Skip to comments.
Five Easy Ways to Earn Yourself an IRS Audit
Wall Street 24X7 ^
| Charley Blaine
Posted on 04/14/2014 1:43:12 PM PDT by SeekAndFind
Around this time of the year, all of us start to wonder if this is the year the Internal Revenue Service will come to audit. Most of us don’t have to worry, really, because we are honest and report our incomes accurately and claim only the deductions and tax breaks we deserve.
But there are a few who insist on pushing the envelope — or just blunder — and win themselves a communication from the IRS. Some of these mistakes are very common, yet can be very costly.
The IRS even has a list of frivolous tax arguments. Here some of the sure-fire triggers that will almost certainly get you certified mail communications or a knock on the door from a member of the IRS.
You hide income offshore.
Hiding income offshore has often been a problem for the affluent. The operative word is “hide,” as in not reporting that the money parked offshore is either generating income or is income. If the IRS finds out about it, they will respond. Just ask H. Ty Warner, the creator of Beanie Baby plush toys. He hid more than $100 million in Swiss bank accounts. He pleaded guilty in late 2013 to not reporting $3.2 million in income in 2002. In all, the IRS said, he failed to report more than $24.4 million in gross income between 1999 and 2007. He was lucky. He earned probation rather than jail time.
You’re a tax protester.
Being a tax protester means you try to argue that the U.S. tax code is unconstitutional. Or that you don’t have to pay taxes for any reason. Or that you will not pay your taxes because you object to government policies. The courts have routinely knocked down these arguments. Actor Wesley Snipes tried to claim he did not owe millions in income taxes. He went to federal prison.
You claim big home-based business deductions.
It is fine to run a business from your home, and normal deductions come along with that. But the interest of the IRS will jump if you report sizable losses from your business on a consistent basis. The IRS will wonder if you are really running the venture to generate tax deductions — and hide taxable income. (The correct answer is to earn a profit.) Most abusers use the home-based business to hide living expenses or personal travel costs. Michael Craig Cooper of Topeka, Kan., earned a 20-year jail sentence for marketing a phony tax relief system built around home-based business deductions.
ALSO READ: Is a 35% Corporate Tax Rate Bad for the Economy?
You claim large unreimbursed business expenses.
Having large unreimbursed business expenses means that you claimed huge amounts of driving expense for your job that your employer did not reimburse you for or that you claimed as a business expense. Or you claimed clothing expenses that are not allowed. Or you tried to write off meals, entertainment and other items that do not qualify. If you hear a tax preparer claim he can boost your tax refund substantially this way, find someone new to do your taxes. Always remember: You can deduct only the excess above 2% of your adjusted gross income.
You claim large itemized deductions.
Large itemized deductions can cause scrutiny, such as a contribution to a charity, religious organization, school or college. Or big mortgage interest deduction. The IRS may ask for documentation. Make sure you have it. The auto donation deduction can trap a lot of people. There are many “fat chance” deductions that create flags. The deduction is limited to what the charity realizes if it sells the vehicle. If the charity keeps the vehicle, however, you can deduct the fair market value, but you’ll need to substantiate it.
ALSO READ: 5 Big Tax Myths — Who Really Pays What
Be advised that this only scratches the surface on how to easily get an IRS audit. There are many other ways to win the scrutiny of the IRS, some of which include the following:
- You omit income from your return. If there’s a W-4 statement or a Form 1099 on file, the IRS can match it up to you.
- There are math errors.
- You brag a lot of about your big tax deduction. Someone may mention it to the IRS.
- You claim a loss on a hobby such as expenses for getting Fido ready for a dog show. Hobbies are not deductible.
- You make a careless mistake, such as transposing numbers in your Social Security number.
TOPICS: Constitution/Conservatism; Culture/Society; Government; News/Current Events
KEYWORDS: audit; irs
1) Start a local Tea Party group.
2) Publish a book critical of Obama.
posted on 04/14/2014 1:45:43 PM PDT
(There can be no Victory without a fight and no battle without wounds)
posted on 04/14/2014 1:48:55 PM PDT
("It is not the color of his skin, ... it is the blackness that fills his soul")
Donate to a Tea Party Group.
Speak out against the Regime.
