From the WSJ (link inside the post):
"Tax agency spends too much effort on people who make $200,000 to $400,000 and too little on wealthiest Americans, report says..""In fiscal 2014, the IRS audited 1.5% of tax returns for people with incomes between $200,000 and $400,000, and 12.1% of returns for filers with incomes above $5 million."
"But the tippy-top is where the money is. An auditor working those lower-dollar cases recommends $605 in additional taxes per hour, while one working on a $5 million return will find $4,545 per hour, according to the inspector general’s report."
Thoughts?
http://www.wsj.com/articles/irs-urged-to-focus-audits-on-wealthiest-144…
Why don't they just go a step further and have the government actually fill out your tax returns out for you if you make above $5-10 million? If you go that far, you might as well make it for anyone who makes above $100K. But then, I suppose a lot of people would show income of $99K, so we might as well just have the IRS fill out the forms for everyone. It's much easier that way and we don't want anyone making mistakes.
Big brother is watching....
Give up your US citizenship while you still can.
It sucks, but it is logical. This is why all of the fortune 100 companies get audited. GM has a full-time office for irs auditors. I'm actually surprised they only audit 12% of income above 5 million.
...
It is not necessary. As they will soon ban cash, everything will be traceable by software and auditors won't be needed.
define soon..
Disconnect between the IRS's budget and the amount they bring in. I.E. just because they get the government $605, which seems high anyways, that doesn't mean it gets $605 added to its budget.
Not exactly sure why this is getting so much hate. Pretty sound policy approach. Taxes suck and there's definitely a conversation to be had about reducing spending and reducing taxes, but that doesn't mean wealthier people with better access to accountants/lawyers can knowingly break the law. Pretty sure there was a Freakonomics thing about how even a slight increase in audits across the board greatly increases tax revenue since people stop under-reporting income out of fear.
Thank you for bringing some reason into this thread.
I think there is the misunderstanding that taxes are simple once you make above a certain $$ amount. The reasoning the IRS is discussing this change in tax strategy, is due to the grey areas of the tax code that can only be accessed by those high income earners. (they also pay for very good accountants and lawyers). Similarly, as in finance you make assumptions, there "interpretations" of the law. The private sector applies the law as they understand (obviously to their benefit), meanwhile an auditor may interpret it differently. The displeasure comes when the taxpayer has been sold by an accountant the idea of saving money on taxes only to realize years later the government disagrees with what was done. Hence, very upset taxpayer who blames the IRS, not the accountant.
Fuga ea officiis exercitationem quo sunt vel. Veritatis velit iusto quaerat quis. Minima nobis repellat totam voluptatem ut blanditiis. Fugit voluptates culpa et minus. Sed ut voluptatem eum incidunt facilis dolores quas. Quia est sed ipsum eos.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...