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Unless you really screw up[1], or are intentionally trying to screw the IRS[2], you don't have to worry about an audit. The IRS's goal isn't to bring down their

Unless you really screw up[1], or are intentionally trying to screw the IRS[2], you don't have to worry about an audit. The IRS's goal isn't to bring down their wrath upon you, their goal is to accurately collect the taxes they are due. If you pay too little, they'll ask you to pay the difference. If you pay too much, they'll refund it. Really: I once used the single-payer tax table instead of the filing-jointly tax table, and they sent me a nice letter explaining my error alongside a big check. [1] http://achewood.com/index.php?date=02102004 http://achewood.com/index.php?date=02102004 [2] http://achewood.com/index.php?date=02272003 http://achewood.com/index.php?date=02272003

numpad0 6y ago
I wonder if someone could FOIA their audit software stack and put that up on GitHub and Docker Hub
- edoceo 6y ago
  Generally no. Data you get from FOIA requests is generally limited with what you can do with it. State specific laws, your use-case not withstanding
  - EvanAnderson 6y ago
    The IRS is a US federal agency, though. They can claim no copyright on the code. It should be be public domain.
    - vharuck 6y ago
      Unless it was written by a contractor who then gave the copyright to the IRS. This is a very common situation. The federal government is not barred from having copyrights.
      - EvanAnderson 6y ago
        That would be a fun legal rabbit hole to descend into.
        ohyeshedid 6y ago
        I don't know about fun, but it would definitely be expensive.
        EvanAnderson 6y ago
        "Fun" from a research perspective. (I've got friends who are IP lawyers and enjoy talking about this stuff.)
  - ed25519FUUU 6y ago
    FOIA results can definitely go into public domain. That's sort of the point.
    - ska 6y ago
      > That's sort of the point. It really isn't - the point is freedom access, not free use. Information acquired this way doesn't magically become public domain, it may (or may not) have other constraints on it. See e.g. https://www.justice.gov/oip/blog/foia-update-oip-guidance-copyrighted-materials-and-foia https://www.justice.gov/oip/blog/foia-update-oip-guidance-co...
- fl0wenol 6y ago
  Any code authored by or for (exclusively) the government is default open. Usually all it takes is a FOIA request; if you're lucky they're publishing it on github already. However there are carve-outs for areas where making the code public could impede the law-enforcement mission of the entity that uses it, that is, FOIA exemption 7E. Since the IRS knows that if you knew how the audit worked*, then you'd do your taxes "just so" to avoid the thresholds by running the logic yourself, which is not something they'd want to encourage. And it would definitely increase their audit casework load. There's also the issue that if the code wasn't bespoke but also sold to non-government entities for similar missions (i.e. government does not hold exclusive rights), then it can be protected as the contractors IP. But for the IRS this would be rare, they are pretty unique and often do things their own way. * You can sort of do this without the code. The IRS is not allowed by legislation to base an audit decision on any information that is not covered by eFile, so contents of forms 1041QFT and 990T, or any attachments to what could have been an electronically submitted form, is out of scope. As long as what you submit in the core set of forms aren't statistical outliers, then you're good.
Uehreka 6y ago
IANAL, or an accountant, etc, but if I’ve learned anything from ravenously consuming Trump family news the past few years, it’s that ignorance of the law actually is a defense in cases around taxes, and the IRS has to satisfy a standard of proving bad intent in order to really screw you. Again, IANAL, do your taxes, please. But it does seem like the system is legitimately designed with an ethos of just making sure taxes get collected and isn’t about being vindictive.
- vidarh 6y ago
  Having dealt with tax authorities in several countries, it's a recurring theme that they have no interest in coming down on you hard if you seem to be trying to do the right thing and make actual efforts at compliance, as they have their hands full putting actual effort into dealing with people actually trying to evade tax. What I always do if in doubt is to attach a letter setting out my assumptions. I've outright had to tell the tax authorities I didn't know the real numbers one year, because I realised shortly before filing that I'd lost documentation in a move, and so a whole bunch of details were estimates. Even that was accepted without additional documentation. Of course I'm sure there are countries that are worse.
  - jjeaff 6y ago
    There is no way that would work with the IRS. Anything you estimated and can't provide documentation for will automatically be considered void and non-existent by the IRS if that thing reduces your tax bill. If you think you have about $5k in valid deductions, but you can't provide any documentation upon an audit, then that $5k will be reduced to exactly $0 and you will owe all additional taxes plus interest and penalties.
    - vidarh 6y ago
      I was estimating income, not deductions.
motbob 6y ago
