IRS Turns to Computers to Choose Who Gets Audited and Who Doesn't

Taxpayers audited by the IRS are not randomly chosen by the people any longer. They are methodically seeking computers, selected line by line, for irregularities in the tax return. An Internal Revenue Service (IRS) audit can also make an honest and thorough taxpayer concerns. In fact, however, is an IRS audit to determine only a review of your tax return to how accurate it is.

Taxpayers as a Certified

People receive cash for their work to replace or complement the paycheck are more likely than others tested, because people do not explain in these lines of work such as servers and hairdressers often, not all of their income and the IRS are aware of this. The best way to do for these people in an audit is to declare all their income and includes these tips. People who should run their own businesses, also be targeted for an IRS> Examination. If checked you will notice that the accountants, lawyers and doctors tend to be leading many of them their own businesses and are responsible for their own accounts. Taxpayers who are too large and unusual prints easily detected by IRS computers, so that the people who should make these types of deductions, whether they are justified. Deductions such as medical and casualty loss that a certain amount of your income before they can be claimed may not exceedlarge charity contribution deductions and home office deductions are the deductions most likely questioned.Other factors that increase the chance of an IRS audit are drastic changes in the income from year to year, a lot of round numbers on your return as 5000 as these are rare in real life, incomplete or illegible returns, a low income, compared to residential or financial commitments and differences between the place of the federal andexists because the people can compare data on returns.

To help combat the problem of taxpayers who do not pay all their taxes have officials at the Internal Revenue Service plans to begin a new National Research Program (NRP) study for individual taxpayers that will be updated and accurate assessment of the selection tools known.

The IRS is the choice of 13,000 taxpayers for audits at random for the study. The IRS plans to select taxpayersobtained different income groups and use the data to the criteria it uses to determine what to do again with the goal of a better, start a job with people who do not pay their taxes in full or update check at all. A random sample of 13,000 taxpayers is small compared to the approximately 136 million people who still pay taxes to taxpayers 13,000 audit is likely that more people than a regular exam.

This latest NRP study, which begins in October 2007 andexamined approximately 13,000 random tax returns each year 2006, the first of an ongoing series of annual individual studies using a multi-year methodology. Similar sample sizes will be in the following fiscal year used.

An advantage of this method compared to previous studies, the tax returns of more than 45,000 taxpayers selected in one year is that the combination of results over rolling three-year periods, the IRS will be able toUpdates and make the development of effective plans on an annual basis, after the first three trials.

The main reason for these random audits is to improve the nation's tax gap, which pretends to be un-filed, reduce to low income and underpaying taxes. The tax difference is the difference between what the IRS receives the tax payments and what they receive from taxpayers. To add an individual taxpayer, the tax gap may not seem like much,but it adds up. IRS officials estimate that the net tax gap for tax year 2001 $ 290 billion.

The first group of 13,000 taxpayers whose income for the examination under the new NRP study, we have received, official letters begin in October that they were part of the IRS study. The majority of the people selected certain lines of their tax returns have confirmed , while in-person audits with an IRSExaminer. In deciding whether you are a professional duty to give you a face in person IRS audit must consider the tax amount in question, comparing the cost of professional assistance.