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More IRS Tax Audits

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October 3  |  Audit Proofing, IRS News  |   admin

Taxpayers, you have been warned.

The IRS requested a 5.33% increase in enforcement activities (examinations, collections, and investigations) for the government’s fiscal year 2011. Increases in the federal government’s budget have allowed the IRS to hire new revenue agents, revenue officers, and special agents.

For FY 2010, the House approved a $5.504 billion increase in the IRS’s budget in order to focus on enforcement activities. In an effort to reduce the “tax gap,” the difference between what the government thinks it should collect and what it actually does, the IRS has been conducting more and more audits of employment tax, income tax, and Schedule C filers especially.

Ensure proper tax preparation with a local qualified CPA. Call our office at 619-497-1040 today.

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Understanding the IRS

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October 3  |  IRS News  |   admin

What words come to your mind when you think of the IRS? Perhaps strict, unsympathetic, uncompromising, or merciless? That is actually just fine with them.

The IRS prides themselves on such a self-image, because somehow it gets them what they want. The combination of fear and respect fuels the voluntary compliance with tax laws that they demand.

Seven regions and 63 districts, consisting of over 102,000 employees, make up the IRS’s organizational structure. The following are common titles of the enforcement people of whom you may want to be aware.

Tax Auditors: typically conduct audits of 1040 tax returns and related schedules in the local IRS office, but may occasionally audit 1040s with uncomplicated Schedule C’s.

Revenue Agents: conduct audits of more complex 1040s and business returns, such as the U.S. Return of Partnership Income (Form 1065) and the U.S. Corporation Income Tax Return (Form 1120). These audits are usually conducted on site at the taxpayer’s business.

Revenue Officers: collect delinquent taxes.

Special Agents: handle serious cases through criminal investigations and can make arrests.

Tax examiners: an alternate term used to describe both tax auditors and revenue agents, who belong to IRS’s Examination Division.

With the IRS, rather than giving you the benefit of the doubt, they automatically doubt any and all of your benefits. Do not expect to change their minds when going into an audit armed with only courteous, law-abiding behavior.

If you fall into the situation in which you receive an invitation to an audit, we can help you plan your strategy. Give us a call at 619-497-1040.

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