I agree with the basic premise that the IRS is nothing to be afraid of if you make a simple mistake. Though if you make a $5,000 error (which is getting out of "simple mistake" territory), they'll tack on a 20% penalty. That being said, audits are incredibly annoying if you didn't make a mistake, especially if children are involved. The Examinations department of the IRS is hard-headed, to say the least, and they will often make any excuse to deny you credits that you are actually entitled to. In order to get a fair hearing, you have to appeal the case to court. (The U.S. has made the appeal and court processes pretty doable even for taxpayers without an attorney, though.)
- ed25519FUUU 6y ago
  Even besides the risk of pecuniary damage, the problem with an audit is that it can take a long time. It's a time sink for you where the best outcome is usually nothing different happens.
  - macintux 6y ago
    A long time with a lot of stress, I imagine.
  - CRConrad 6y ago
    Take a long time? Ya got that right! At least half a decade, judging by how some people claimed "ongoing tax audit" as an excuse for not publishing their tax returns for a whole campaign year and Presidency term...
- moduspol 6y ago
  I made an error like that one year. It was as simple as me (personally) not receiving one of the 1099s from a few months of work my wife had done for a non-profit. For those unaware: You get a 1099 when you're paid as a contractor, which means taxes haven't been taken out yet. It's fairly common for temp work and similar oddjobs that don't warrant a dedicated employee. There was no audit in my case. They just sent me a letter that boiled down to that I had missed that 1099, and they were correct. I was just a little miffed that they waited almost a year to send that letter, which by then had higher interest / penalties than if I had been notified sooner. Still way better than an audit would be, though.
astura 6y ago
Which begs the question if they essentially already know how much tax they think you should owe (for most people) why don't they present that number to get first and let you either agree or disagree?
- dllthomas 6y ago
  If we view it as an error checking process, it's better to come up with the two numbers independently. Whether the improvement is worth the costs, I don't know.
- sokoloff 6y ago
  They don’t know until mid to late summer. Your transcript is incomplete (or incompletely processed) prior to that.
  - astrostl 6y ago
    Incompletely processed is more like it. The deadline for receipt of information from employers, etc. is Jan 31 with scaling penalties for tardiness.
Cymen 6y ago
This is my experience too. I was audited and they do send you a "shock" letter or at least they did in my case claiming I owed roughly $15,000 USD. After fixing my mistakes (and submitting an updated filing), they sent me a check for a bit more than $1,500 USD. Plus I learned about my mistakes so it was a win-win (as I learned with just enough time to not repeat the same mistake for the next year's taxes). I had an A+ experience being audited after my initial shock. They even have a secure message system where you can communicate via a website with the IRS including uploading files instead of having to mail letters back and forth. Definitely some clunkiness but overall it was solid and worked. Not sure I'd recommend the experience but I definitely found it nothing to fear. I also found I didn't need professional assistance with being audited (I did seek it out but due to the time of year being so close to the next year's tax due date, I couldn't find someone right then so I decided to try fixing it myself).
- jonas21 6y ago
  It sounds like you got a letter from the IRS's automated underreporter program. I believe these are more common (and less painful) than an actual audit.
samstave 6y ago
>>**the taxes they are due** Please explain to me why they are *DUE* said taxes... What is the gas tax for, what is it intended to perform What is the lottery tax for, what is it intended to perform What is income/state taxes intended to perform Where are the metrics for what tax==intent==outcome results? Please - give me a detailed response.
- coldpie 6y ago
  Paying for stuff like roads, highways, snowplows, schools, government workers, the military, that kind of thing. If you'd like a detailed response, you can look up the federal budget, and the state and city budgets relevant to your area.
  - samstave 6y ago
    Sure buddy. Let me ask you: Why are our roads so fucked up? Why are our teachers so underpaid? (Did you read the entire 1.9 TRILLION stimulus bill from Harris Biden? - I DID. Guess what they only gave $800 million toward edu packages which DID NOT EVEN CALL FOR OR REFERENCE TEACHER PAY INCREASES) Why are government workers not answering phones. Why is the military un-auditable. You are a fucking idiot. Let me tell you something, The gas tax has done nothing for actual roads. The lottery has done nothing for schools The government workers are only in it for their own benefits The military is NOT on your side. Your taxes are used to thwart you - not build you. If you disagree - then, please explain to me. EDUCATE me. on how I am wrong.
    - loopercal 6y ago
      >You are a fucking idiot. >If you disagree - then, please explain to me. EDUCATE me. on how I am wrong. Boy howdy if that's how you go about seeking education I can guess a) what you political opinions are and b) how you arrived at them.
    - CRConrad 6y ago
      > Why are our roads so fucked up? > Why are our teachers so underpaid? Because some assholes -- present company very much not excluded -- don't pay enough taxes?

