Skip to comments.IRS Audits Single Mom Because She Is 'Too Poor'
Posted on 12/10/2009 4:31:53 PM PST by Askwhy5times
A single mom in Seattle made $18,992 in the previous year cutting hair at Supercuts. The IRS audited her because they claimed she was too poor to live in Seattle. She lived with her parents and has two children. The IRS claimed she owed the government more than $16,000 in back taxes. It took two years and $10,000 in accountant bills to get the IRS to admit she was just being honest. They still won't let her claim her children because they can't determine who is really supporting them. If we could only get the IRS to be as tough on tax cheat Charlie Rangel.
(Excerpt) Read more at bluegrasspundit.com ...
they’re attacking someone working of course, and never someone on welfare.
Last time I checked (a few years ago), the probability that you will be audited approaches 50% if you claim the EITC.
In a sane world, this poor woman would be allowed to use the Geithner/Rangel tax exemption and that would be the end of it.
Hmmm - I wonder if she voted for McCain? Obama’s got his thugs everywhere...
This is new?
There are millions of “internal audits” on returns, performed by IRS “humans” every year. If they see something that they don’t like, they the audit notice goes out.
The IRS has “flags” when it sees a number that falls outside of that the IRS expects. The value of a good accountant is that they have an idea of where the flags are, and can advise you accordingly.
I used that one year...like 9-10 years ago I think. I guess I’m safe now. they only go back 4 years I think.
“Sorry, but I don’t consider anyone who works for the IRS on the same evolutionary scale as me.”
The IRS doesn’t pay well, and its accountants are not well-regarded.
However, many accountants work for the IRS when they first get their CPA certification, which looks great on a resume when you’re going for a job (or new clients).
“they only go back 4 years I think.”
Thought it was 7 years.
Seven years—and longer if they can establish you are running an ongoing criminal enterprise.
7 years from last point of contact between parties.
Last time I looked 30% of returns with EITC were being subjected to a full audit.
That's one of the reasons Charles Rangel was able to evade taxes for so long ~ the folks who ought to have been auditing him really were nailing the hair dressers, fingernail fixers, dog groomers, janitors, part-time cabdrivers, grad students with part time jobs or small stipends, .........
The total amount of money at risk with EITC is in the few tens of billions ~
Last point of contact?
What does that mean?
If my last tax return was 1978 do they go back to 1971?
I’ve only know one person that ever worked for the IRS. She was an extremely persnickety old lady. She was working as a secretary and boy o boy you better have every dang form filled out perfectly or she’d let you have it! Nothing got passed her. I mean NOTHING.
What constitutes “fraud”?
A mistake on your taxes?
The normal statute of limitations is 3 years from the date the return is filed. It can be 6 years if income is understated by more than 25%.
Section 6501(e)(1)(A) provides that if the taxpayer omits from gross income an amount properly includible therein that is in excess of 25 percent of the amount of gross income stated in the return, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time within 6 years after the return was filed.
No a mistake is not fraud. Willfulness is required.
In a landmark case Louis Kovel, a former IRS agent and accountant, had been hired by a law firm to help advise its clients. Kovel met with and received information from a client under IRS investigation for tax fraud. When subpoenaed by a grand jury, Kovel refused to answer questions about the client and was sentenced to a year in prison for contempt of court. The Second Circuit Court of Appeals reversed the contempt citation. It ruled there was no reason in the case to exclude accountants from the list of those who assist lawyers in providing legal services ( United States v. Kovel ).
Rubenstein described the EITC scams as common, well-organized, and massive. According to the General Accounting Office, one-quarter to one-third of all EITC claims are improperly paid. That amounts to at least 6 million households receiving at least $12 billion fraudulently (2007 numbers).
Rubenstein blames this gaming of the system, not so much on the illegal immigrants, but on their enablers: the IRS (which does not verify Social Security numbers or eligibility criteria and which publishes Spanish-language materials about the EITC); tax preparation and filing services, such as H & R Block; and advocacy groups, such as the left-wing Center on Budget and Policy Priorities. The latter, for example, offers outreach programs designed to hook immigrants into the EITC entitlement culture.
If IRS kept the auditors and dispensed with the audits of the EITC filings, these additional resources could be thrown against the high dollar value earners and income tax proceeds would skyrocket.
Audits of EITC waste $100 for every $1 earned.
EITC is the cash cow that supports ACORN.
You are free to believe that if you want. Frankly, it’s far more likely ACORN is financed by FHA/VA.
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