Page 23 - november 2021

WHO IS MORE LIKELY IRS staff is that we are extremely short staffed.
Budget cuts have crippled the IRS over the years.
TO BE AUDITED, Enforcement staff has also dropped significantly
after pandemic. Biden plans to collect lots of
RICH OR POOR? revenue from audits which means your likeliness
of audit might double or triple. If you have filed
tax, it’s very important to save receipts for at least
3 years. Home office and EIC is one of the mostly
audited items by IRS.
IRS computers choose people to audit, but if those
There is not really
published research taxpayers respond, a physical person must review
verifying the claim the documents. With fewer employees to do that,
of a clear distinction delays have mounted by leaps and bounds. This
whether IRS audits year many taxpayers have complained that refunds
rich or poor more? are taking more than a year to be funded. In the
Whether you make days to come more and more taxpayers are likely to
less than 25K a year be audited. Problems like tax evasion and wrongful
and claim earned business deduction could be a heavy penalty
income credit or, you item in the coming days. Biden policy might also
make million dollar of examine households with income above $1 million
income your likeliness at much higher rates because he has planned to
of audit could be the same because IRS audits are collect huge money from tax audits.
mostly random. Our tax firm gets audit clients left Since the 1990s, Congress have claimed that
and left for various reason and it’s not necessarily improper payments as a major problem among
because they make too much income. Government taxpayers. Congress has been emphasizing IRS to
frequently runs anti-poverty programs, distributing hold suspicious refunds and take adequate time to
billions of dollars to people who are struggling research detail documents to avoid misstatements
for their end’s meat. If you happen to be the one of income. For IRS, stopping faulty refunds from
audited, you end up waiting fort IRS for endless going out, rather than trying to recoup them
time. Today due to employment shortage they don’t through an audit is always the better option but
have many resources and they will not back you up to struggling taxpayer it could be a nightmare
if your interest penalties pile up to the roof. waiting for endless time for IRS response. Dealing
with IRS will never be easy for whatever reason it
When IRS notifies you that you are being audited,
they generally ask for supporting documentation might be. But I would say, it is better than to be
that includes every involved document for last 2- 3 mentally prepared if IRS audits you. At the end,
years. They ask for W-2s, 1099, paycheck stubs, my suggestion is to always prepare your tax with
bank statements, birth certificates, medical records, experts who knows what they are doing. Doing tax
day care expenses, home office receipt etc. After with software and mediocre firm could save you
providing everything, you would think you would money in short run but end up hurting you in the
get quick resolution, but you will end up waiting later years.
months and months for IRS response. IRS notice Diwas Dhungel,
and audits can be very stressful and frustrating. The Senior Director
worst part is the wait not knowing when you will get Perfect Tax & Finance
ultimate resolution.
The common answer you will hear calling

30 MINUTES FREE
FREE CONSULTATION 3 MONTHS
Must present coupon at the time with FREE GIFT worth Must present coupon at the time
of appointment. Not valid with $150-$500. Min 250 K on W2 of appointment. Not valid with Bookkeeping and Payroll when
anyother offer. anyother offer.
Offer expires 30 SEPTEMBER 2021 income or 50K of business Offer expires 30 SEPTEMBER 2021 you sign 1 year of recurring
Conditions Apply income required. Conditions Apply services
DesiPages DFW | November 2021 VOL 33 | 23