numpad0 6y ago

I wonder if someone could FOIA their audit software stack and put that up on GitHub and Docker Hub

edoceo 6y ago
Generally no. Data you get from FOIA requests is generally limited with what you can do with it. State specific laws, your use-case not withstanding
- EvanAnderson 6y ago
  The IRS is a US federal agency, though. They can claim no copyright on the code. It should be be public domain.
  - vharuck 6y ago
    Unless it was written by a contractor who then gave the copyright to the IRS. This is a very common situation. The federal government is not barred from having copyrights.
    - EvanAnderson 6y ago
      That would be a fun legal rabbit hole to descend into.
      - ohyeshedid 6y ago
        I don't know about fun, but it would definitely be expensive.
        EvanAnderson 6y ago
        "Fun" from a research perspective. (I've got friends who are IP lawyers and enjoy talking about this stuff.)
- ed25519FUUU 6y ago
  FOIA results can definitely go into public domain. That's sort of the point.
  - ska 6y ago
    > That's sort of the point. It really isn't - the point is freedom access, not free use. Information acquired this way doesn't magically become public domain, it may (or may not) have other constraints on it. See e.g. https://www.justice.gov/oip/blog/foia-update-oip-guidance-copyrighted-materials-and-foia https://www.justice.gov/oip/blog/foia-update-oip-guidance-co...
fl0wenol 6y ago
Any code authored by or for (exclusively) the government is default open. Usually all it takes is a FOIA request; if you're lucky they're publishing it on github already. However there are carve-outs for areas where making the code public could impede the law-enforcement mission of the entity that uses it, that is, FOIA exemption 7E. Since the IRS knows that if you knew how the audit worked*, then you'd do your taxes "just so" to avoid the thresholds by running the logic yourself, which is not something they'd want to encourage. And it would definitely increase their audit casework load. There's also the issue that if the code wasn't bespoke but also sold to non-government entities for similar missions (i.e. government does not hold exclusive rights), then it can be protected as the contractors IP. But for the IRS this would be rare, they are pretty unique and often do things their own way. * You can sort of do this without the code. The IRS is not allowed by legislation to base an audit decision on any information that is not covered by eFile, so contents of forms 1041QFT and 990T, or any attachments to what could have been an electronically submitted form, is out of scope. As long as what you submit in the core set of forms aren't statistical outliers, then you're good.

Uehreka 6y ago

IANAL, or an accountant, etc, but if I’ve learned anything from ravenously consuming Trump family news the past few years, it’s that ignorance of the law actually is a defense in cases around taxes, and the IRS has to satisfy a standard of proving bad intent in order to really screw you. Again, IANAL, do your taxes, please. But it does seem like the system is legitimately designed with an ethos of just making sure taxes get collected and isn’t about being vindictive.

vidarh 6y ago
Having dealt with tax authorities in several countries, it's a recurring theme that they have no interest in coming down on you hard if you seem to be trying to do the right thing and make actual efforts at compliance, as they have their hands full putting actual effort into dealing with people actually trying to evade tax. What I always do if in doubt is to attach a letter setting out my assumptions. I've outright had to tell the tax authorities I didn't know the real numbers one year, because I realised shortly before filing that I'd lost documentation in a move, and so a whole bunch of details were estimates. Even that was accepted without additional documentation. Of course I'm sure there are countries that are worse.
- jjeaff 6y ago
  There is no way that would work with the IRS. Anything you estimated and can't provide documentation for will automatically be considered void and non-existent by the IRS if that thing reduces your tax bill. If you think you have about $5k in valid deductions, but you can't provide any documentation upon an audit, then that $5k will be reduced to exactly $0 and you will owe all additional taxes plus interest and penalties.
  - vidarh 6y ago
    I was estimating income, not deductions.

motbob 6y ago

I agree with the basic premise that the IRS is nothing to be afraid of if you make a simple mistake. Though if you make a $5,000 error (which is getting out of "simple mistake" territory), they'll tack on a 20% penalty. That being said, audits are incredibly annoying if you didn't make a mistake, especially if children are involved. The Examinations department of the IRS is hard-headed, to say the least, and they will often make any excuse to deny you credits that you are actually entitled to. In order to get a fair hearing, you have to appeal the case to court. (The U.S. has made the appeal and court processes pretty doable even for taxpayers without an attorney, though.)

