The Truth About the Legality of the Federal Income Tax
By Larry Weinstein, CPA | February 18, 2008
Every year around tax time, a segment of the population, becomes vocal about the supposed illegality of the Federal Income Tax.’
Arguments are presented, such as the 13th Amendment was never ratified, wages are not taxable, only foreign income is taxable and on and on.
Unfortunately, for those making these claims, they are WRONG and create big problems for themselves. Not filing your taxes can is a crime and no matter how much you wish it weren’t true, that is the TRUTH.
For an interesting discussion of this topic, the IRS has published some infomation at http://www.irs.gov/taxpros/article/0,,id=159853,00.html.
Topics: Tax Scams |
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IRS Audit Rate Increases for Taxpayers earning Greater than $1M
By Larry Weinstein, CPA | January 17, 2008
The IRS said today that in the 2007 budget year it audited one out of every 11 with incomes greater than $1 million, which represents an audit rate of 9.25%
If your income is $100,000 or less, only 1% or so were audited.
Still, the IRS said its auditing rates were generally up for people of all income levels. The rates were 9.25 percent for those with incomes of more than $1 million, up from 6.3 percent in 2006; 2.87 percent for those with incomes above $200,000, up from 2.57 percent; and 0.93 percent for those earning under $100,000, compared to 0.89 percent the previous year.
Overall, the IRS looked at 1,384,563 returns in fiscal 2007, 1.03 percent of the total individual returns of 134.4 million in the previous calendar year. The audit rate was up 7 percent from the previous year.
There were 31,382 audits of those with $1 million incomes, up 84 percent from the 17,015 audited in 2006.
On the business side, the IRS said the audit focus was on partnerships and mid-market corporations, those with assets between $10 million and $50 million.
The returns of 59,516 businesses were audited in 2007, 0.66 percent of the total and compared to 52,223 in 2006. About one out of six large corporations with assets of $10 million and higher was audited, 9,644 out of 57,357, were audited, down slightly from the previous year.
The tax agency said its enforcement budget in 2007 was largely unchanged from 2006, so it had to focus on areas of growth and potential risk.
It said enforcement revenues in fiscal 2007, from collections and appeals activities, were $59.2 billion, up from $48.7 billion the previous year.
The IRS also noted that 57 percent of individual tax filers filed electronically last year, up from 54 percent in 2006.
Topics: tax audit |
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Identity Theft-Don’t Let this Happen to You
By Larry Weinstein, CPA | January 5, 2008
I recently was hired by a client who has IRS problems going back to 2000. My client is a victim of identity theft.
How it works is this…Another person, maybe multiple people, have my clients name and social security number.
They are likely in this country illegally and don’t have and can’t legally get their own social security number.
So when they begin to work, they give bogus name and social security numbers to their employers, who obviously don’t do much checking.
The end result, is that the IRS gets W-2 information with my clients name and social security information on it. The problem is that my client never earned all of this extra money.
And the IRS, amended my clients prior tax returns, assessed additional tax, and began enforced collection.
End result, a bank levy, 2 years ago, and at least 2 years of tax refunds were withheld.
Moral of the story….Don’t carry your social security card around with you. Be very careful how you use your social security number.
My client thinks this all started when he lost his wallet, with you guessed it, his social security card in it!!!
Topics: Bank Levy, Wage Levy/Wage Garnishment |
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