4 ms·

This is FUD. I've interacted with the IRS over $50k and it was perfectly fine. They send me a letter with contact details and you just provide them the informat

by tekla 3y ago

This is FUD. I've interacted with the IRS over $50k and it was perfectly fine. They send me a letter with contact details and you just provide them the information. If you do owe shit, you just go to the IRS.gov site and pay the dumb bill, and the site is perfectly functional and not a PITA to use. I have no idea why people misrepresent the IRS so much

trealira 3y ago
It seems they actually do audit the poor disproportionately, and they profess that it's because their funding has been cut over the past nine years: 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... And as the original article posted shows, entities like Microsoft will spend money on lawyers, lobby Congress, and spend time in court to fight the IRS, whereas the poor won't.
- refurb 3y ago
  They audit low income because of the EITC which has been rife with fraud.
  - trealira 3y ago
    You can read IRS commissioner's, Charles Rettig's, response here: https://www.documentcloud.org/documents/6430680-Document-2019-9-6-Treasury-Letter-to-Wyden-RE.html https://www.documentcloud.org/documents/6430680-Document-201... He plainly says that it's because they don't have the resources to conduct higher income audits.
    - refurb 3y ago
      Bottom of page 4: "Even with declining resources, audit coverage is greater in the larger TPI (total positive income) grouping than the coverage of EITC returns that fall in the lower TPI range". Can you quote the exact part of the letter where they say "we target EITC because we don't have the money to audit high income individuals"?
      - trealira 3y ago
        The IRS budget has been decreasing. As a result, they've been experiencing rates of attrition of their examiners, significantly higher attrition among the examiners who can perform high income audits, which take longer, ranging "from 61 to 251 hours per return." The IRS cannot simply shift examination resources from single issue correspondence audits to more complex higher income audits because of employee experience and skillset. A GS-8 tax examiner is not trained to conduct a high-income, high wealth taxpayer audit. In order to increase parity of number of taxpayers audited, the IRS must reallocate high-graded resources from certain issues to high income, high wealth taxpayer returns. Further, the rate of attrition is significantly higher among these more experience examiners. It is also important to maintaining the voluntary compliance level that the IRS has an audit presence across all income groups, including EITC. In the short term, the IRS will continue to open additional audits in FY 2019 in the category of TPI of $10 million and over. [...] In the longer term, Congress must fund and the IRS must train appropriate numbers of RAs to have appropriately balanced coverage among all income levels. Further, he notes that "EITC correspondence audits are the most efficient use of available IRS examination resources with the average time to complete the audit about 5 hours of return." Although audits have been decreasing among all parts of the population, they've been decreasing more sharply for top earners. According to ProPublica, citing this document[1], audit rates have dropped by about 80% for all groups with an income of over $200k, and only 34% for EITC recipients; as a result, EITC recipients are now about equally likely to receive audits as top 1% income earners (1.41% vs 1.56%). So, due to their dwindling resources, the IRS is auditing all groups less, but they're particularly focusing on auditing low income and EITC recipients and less on high income earners. [1]: https://www.documentcloud.org/documents/6023996-Effects-of-EITC-Correspondence-Audits-on-Low.html https://www.documentcloud.org/documents/6023996-Effects-of-E...
  - oldbbsnickname 3y ago
    The US tax code is purposefully, unnecessarily byzantine to gamify tax avoidance for some and entrap others. It should be an income and situational gradual tax computed by the government. There should no need for tax preparation software, only tax estimation software.
- s1artibartfast 3y ago
  You can write a simple code to audit 10's of millions of simple returns. Of course they are cheaper.
Datsundere 3y ago
> the site is perfectly functional and not a PITA to use. Been trying to get an EIN and the site tells me to call a customer service number. The number has a wait time of 1hr+. Oh also the site has "working hours" Monday to Friday, 7 a.m. to 10 p.m. Eastern Standard Time. that's fucking wild

by tekla 3y ago

trealira 3y ago

It seems they actually do audit the poor disproportionately, and they profess that it's because their funding has been cut over the past nine years: 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... And as the original article posted shows, entities like Microsoft will spend money on lawyers, lobby Congress, and spend time in court to fight the IRS, whereas the poor won't.

refurb 3y ago
They audit low income because of the EITC which has been rife with fraud.
- trealira 3y ago
  You can read IRS commissioner's, Charles Rettig's, response here: https://www.documentcloud.org/documents/6430680-Document-2019-9-6-Treasury-Letter-to-Wyden-RE.html https://www.documentcloud.org/documents/6430680-Document-201... He plainly says that it's because they don't have the resources to conduct higher income audits.
  - refurb 3y ago
    Bottom of page 4: "Even with declining resources, audit coverage is greater in the larger TPI (total positive income) grouping than the coverage of EITC returns that fall in the lower TPI range". Can you quote the exact part of the letter where they say "we target EITC because we don't have the money to audit high income individuals"?
    - trealira 3y ago
      The IRS budget has been decreasing. As a result, they've been experiencing rates of attrition of their examiners, significantly higher attrition among the examiners who can perform high income audits, which take longer, ranging "from 61 to 251 hours per return." The IRS cannot simply shift examination resources from single issue correspondence audits to more complex higher income audits because of employee experience and skillset. A GS-8 tax examiner is not trained to conduct a high-income, high wealth taxpayer audit. In order to increase parity of number of taxpayers audited, the IRS must reallocate high-graded resources from certain issues to high income, high wealth taxpayer returns. Further, the rate of attrition is significantly higher among these more experience examiners. It is also important to maintaining the voluntary compliance level that the IRS has an audit presence across all income groups, including EITC. In the short term, the IRS will continue to open additional audits in FY 2019 in the category of TPI of $10 million and over. [...] In the longer term, Congress must fund and the IRS must train appropriate numbers of RAs to have appropriately balanced coverage among all income levels. Further, he notes that "EITC correspondence audits are the most efficient use of available IRS examination resources with the average time to complete the audit about 5 hours of return." Although audits have been decreasing among all parts of the population, they've been decreasing more sharply for top earners. According to ProPublica, citing this document[1], audit rates have dropped by about 80% for all groups with an income of over $200k, and only 34% for EITC recipients; as a result, EITC recipients are now about equally likely to receive audits as top 1% income earners (1.41% vs 1.56%). So, due to their dwindling resources, the IRS is auditing all groups less, but they're particularly focusing on auditing low income and EITC recipients and less on high income earners. [1]: https://www.documentcloud.org/documents/6023996-Effects-of-EITC-Correspondence-Audits-on-Low.html https://www.documentcloud.org/documents/6023996-Effects-of-E...
- oldbbsnickname 3y ago
  The US tax code is purposefully, unnecessarily byzantine to gamify tax avoidance for some and entrap others. It should be an income and situational gradual tax computed by the government. There should no need for tax preparation software, only tax estimation software.
s1artibartfast 3y ago
You can write a simple code to audit 10's of millions of simple returns. Of course they are cheaper.

Datsundere 3y ago

> the site is perfectly functional and not a PITA to use. Been trying to get an EIN and the site tells me to call a customer service number. The number has a wait time of 1hr+. Oh also the site has "working hours" Monday to Friday, 7 a.m. to 10 p.m. Eastern Standard Time. that's fucking wild