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IRS audits poorest families at five times the rate for everyone else

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Re: IRS audits poorest families at five times the rate for everyone else

#101

Post by charlieyu1 »

jeffwask wrote: post #39

The budget for the IRS has been continually slashed since Reagan despite all research on the subject showing increasing funding to the IRS funding increased revenue well beyond it's cost. The IRS has publicly stated on a number of occasions they do not go after the wealthy because they do not have the resources to win in the ensuing legal battles. This leaves the poor and middle class as the only groups they can targ…

I have no idea why the poor are advocating tax rises when they are clear on the losing side

Re: IRS audits poorest families at five times the rate for everyone else

#102

Post by JumpCrisscross »

washbrain wrote: post #66
jeffwask wrote: post #39

The budget for the IRS has been continually slashed since Reagan despite all research on the subject showing increasing funding to the IRS funding increased revenue well beyond it's cost. The IRS has publicly stated on a number of occasions they do not go after the wealthy because they do not have the resources to win in the ensuing legal battles. This leaves the poor and middle class as the only groups they can targ…

This is 100% the story. The IRS can help make sure everyone is playing fair if we sufficiently fund them. And they can stop policing all the little issues and go after the big ones if we sufficiently fund them. AND sufficiently funding them is expected to increase tax revenue above the cost of funding them . It's the most obvious and should be the most bipartisan approach. It's introducing no new taxes, it's equitabl…

> should be the most bipartisan approach

Lol [1][2][3].

[1] https://www.washingtonpost.com/business/2021/07/07/irs-taxes...

[2] https://www.reuters.com/world/us/us-infrastructure-deal-teet...

[3] https://www.foxbusiness.com/politics/middle-class-americans-...

Re: IRS audits poorest families at five times the rate for everyone else

#103

Post by jabbany »

kube-system wrote: post #40
jabbany wrote: post #30

Earlier quoted context omitted.

If it's that complicated and they are doing audits anyways, can't they just automatically apply EITC without relying on people to figure out this stuff and how to claim it?

No because tax prep companies have lobbied our legislators to make that illegal (and many would politically be against the data collection that would be logically necessary to determine many of the common credits/deductions)

The second thing could be easy to deal with though, just make data sharing be a consent based process.

You can opt in to auto-filing by allowing data sharing with the IRS. People who appreciate the convenience can opt in and those who don't can just not (instead manually providing the requisite documents/proofs/numbers just like today).

Re: IRS audits poorest families at five times the rate for everyone else

#104

Post by ohiovr »

Free tax preparation services are vastly inferior to a personal service. I got audited because I did some stock market gambling and my return only showed the loss and gain for everything and not for every stock traded. So the IRS sent me a letter that my income was in the tens of thousands of dollars because every instrument sold was assumed to be of no cost to acquire making it 100% capital gains. When TD ameritrade reported my trades they did not report the cost basis to them. So I got a letter saying I owed thousands in taxes with no indication in there that I should see a tax prep to clear it up and submit a correction.

Lessons learned:

1. Don't gamble or invest in stocks. 2. Always use a professional to do your taxes.

I was also informed never to sign a letter to agree. Fortunately I never did that.

Re: IRS audits poorest families at five times the rate for everyone else

#105

Post by washbrain »

cosmiccatnap wrote: post #45

Capital is a cascading problem of inequality. If you have money you can pay to keep it by having someone well versed in the tax laws to find a loophole. If you have a lot of capital you can even then use that money to essentially buy a new loophole in the tax law. Sad...but not surprising. Money buys everything in this age even laws and the people that govern them.

Surprising to see this downvoted. The OP is saying, "the wealthy have more resources to protect their wealth from audits." Which, like, is objectively true?

And if you think money can't buy political goodwill these days, I'm not sure what to tell you...

Re: IRS audits poorest families at five times the rate for everyone else

#106

Post by tomohawk »

shkkmo wrote: post #74
tomohawk wrote: post #44

And we're now going to get 87,000 more auditors. This is the largest increase in the federal police force (they are all armed) ever. The politicos are already dancing around this saying how "middle class" people will not have an increased chance of audit.

> And we're now going to get 87,000 more auditors. This is the largest increase in the federal police force (they are all armed) ever. This is factually incorrect in so many ways. Please vet your sources better.

Articles are all over the place. It's not like its a state secret.

https://www.forbes.com/sites/robertwood/2022/08/11/irs-to-ad...

Re: IRS audits poorest families at five times the rate for everyone else

#107

Post by throwaway5959 »

washbrain wrote: post #35
tpmx wrote: post #28

Earlier quoted context omitted.

Quoted post unavailable.

Wait what? What about defining "correspondence audits" is political?

For some people, it’s easier to ask them what isn’t political than what is. Once you realize that, their constant strife makes a lot more sense.

Re: IRS audits poorest families at five times the rate for everyone else

#108

Post by mrguyorama »

tpmx wrote: post #28
graton wrote: post #6

As the article states the "audits" are for the most part (~85% of the time) a letter sent to the person asking them to provide documentation for something. I would think most people think of an audit as having to meet in person with an IRS representative going over their taxes.

Quoted post unavailable.

Your persecution complex is incredible

Re: IRS audits poorest families at five times the rate for everyone else

#109

Post by JumpCrisscross »

albatross13 wrote: post #19
trebbble wrote: post #12

Earlier quoted context omitted.

From the article: > A large increase in federal income tax audits targeting the poorest wage earners allowed the Internal Revenue Service to keep overall audit numbers from further declines for Americans as a whole during FY 2021. I'm guessing low-income people are, for a bunch of reasons including having simpler finances and ~no ability to hire legal counsel or other outside help, way cheaper to audit than those wit…

>without requiring more funding I might be missing something here, but are you disregarding the 80bn the IRS just got for another 87,000 auditors? Or are we talking funding for something else?

> the 80bn the IRS just got

It's not got. (It passed the Senate on Sunday and is scheduled to be passed by the House tomorrow.)

Re: IRS audits poorest families at five times the rate for everyone else

#110

Post by cortesoft »

NovemberWhiskey wrote: post #85
jmyeet wrote: post #75

Earlier quoted context omitted.

> Is the IRS just supposed to ignore that? Yes. Or, better yet, just give it to everyone and pay for it by: 1. Eliminating the carried interest tax credit, which has somehow survived 15+ years. It is quite literally a giveaway to hedge fund managers who get to pay lower taxes on managements because reasons. It most recently survived by being removed from the Inflation Reduction Act at the behest of Senator Kirsten Se…

> Or, better yet, just give it to everyone and pay for it by The IRS doesn't author tax policy. Congress is over there --->

Sure, but as the article states, the IRS is already ignoring entire categories of tax fraud that is illegal under the law. This means the clearly have discretion over what to pursue. They could choose not to pursue EITC fraud at all.
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