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Comment on How Tax Collectors Like The IRS Cleverly Rob You Of Your Money by How To Avoid An Audit Based On Discrimination By The IRS | Financial Samurai

Sat, 18 May 2013 16:00:04 +0000

[...] the cost basis for my stock sales, double counting a mortgage interest deduction by mistake, and NY State fishing for more money even though I didn’t even work there. Mistakes are definitely one reason not to do your own [...]

Comment on How To Avoid An Audit Based On Discrimination By The IRS by Untemplater

Untemplater — Sat, 18 May 2013 15:58:44 +0000

The audit stats by income level surprised me. I think the chance of getting audited is going to rise for everyone over time as the IRS gets it hands on more and more information. I keep seeing articles about the IRS legally being able to data mine from all reaches of the web and various digital records so who knows how much things could change in 10 years. Intriguing advice on political affiliations and audit risk. The higher ups at the IRS must have so many ways to control what they define as red flags for their automatic audits and all of the staff to act upon. I don’t donate to any political parties and currently have no plans to though. I hear ya on getting chased for more money and being put on call lists after donating even just a little. When I switched phone numbers a few years back I knew the guy who previously had my number was a democrat because every day for about two months all I got was solicitation calls for money and campaign announcements for the democratic party.

Comment on How To Avoid An Audit Based On Discrimination By The IRS by Pauline

Pauline — Sat, 18 May 2013 14:46:03 +0000

I find the audit rates very low for the no income and under $25K. Those are the incomes that give you access to a lot of state benefits like food stamps or medicaid, they should be audited more often to prevent abuse.

Comment on How To Avoid An Audit Based On Discrimination By The IRS by writing2reality

writing2reality — Sat, 18 May 2013 14:01:27 +0000

If you are a higher income earner (500k+) your best bet for avoiding an audit is to simply stay out of grey investments (tax-shelters, etc) and eliminate your filing mistakes. Those two things invite more audits than anything else for those with higher incomes. As you have seen for yourself Sam, two of your three audit letters were a result of your own errors.

As for anyone being shocked at the audit percentage for high income earners, the reason is simple; there are much bigger dollars at stake for the IRS with a lower cost of effort per dollar “found” by going after these bigger fish. No sense spending $10,000 chasing a $5,000 of extra tax when they can spend the same $10,000 getting $50,000 or more.

As for donating to politicians… not interested. I would rather keep immaculate financial records and deal with the IRS than step into an arena which is all smoke and mirrors. Of course, having been in public accounting for several years early in my career, I don’t share the same fear of the IRS as most. That being said, targeted audits are simply another step in the degradation of values in this country, but to be expected at this point. I don’t view either side as particularly innocent.