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IRS audit rates are finally going down after having gone up as the IRS had put funds into updating computers, customer service and other programs. When the reorganization was over the IRS was back to enforcement with a vengeance. However, recently the rates have lowered.
For example during 2003 the audit rate for all individual tax returns rose 14%, the audit rate for taxpayers with incomes over $100,000 rose by 31%.
But for 2019, they audited 0.45% of individual tax returns down from 0.59% in 2018, and down by more than half from what it was in 2010, when 1.11% of taxpayers were audited.
Seizures, liens and levies had risen too! In 2003, seizures rose 539% of what they were in 2000, liens rose 327% and levies rose 765%.
However, in 2018 the IRS published their Data Book which showed significant declines due to a shrinking budget and less staff. But, when you start with such a large budget even a decline in liens results in thousands of problems!
Over the years, The IRS has begun doing much more to audit smart like national research programs so they can select audit targets with greater effectively like computer matching programs for K-1s to find income paid by partnerships, S corporations and trusts to taxpayers.
Offshore transactions are made a high priority and the IRS is aggressively pursuing those who use foreign bank accounts to escape taxes. Another high priority target is abusive tax shelters which have been promoted on the internet.
Specifically targeted: Those with “total positive income before taxes but low net taxable income after deductions.
The IRS also has new information-sharing programs with states for use in shelter cases and others to detect tax evasion.What can we do for you?
We can review the assessment by the IRS to see if they made any mistakes in calculations or in the application of the law to reduce your deficiency. As a former Tax Counsel for the Department of Finance I know there are many mistakes that can be made at the Audit level.
We can make offers to settle the matter and if that doesn’t work; we may appeal the auditor’s decision to his superior. The agents are under pressure to close cases so they don’t want too many cases to be appealed as this doesn’t look good on their performance review.
We may make an Offer in Compromise to the IRS, that is offer to pay less than the assessment because you cannot make or ever make payment.
We may offer to pay off the deficiency in installments as that may be much easier for you.
If we are convinced that we can get a better deal form the IRS, we will tell the Service that we are filing with the Tax Court for a trial. This usually has the effect of getting a settlement offer accepted.
There are more strategies for dealing with the IRS; let us explain them to you.
Do you have tax problems? Or do you simply want professionals to prepare your returns? If so, consult the experts. Greenberg & Merola, LLP has CPAs associated with our firm to help give you the correct expert advice you deserve!
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IRS TAXES - Our clients a married couple live in New York and had a small family business. Unfortunately, they failed to pay their personal income taxes and their business employment taxes. They went to the IRS and were told to pay approximately $150,000 in one payment. There is a Statute of Limitations for 10 years. Then they came to us and we recalculated what was owed and made an offer and compromise which was accepted for $25,000. That is approximately 16 CENTS ON THE DOLLAR. And we got them a 24 month payout period.
IRS TAXES - Our client came to us who owed over $15,000 to the IRS and they were taking his low income via a wage execution. We showed the IRS that he was in a 12 step program and trying to get his life back on track and that is why he was not able to make a full payment to them. We got them to agree with us and they took $1,500! An amazing 10 CENTS ON THE DOLLAR.
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