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When the IRS 'likes' your Facebook update

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Re: When the IRS 'likes' your Facebook update

#31

Post by gamblor956 »

cheetahtech wrote: post #11

I am for over complicating the tax code. Let me tell you why. If we over complicate the tax code as well as complicate doing your taxes, maybe folks will finally get more upset with it. The more folks get upset, maybe the more outspokeness to change it. The IRS is a huge problem and the loop holes are even a greater problem. I am all for flat or fair tax at 9-13%. First you might say no, but with a flat tax, you no l…

A flat tax is highly regressive and is basically a giveaway to the rich. A flat tax system that attempts to be fair ends up being a progressive rate system by another name. Either way, a flat tax system isn't any better than the current system because the progressive marginal rate structure isn't where the complexity of the tax code lies.

Re: When the IRS 'likes' your Facebook update

#32

Post by sliverstorm »

yeukhon wrote: post #19
Ricapar wrote: post #14

I find the "well then just pay your taxes" answers to be on the same level of "well if you have nothing to hide...". You can be a honest and tax-paying citizen of society and still get audited. There's always the chance that there may be a mistake somewhere. The US tax code is not simple. Even if you shell out $20-$80 a year to do it via TurboTax, H&R Block, whatever, there's always room for a mistake. And even if th…

They always audit your tax, no matter what. I just got audited and boom they wanted $63 more. Whatever you paid this year, a few years later they will review again...

There are different levels of audit. The "standard" audit they apply to everyone is basically a cross-check of your 1099's and W-2's, as well as a form check to look for computational errors (or didn't-follow-instructions errors).

When people say "I am being audited", they mean the higher levels of audit where they must produce extra records for the IRS to prove deductions & such.

Re: When the IRS 'likes' your Facebook update

#33

Post by diminoten »

TallGuyShort wrote: post #17
matthewmacleod wrote: post #10

Earlier quoted context omitted.

Except it's not. This is the "you don't get to complain if you brag about your tax evasion in public and then go to jail" argument.

Except that I don't evade taxes, and I don't want the IRS using my online presence to profile me and decide if I fit the profile of a tax evader.

Being afraid they might get things wrong is like being afraid your car might lose its wheel on the highway.

Could it happen? Yes. Is it a risk one must take in order to partake in the luxuries of the lifestyle one leads? Yes.

Re: When the IRS 'likes' your Facebook update

#34

Post by john_b »

cheetahtech wrote: post #11

I am for over complicating the tax code. Let me tell you why. If we over complicate the tax code as well as complicate doing your taxes, maybe folks will finally get more upset with it. The more folks get upset, maybe the more outspokeness to change it. The IRS is a huge problem and the loop holes are even a greater problem. I am all for flat or fair tax at 9-13%. First you might say no, but with a flat tax, you no l…

You are missing the incentive structure that results from over-complicating the tax code.

Getting angry about an over-complicated and taking productive action to change it takes effort. Lots of it, sustained over time in an organized and intelligent way. But people generally aren't passionate about taxes. They're passionate about hobbies, their families, friends, major life goals, and so on. Taxes are just an obstacle to move past.

When you overcomplicate the tax code, you create a huge market for companies willing to take on that burden for you, at a price. Because they operate at scale, they achieve efficiencies that no individual or small group can hope to achieve. Doing peoples' taxes is much more palatable when you're getting paid to do so. Meanwhile, John and Jane Smith can go back to what they're really passionate about.

For a price.

As a litmus test for a country's tax code, I propose: if a typical high school graduate with access to all necessary information cannot do his or her federal/national taxes in an afternoon, your country's tax code is too complicated.

Re: When the IRS 'likes' your Facebook update

#35

Post by gamblor956 »

TallGuyShort wrote: post #17
matthewmacleod wrote: post #10

Earlier quoted context omitted.

Except it's not. This is the "you don't get to complain if you brag about your tax evasion in public and then go to jail" argument.

Except that I don't evade taxes, and I don't want the IRS using my online presence to profile me and decide if I fit the profile of a tax evader.

The IRS doesn't use your online profile to decide if you're a tax evader. It's simply fearmongering from anti-tax advocates.