Organize any group protest of Federal government action.
posted on 04/14/2014 1:49:11 PM PDT
1. Investigate voter fraud in Sheila Jackson Lee’s Congressional District.
2. Investigate voter fraud in Elijah Cummings’ Congressional District.
The courts have routinely knocked down these arguments.
Those 'neutral' courts funded with income taxes? Please.
posted on 04/14/2014 1:54:18 PM PDT
(Principiis obsta & Finem respice - Resist The Beginnings & Consider The End)
Become a Christian
Own a business without ties to the Obama regime
Criticize ObamaCare in any way
Donate to conservative causes
Buy a gun store or manufacturer
Come out against homosexual marriage
Join the NRA or Tea Party
posted on 04/14/2014 1:58:26 PM PDT
(I will raise $2M for Cruz and/or Palin's next run, what will you do?)
Comment againt ObamaCare via social media of any type/site
posted on 04/14/2014 2:00:25 PM PDT
This isn’t exactly related, but a farmer wanted to hide some silver, so he dug a hole under his pig-pen and put it there. Eventually his heirs extracted it and it was re-processed, minted and sold.
I think this would still work.
posted on 04/14/2014 2:04:01 PM PDT
(Democrats delenda est. New US economy: Fascism on top, Socialism on the bottom.)
Purchase ammunition, of an caliber
-Comment on this thread.
posted on 04/14/2014 2:05:33 PM PDT
(Better dead than red!)
6) Organize to clean voter rolls, eliminate voter fraud, or campaign for voter photo ID.
(Thank William Jefferson Clinton for ‘motor voter’, which gave Dema-commies the ability to overthrow the Republic!)
posted on 04/14/2014 2:06:24 PM PDT
(Tanstaafl - its not just for breakfast anymore...)
Be a Victim of Obamacare and speak about it.
posted on 04/14/2014 2:14:44 PM PDT
Youre a tax protester.
Being a tax protester means you try to argue that the U.S. tax code is unconstitutional. Or that you dont have to pay taxes for any reason. Or that you will not pay your taxes because you object to government policies. The courts have routinely knocked down these arguments.
Ah, you mean that you cannot refuse to pay your income-tax due to the government (a) making financial support of governments that engage in state-sponsored terrorism illegal, and (b) engages in state-sponsored terrorism (namely Fast & Furious).
Or that the tax-laws must be civil, not criminal, in nature because (a) the Constitution prohibits Ex Post Facto laws (to the federal and state governments); (b) the court has ruled that such prohibitions do not apply to civil laws, but only criminal law; and (c) that the tax laws have in the past been altered in ex post facto manner.
posted on 04/14/2014 2:37:59 PM PDT
(Q: Why am I here? A: To do Justly, to love mercy, and to walk humbly with my God.)
Also thank the RINOs for reauthorizing it to continue when it was due to sunset.
posted on 04/14/2014 2:54:46 PM PDT
(You can only do what you can do.)
You make a careless mistake, such as transposing numbers in your Social Security number.
I know from personal experience, what a hassle a simple typo can be. One number mistyped can become a large problem.
posted on 04/14/2014 3:06:02 PM PDT
(God is not the author of confusion. 1 Cor 13: 33)
Resist unionization of your family owned business.
-Comment on this thread.
"Cow...c-o-w ... eieio"
posted on 04/14/2014 6:36:30 PM PDT
(I fear for my Republic due to marxist influence in our government. Open eyes/see)
Both my children got an “audit” letter for last year’s taxes. Each made about $1000, and therefore owed nothing, but had to file a tax form, which put them on the system.
Then we cashed out a joint mutual fund for each of them, to put the money in a college fund. We had been reporting the two funds on our taxes every year, but forgot to report the final sale, which was actually a loss, on our taxes.
So the IRS takes the entire sale price and credits it to the kids, and wants them to pay money. And I sent tons of documentation back, and they pretty much haven’t gotten around to responding, but sent the next letter in the schedule.
It is always annoying working with the IRS.
Opinions posted on Free Republic are those of the individual
posters and do not necessarily represent the opinion of Free Republic or its
management. All materials posted herein are protected by copyright law and the
exemption for fair use of copyrighted works.
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson