6 ms·

They audit people who are eligible for EITC because they trivially know what most of them make / how much credit they qualify for and can have an algorithm tell

They audit people who are eligible for EITC because they trivially know what most of them make / how much credit they qualify for and can have an algorithm tell them fraud is present with almost 100% accuracy. If you want more handouts for the poor then vote for it. Don’t blame the IRS for enforcing the tax code. They should audit anyone and everyone fraudulently filing.

peter422 3y ago
So you are saying that in the majority of these cases the fraud is intentional and not accidental? The point being the IRS can completely solve accidental mistakes but just telling everybody what they owe instead of forcing them to calculate it themselves.
- Gigachad 3y ago
  I assume a fair bit would be people claiming deductions they aren’t actually entitled to like expenses for driving to work.
- Arborealist 3y ago
  [flagged]
  - Johnny555 3y ago
    If the poor are paying fines because they are making accidental mistakes on their tax returns when the IRS already has the numbers that they expect them to fill in on their forms, then how is that not the IRS unfairly targeting the poor? What is fair about fining people for inadvertently writing down the wrong number or doing arithmetic incorrectly?
    - notch898a 3y ago
      People eligible for EITC rarely are handling stacks of 1099 and business transactions. We're talking about single mom with a couple part time jobs with a W-2 territory. The idea their taxes should have mistakes more than average seems a bit far-fetched to me. That said maybe it is cheaper and easier just to eliminate the EITC/taxes/filing for people earning under X. It seems like a waste to even bother with people making under 20 or 30 grand.
      - Johnny555 3y ago
        The idea their taxes should have mistakes more than average seems a bit far-fetched to me. I used to file my return electronically, a lot of my forms were downloaded electronically so I didn't even have to type in most data. Now I use an accountant (who I assume uses even better software than I do). What part of "single mom with a couple part time jobs" makes you think that she's perfect at transcribing data and calculating values?
        notch898a 3y ago
        Your thesis is the taxes aren't worse, it's that you think the poors are too dumb to go to freetaxusa or something where basically all they have to do is copy and paste the data from their W2?
        prepend 3y ago
        What makes you think she’s any worse at cutting and pasting than a non single mom? Standard deduction EITC does not involve many calculations even if someone uses the paper form and does it all manually. But most people are using the free tax services made for low income filers.
        kelnos 3y ago
        The mere fact that there are any calculations to be made, simple or complicated, means that some people will make mistakes. That's a fact of life.
        prepend 3y ago
        Of course, but I don’t think single moms are more likely to make mistakes than others.
        Johnny555 3y ago
        Compared to married moms? Maybe not. Compared to accountants, paid tax preparers, or e-filing software that imports the tax forms? Then most likely yes.
  - djbusby 3y ago
    Is a "redditism" a criticism from Reddit? Or maybe a common belief from Reddit? What it means?
    - ronsor 3y ago
      It's supposed to mean reddit-tier jokes, but it seems its meaning has been twisted a bit.
      - deleted 3y ago
        [deleted]
  - kelnos 3y ago
    > the redditism Please don't do this here. It's an unnecessary ad-hominem attack. If you want to refute what you believe to be inaccurate information, then do so, with references. If you don't have references, then ask the person you're responding to if they have references to back up what they're saying. Otherwise, leave well enough alone.
    - Arborealist 3y ago
      [flagged]
    - deleted 3y ago
      [deleted]
emrah 3y ago
Instead of fining mistakes/omissions which may be deliberste or unintentional, they should calculate, send out a bill and fine those who don't pay up.
- hedora 3y ago
  They should also send refunds to people that overpay. Also, people should be able to count their own time when calculating tax preparation costs.
  - prepend 3y ago
    > They should also send refunds to people that overpay. They do. I’ve gotten checks from the IRS before, sometimes years later. > counting their own time This is not a good idea as my time is $1jillion/hour so the government owes me. Seriously though, our time is factored into the standard deduction.
    - wahern 3y ago
      I've also received checks several times. I've never cashed them, though; I have no idea what the correction was for, and the little paranoid, anti-authoritarian, legally illiterate conspiracy theorist sitting on my shoulder tells me a few bucks isn't worth the risk of falling for the IRS's clever entrapment scheme--because cashing a check can in theory constitute affirmation of the correction, which could have been erroneous for all know, and thus with some handwaving constitute fraudulent affirmation. In reality the Federal IRS is a paper tiger compared to the California Franchise Tax Board. The FTB will shoot and ask questions later, and that's more than figurative if not quite literal. The FTB once garnished a paycheck while I was in the middle of correspondence with them. From first person anecdotes I've heard, some other state tax authorities are similarly ruthless. My father got screwed out of a significant sum (in working-class terms) when Alabama came after him on the basis of some fraudulent 1099s (inflated payment amounts) from when he was a construction contractor. He had already moved to another state and it had been many years since the fraudulently reported income, making it infeasible to fight as it would cost too much to collect enough evidence to rebut Alabama's claim. While the Cal FTB has made national headlines a few times, most state services never make national headlines, so everybody just assumes the IRS are the bad guys, when in reality I think the IRS are relative softies.
poink 3y ago
I don't want "handouts for the poor" (well, I do, but I'm perfectly happy to legislate them). I _also_ don't want "I don't pay taxes, but I make over X, and the IRS only has an enforcement budget of Y, so I can probably just file a false return and not worry about it because they'll be busy with all the 'little people'" to be the calculus of people like the VCs who fund this site. They are absolutely that smart. They remind us constantly. People like them absolutely make this calculation all the time under the current regime.
- pclmulqdq 3y ago
  People whose incomes are above a certain threshold are much more likely to be audited. There are just a lot more people who take the EITC.
  - jonathankoren 3y ago
    We know why the IRS disproportionately audits low income people, because the IRS Commissioner said so. It’s a result of intentional budget cutting on enforcement. They don’t enough investigators, so they go with the easiest to audit, people making less than $20,000. This is a policy decision from top to bottom. https://www.propublica.org/article/irs-sorry-but-its-just-easier-and-cheaper-to-audit-the-poor https://www.propublica.org/article/irs-sorry-but-its-just-ea...
    - pclmulqdq 3y ago
      Your own source links to an article which says that people whose incomes are over $1 million are much more likely to be audited than EITC recipients. $500k to $1 million is when your taxes start to really get complicated. Honestly, if that's where the cheating takes place, they should go for it. It is disingenuous to say that they get audited more than the wealthy, though. Because they don't.
      - deleted 3y ago
        [deleted]
    - deleted 3y ago
mhalle 3y ago
I would assume that there is at least some constant personnel or time cost per audit that the IRS incurs. I would also assume that even with recently increased funding, the IRS only the capacity to audit a small sampling of the taxpayer base. In that case, from a revenue recovery point of view, going after the highest income / highest discrepancy taxpayers produces the greatest return on investment, with some randomness involved to keep everyone on their toes.
- prepend 3y ago
  There’s lots of “automated audits” where a letter is just generated and sent out. It’s like being able to spam offenders of EITC to spend 25 cents to collect a few grand with a 99.99% collection rate. Versus spending hundreds of hours on a complex audit that may or may not yield any fines and has like 25/75 win rate.

peter422 3y ago

So you are saying that in the majority of these cases the fraud is intentional and not accidental? The point being the IRS can completely solve accidental mistakes but just telling everybody what they owe instead of forcing them to calculate it themselves.

Gigachad 3y ago
I assume a fair bit would be people claiming deductions they aren’t actually entitled to like expenses for driving to work.
Arborealist 3y ago
[flagged]
- Johnny555 3y ago
  If the poor are paying fines because they are making accidental mistakes on their tax returns when the IRS already has the numbers that they expect them to fill in on their forms, then how is that not the IRS unfairly targeting the poor? What is fair about fining people for inadvertently writing down the wrong number or doing arithmetic incorrectly?
  - notch898a 3y ago
    People eligible for EITC rarely are handling stacks of 1099 and business transactions. We're talking about single mom with a couple part time jobs with a W-2 territory. The idea their taxes should have mistakes more than average seems a bit far-fetched to me. That said maybe it is cheaper and easier just to eliminate the EITC/taxes/filing for people earning under X. It seems like a waste to even bother with people making under 20 or 30 grand.
    - Johnny555 3y ago
      The idea their taxes should have mistakes more than average seems a bit far-fetched to me. I used to file my return electronically, a lot of my forms were downloaded electronically so I didn't even have to type in most data. Now I use an accountant (who I assume uses even better software than I do). What part of "single mom with a couple part time jobs" makes you think that she's perfect at transcribing data and calculating values?
      - notch898a 3y ago
        Your thesis is the taxes aren't worse, it's that you think the poors are too dumb to go to freetaxusa or something where basically all they have to do is copy and paste the data from their W2?
      - prepend 3y ago
        What makes you think she’s any worse at cutting and pasting than a non single mom? Standard deduction EITC does not involve many calculations even if someone uses the paper form and does it all manually. But most people are using the free tax services made for low income filers.
        kelnos 3y ago
        The mere fact that there are any calculations to be made, simple or complicated, means that some people will make mistakes. That's a fact of life.
        prepend 3y ago
        Of course, but I don’t think single moms are more likely to make mistakes than others.
        Johnny555 3y ago
        Compared to married moms? Maybe not. Compared to accountants, paid tax preparers, or e-filing software that imports the tax forms? Then most likely yes.
- djbusby 3y ago
  Is a "redditism" a criticism from Reddit? Or maybe a common belief from Reddit? What it means?
  - ronsor 3y ago
    It's supposed to mean reddit-tier jokes, but it seems its meaning has been twisted a bit.
    - deleted 3y ago
      [deleted]
- kelnos 3y ago
  > the redditism Please don't do this here. It's an unnecessary ad-hominem attack. If you want to refute what you believe to be inaccurate information, then do so, with references. If you don't have references, then ask the person you're responding to if they have references to back up what they're saying. Otherwise, leave well enough alone.
  - Arborealist 3y ago
    [flagged]
  - deleted 3y ago
    [deleted]

