Question for the forum...

[Adsos Letter]

Do you think the IRS will start more aggressive pursuit of the underground economy?

Just curious, as I have been led to understand that it accounts for quite a chunk of untaxed value.

[Mind_your_head]

1. Question for you.....do you think that the IRS will ever start pursuing/analyzing

the tax returns of the top 1%'ers?

No, they don't/won't -----they don't even try! I've heard it from an IRS agent's mouth that they don't.

[Adsos Letter]

2. They SHOULD go after that top-tiered 1%....

My question was more about whether people thought that the IRS would become more aggressive with the underground economy, not whether they were going to be just in their application of tax law.

[Mind_your_head]

3. They'd net more (fiat) money if they went after the top tier

As far as the underground economy, I dunno....the cost of trying to catch some of it wouldn't be worth the effort.

The REAL benefit would be in catching some in the top tier.

Madoff-like? He's SURELY not the only one.......

[GliderGuider]

5. Delete- wrong place

[Danascot]

4. Clue to the IRS:

"Because that's where the money is." - Willie Sutton

[Citizen Number 9]

11. Ahem. Going after the big record keepers is how they nail the little cheats.

Business has to keep records of just about every penny. Or else.

When they audit those who actually keep records (business), they find the proof of the individual cheaters who take money and don't report.

For example, business doesn't have to report income of less than $600 paid to individuals. That doesn't mean the individual doesn't have to report or pay tax on it, however. They just think that if they don't get a 1099 at the end of the year there is no evidence. When there is an audit of the business, all that proof is right there.

If you are interested, the next thing that happens is all those little vendors start calling and threatening the business;

"You are lying to the IRS!"
"I'll never work for you again!"
"My accountant is going to sue you!"
and "You can't prove anything!"

Of course, it's not up to the business to prove anything. The auditing agency is already holding copies of the cancelled checks used to pay the vendors showing that they ran off to the local check cashing outlet to cash the check at a discount in order to avoid depositing it into their account.

[Citizen Number 9]

7. I think you might have heard wrong.

The IRS audit rate for incomes over $1 million is about ten times higher than that of those under $100K.

[Mind_your_head]

8. Show me evidence of what you state......that's just not true ~ at ALL

You're spreading manure.

[Citizen Number 9]

10. Data on the IRS? Too easy to find.

Here's the link to the 2007 enforcement activity.

http://www.irs.gov/newsroom/article/0,,id=177701,00.html

You'll have to go to the PDF links at the end of the press release for the actual data.

For individual returns of less than $100,000 total coverage was .93%

For individual returns of more than $1 million, total coverage was 9.25%

Whadd'ya know, that's nearly exactly ten times higher.

If you want to count full-blown field audits as opposed to auditing by mail, the numbers are;

Returns of less than $100,000 : 183,795 audited / 117,821,600 returns = 0.16%

Returns of more than $1 million : 12,259 audited / 339,138 returns = 3.6%

BTW, that's twenty times more frequent for the big reporters.

For the life of me I can't understand how people want to go through life basing all their decisions on false information. What's even worse is when they go the the Internet and start saying rude things about people who actually know the facts. Thanks in advance for the public apology.

[galileoreloaded]

12. You have to excuse people for their .....

cognitive dissonance. They don't truly often understand what is happening to us as a country, and get locked into an ideal that explains any economic issues as the fault of others. It is easier to blame nameless, faceless entities than come to grips with the rapid "undevelopment" of the United States.

It becomes more about being angry with yourself for being late to the party in regards to a particular worldview, and attempting to bend reality to avoid readjustment to new realities. Change we can handle, rapid change, not so much.

[GliderGuider]

6. The purpose of the IRS is not only to collect money

They are a social-compliance institution. It's not really the money that's important, it's that no citizen outside the plutocracy ever, ever, ever gets the idea they can do what they want with impunity. If the underground economy (which includes cash transactions, barter and local currencies) ever looks like it's becoming a significant factor, the risk that the rabble might slip their leashes will become insupportable to those in power. When that happens, they will "Cry 'Havoc', and let slip the dogs of war". That means draconian enforcement regardless of the amounts involved. We've seen it in the War on Pot, we'll see it in the War on Barter. Ten years in prison for exchanging a pig for some carpentry? It's not that far-fetched.

For more on Guardian Institutions like the IRS, read http://www.paulchefurka.ca/Politics.html#Guardian

[westerebus]

9. IRS ?

I know that the state's have already started backward looking audits. If your state is in a bind as most are, expect inquires from auditors about past filings that were acceptable in the recent past that are all of a sudden suspect.

Everything from what status your business is, retail or wholesale; your accounts on taxables and non taxables, deductions on losses, pension withholdings, multi state filings on income, etc. Plus the personal side as to why a rental account deposit refund's interest wasn't declared? And on and on.

For example, why didn't you charge sales tax to this credit card account? Because the state doesn't pay sales tax. The credit card account belonged to another state agency. True story.