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Wednesday, January 12, 2011

Tax Audits On The Rise — Be Prepared

The chances are slim of getting a call from the IRS, but best to be prepared

It's no secret that the IRS is ramping up the number of audits in an attempt to close the "tax gap." That's the term the IRS is using to account for the difference between the taxes it believes it should have collected and what it actually managed to collect. For 2001 (the last year for which data is available), the tax gap was $350 billion.

While the chances of being chosen for an audit are still generally low, your chances of being selected are on the rise. Don't get caught by surprise. Here's what you need to know in order to be prepared.

The most basic question is what kind of audit the IRS is seeking. Audits can be divided into two general categories: paper audits and people audits.

GO HERE to read more.

7 comments:

Anonymous said...

I have been audited by the IRS. This was one of the worst experiences of my life. They found our tax preparer had made a mistake on depreciation and we owed $8,000.00. We had to sell our house to pay it. Several months later, the state of MD came in and said "we see you were audited, you owe us more money too". It took a LONG time to get over that hump.
I wish they would go after the big guys who owe them MILLIONS and leave the little guy alone or at least not be so hard on the average working class! It was a MISTAKE, but that didn't stop the penalties and interest from accruing DAILY! The bonus is, once they audit you, you can bet they'll be back. And they were, but we came up clean the next time and they've left us alone. Thank God!

Anonymous said...

To heck with the IRS. Good luck actually finding me.

Anonymous said...

Maybe they will start with the politicians on both sides. I say the first one should be good ole Charlie, huh?

Anonymous said...

I too have been audited and its one of the worst experiences that I have ever had.

Anonymous said...

Did they mentioned that the formation of the IRS is unconstiutional when they read the document in congress.. Me thinks no..The amendment is unratified by the states and not valid until it is..but try get out of paying..the crime continues

Anonymous said...

I wish they would audit people collecting welfare! Leave the working people alone.

lmclain said...

Not too long ago, there was a article on here about the Congressional aides who weren't paying taxes and owed quite a bit of money. But the IRS wasn't bothering them. How many of Bush's and Obama's political appointees and CABINET members (includung the current HEAD OF THE IRS!!) were caught not paying taxes? I'm pretty sure NONE of them had to sell their house....