emrah 3y ago

Instead of fining mistakes/omissions which may be deliberste or unintentional, they should calculate, send out a bill and fine those who don't pay up.

hedora 3y ago
They should also send refunds to people that overpay. Also, people should be able to count their own time when calculating tax preparation costs.
- prepend 3y ago
  > They should also send refunds to people that overpay. They do. I’ve gotten checks from the IRS before, sometimes years later. > counting their own time This is not a good idea as my time is $1jillion/hour so the government owes me. Seriously though, our time is factored into the standard deduction.
  - wahern 3y ago
    I've also received checks several times. I've never cashed them, though; I have no idea what the correction was for, and the little paranoid, anti-authoritarian, legally illiterate conspiracy theorist sitting on my shoulder tells me a few bucks isn't worth the risk of falling for the IRS's clever entrapment scheme--because cashing a check can in theory constitute affirmation of the correction, which could have been erroneous for all know, and thus with some handwaving constitute fraudulent affirmation. In reality the Federal IRS is a paper tiger compared to the California Franchise Tax Board. The FTB will shoot and ask questions later, and that's more than figurative if not quite literal. The FTB once garnished a paycheck while I was in the middle of correspondence with them. From first person anecdotes I've heard, some other state tax authorities are similarly ruthless. My father got screwed out of a significant sum (in working-class terms) when Alabama came after him on the basis of some fraudulent 1099s (inflated payment amounts) from when he was a construction contractor. He had already moved to another state and it had been many years since the fraudulently reported income, making it infeasible to fight as it would cost too much to collect enough evidence to rebut Alabama's claim. While the Cal FTB has made national headlines a few times, most state services never make national headlines, so everybody just assumes the IRS are the bad guys, when in reality I think the IRS are relative softies.

poink 3y ago

I don't want "handouts for the poor" (well, I do, but I'm perfectly happy to legislate them). I _also_ don't want "I don't pay taxes, but I make over X, and the IRS only has an enforcement budget of Y, so I can probably just file a false return and not worry about it because they'll be busy with all the 'little people'" to be the calculus of people like the VCs who fund this site. They are absolutely that smart. They remind us constantly. People like them absolutely make this calculation all the time under the current regime.

pclmulqdq 3y ago
People whose incomes are above a certain threshold are much more likely to be audited. There are just a lot more people who take the EITC.
- jonathankoren 3y ago
  We know why the IRS disproportionately audits low income people, because the IRS Commissioner said so. It’s a result of intentional budget cutting on enforcement. They don’t enough investigators, so they go with the easiest to audit, people making less than $20,000. This is a policy decision from top to bottom. https://www.propublica.org/article/irs-sorry-but-its-just-easier-and-cheaper-to-audit-the-poor https://www.propublica.org/article/irs-sorry-but-its-just-ea...
  - pclmulqdq 3y ago
    Your own source links to an article which says that people whose incomes are over $1 million are much more likely to be audited than EITC recipients. $500k to $1 million is when your taxes start to really get complicated. Honestly, if that's where the cheating takes place, they should go for it. It is disingenuous to say that they get audited more than the wealthy, though. Because they don't.
    - deleted 3y ago
      [deleted]
  - deleted 3y ago

mhalle 3y ago

I would assume that there is at least some constant personnel or time cost per audit that the IRS incurs. I would also assume that even with recently increased funding, the IRS only the capacity to audit a small sampling of the taxpayer base. In that case, from a revenue recovery point of view, going after the highest income / highest discrepancy taxpayers produces the greatest return on investment, with some randomness involved to keep everyone on their toes.

prepend 3y ago
There’s lots of “automated audits” where a letter is just generated and sent out. It’s like being able to spam offenders of EITC to spend 25 cents to collect a few grand with a 99.99% collection rate. Versus spending hundreds of hours on a complex audit that may or may not yield any fines and has like 25/75 win rate.