The IRS doesn't even have the budget to carry out basic audits in which the bulk of the investigational burden is placed on the taxpayer (by means of responding to auto-generated documentation requests). It certainly doesn't have the budget to invest in a high-tech system that could track multiple social media platforms and somehow connect that to financial spending or tax reporting.

Re: When the IRS 'likes' your Facebook update

#36

Post by talmand »

Could this turn into something interesting if people just started posting fake data into their profiles? Pollute the waters so to speak?

Bonus is that some of your friends and family will wonder if you really did take that expensive trip to Australia.

Re: When the IRS 'likes' your Facebook update

#37

Post by ewoodrich »

Ricapar wrote: post #14

I find the "well then just pay your taxes" answers to be on the same level of "well if you have nothing to hide...". You can be a honest and tax-paying citizen of society and still get audited. There's always the chance that there may be a mistake somewhere. The US tax code is not simple. Even if you shell out $20-$80 a year to do it via TurboTax, H&R Block, whatever, there's always room for a mistake. And even if th…

The preliminary flagging process is done through an automated system that compares your return with others in your income bracket, as well as other characteristics that suggest errors or ommisions. I assume this would be one of many signals that are included. Besides, having your return flagged doesn't mean you will be audited, it just means a human will likely review it and make a determination.

There is no way I could imagine social network posts would be used as the sole or even as a major indicator for an audit. If it was, the audit success rate would be terrible, anyway.

Re: When the IRS 'likes' your Facebook update

#38

Post by john_b »

talmand wrote: post #30
cheetahtech wrote: post #11

I am for over complicating the tax code. Let me tell you why. If we over complicate the tax code as well as complicate doing your taxes, maybe folks will finally get more upset with it. The more folks get upset, maybe the more outspokeness to change it. The IRS is a huge problem and the loop holes are even a greater problem. I am all for flat or fair tax at 9-13%. First you might say no, but with a flat tax, you no l…

I don't see how the US Federal Tax Code could get more complicated without just inserting pure gibberish into it. The thing is, most of the tax code doesn't apply to everyday citizen. The really complicated stuff only applies to a certain number and I'm sure they have well paid people doing their best to avoid those sections. The easy way to get people riled up about taxes? Remove withholding from paychecks and force…

> "The easy way to get people riled up about taxes? Remove withholding from paychecks and force people to write that big check every April. Then you'll get an uproar since most people have no idea how much in taxes they pay. But that's likely not the point you're trying to make."

This would have the desired effect, but also others. Mostly that the IRS would suddenly have a lot of individuals who owed money to the government but couldn't pay it. I agree with this in principle, but the current system has trained (intentionally, I would argue) people to not think about what they pay in taxes or what it gets used for. Suddenly reverting to a system that demands financial planning and responsibility from individuals isn't workable. It takes time.

Re: When the IRS 'likes' your Facebook update

#39

Post by matwood »

yeukhon wrote: post #19
Ricapar wrote: post #14

I find the "well then just pay your taxes" answers to be on the same level of "well if you have nothing to hide...". You can be a honest and tax-paying citizen of society and still get audited. There's always the chance that there may be a mistake somewhere. The US tax code is not simple. Even if you shell out $20-$80 a year to do it via TurboTax, H&R Block, whatever, there's always room for a mistake. And even if th…

They always audit your tax, no matter what. I just got audited and boom they wanted $63 more. Whatever you paid this year, a few years later they will review again...

Most people's taxes are pretty basic and this is likely the typical audit response. The one thing I would have expected though is we want $63 more plus a $100 fine for making a typo.

One thing that always bugs me, is that if the gov. has enough information to know you owed $63 more dollars they had enough information to tell you exactly what you owed up front and you could have skipped doing taxes and paying turbo tax or whoever in the first place.

Re: When the IRS 'likes' your Facebook update

#40

Post by swalkergibson »

oldstrangers wrote: post #15
matthewmacleod wrote: post #10

Earlier quoted context omitted.

Except it's not. This is the "you don't get to complain if you brag about your tax evasion in public and then go to jail" argument.

Except it's exactly the same.

It is not. Tax evasion is an actual crime. The IRS using public signals from social media to determine if somebody is cheating on their taxes is not the same as the NSA tracking your GPS location via your cell phone at all times.
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