ed25519FUUU 6y ago
Even besides the risk of pecuniary damage, the problem with an audit is that it can take a long time. It's a time sink for you where the best outcome is usually nothing different happens.
- macintux 6y ago
  A long time with a lot of stress, I imagine.
- CRConrad 6y ago
  Take a long time? Ya got that right! At least half a decade, judging by how some people claimed "ongoing tax audit" as an excuse for not publishing their tax returns for a whole campaign year and Presidency term...
moduspol 6y ago
I made an error like that one year. It was as simple as me (personally) not receiving one of the 1099s from a few months of work my wife had done for a non-profit. For those unaware: You get a 1099 when you're paid as a contractor, which means taxes haven't been taken out yet. It's fairly common for temp work and similar oddjobs that don't warrant a dedicated employee. There was no audit in my case. They just sent me a letter that boiled down to that I had missed that 1099, and they were correct. I was just a little miffed that they waited almost a year to send that letter, which by then had higher interest / penalties than if I had been notified sooner. Still way better than an audit would be, though.

astura 6y ago

Which begs the question if they essentially already know how much tax they think you should owe (for most people) why don't they present that number to get first and let you either agree or disagree?

dllthomas 6y ago
If we view it as an error checking process, it's better to come up with the two numbers independently. Whether the improvement is worth the costs, I don't know.
sokoloff 6y ago
They don’t know until mid to late summer. Your transcript is incomplete (or incompletely processed) prior to that.
- astrostl 6y ago
  Incompletely processed is more like it. The deadline for receipt of information from employers, etc. is Jan 31 with scaling penalties for tardiness.

Cymen 6y ago

This is my experience too. I was audited and they do send you a "shock" letter or at least they did in my case claiming I owed roughly $15,000 USD. After fixing my mistakes (and submitting an updated filing), they sent me a check for a bit more than $1,500 USD. Plus I learned about my mistakes so it was a win-win (as I learned with just enough time to not repeat the same mistake for the next year's taxes). I had an A+ experience being audited after my initial shock. They even have a secure message system where you can communicate via a website with the IRS including uploading files instead of having to mail letters back and forth. Definitely some clunkiness but overall it was solid and worked. Not sure I'd recommend the experience but I definitely found it nothing to fear. I also found I didn't need professional assistance with being audited (I did seek it out but due to the time of year being so close to the next year's tax due date, I couldn't find someone right then so I decided to try fixing it myself).

jonas21 6y ago
It sounds like you got a letter from the IRS's automated underreporter program. I believe these are more common (and less painful) than an actual audit.

samstave 6y ago

>>**the taxes they are due** Please explain to me why they are *DUE* said taxes... What is the gas tax for, what is it intended to perform What is the lottery tax for, what is it intended to perform What is income/state taxes intended to perform Where are the metrics for what tax==intent==outcome results? Please - give me a detailed response.

coldpie 6y ago
Paying for stuff like roads, highways, snowplows, schools, government workers, the military, that kind of thing. If you'd like a detailed response, you can look up the federal budget, and the state and city budgets relevant to your area.
- samstave 6y ago
  Sure buddy. Let me ask you: Why are our roads so fucked up? Why are our teachers so underpaid? (Did you read the entire 1.9 TRILLION stimulus bill from Harris Biden? - I DID. Guess what they only gave $800 million toward edu packages which DID NOT EVEN CALL FOR OR REFERENCE TEACHER PAY INCREASES) Why are government workers not answering phones. Why is the military un-auditable. You are a fucking idiot. Let me tell you something, The gas tax has done nothing for actual roads. The lottery has done nothing for schools The government workers are only in it for their own benefits The military is NOT on your side. Your taxes are used to thwart you - not build you. If you disagree - then, please explain to me. EDUCATE me. on how I am wrong.
  - loopercal 6y ago
    >You are a fucking idiot. >If you disagree - then, please explain to me. EDUCATE me. on how I am wrong. Boy howdy if that's how you go about seeking education I can guess a) what you political opinions are and b) how you arrived at them.
  - CRConrad 6y ago
    > Why are our roads so fucked up? > Why are our teachers so underpaid? Because some assholes -- present company very much not excluded -- don't pay enough taxes?