able to defend themselves, their is no defense for bogus returns which show for example a Sch C when there is no Sch C business or for a Contribution deduction when there was no such Contributions made thus, no substantiation to defend themselves even if they wanted to.

If auditing these kinds of returns not only leads to finding the unscrupulous preparers who love to prepare returns of low income people, especially ,people who have no knowledge of taxes, don't ask questions regarding business expenses or deductions, because they just look at the refund and sign on the dotted line. Unfortunately, they are responsible for the contents. Had the people paid to have their return prepared by a knowledgeable accountant or other tax professional, they would see it was well worth it considering the additional taxes, interest and/or penalties the IRS may be assessing. Also it leads to people who have received refunds they weren't entitle to at all I don't have a problem with that

Macbeth870 (talk|edits) said:

5 April 2009
The reason the IRS audits people who make less money are obvious:

1. These indivduals are less likely to use a tax professional to prepare their returns, therefore, their returns are more likely to contain errors;

2. The fact that someone reports that he earned only 25k doesn't mean that's what he actually earned. The IRS is looking for income omission cases in addition to excessive deduction cases.

3. The IRS assigns a DIF score to each tax return. The score is computer generated and based on relationships such as that between, say, a taxpayer's mortgage interest deduction and his Adjusted Gross Income. If the score exceeds a certain number, the return gets flagged and is sent to an IRS official to review for potential audit selection.

Finally, the statement that “once you have been audited, then you cannot go back and amend a return for changes” is very misleading.

The truth is, you don't NEED to amend your tax return once it is in the hands of an audit because the audit itself becomes the amendment process. If you have additional deductions that you missed or if you over stated your income, you CAN and SHOULD make it known to the IRS auditor and he or she is required to change your return to your benefit.

DZCPA (talk|edits) said:

27 June 2009
You can also amend a return after it was changed with an audit.

Pent-Up (talk|edits) said:

24 July 2009
The Service does not have to accept an amended return.

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