Accountants: IRS is cracking down; audits on the rise

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SALT LAKE CITY -- Some tax professionals say the IRS has gotten more aggressive about enforcing tax rules. Not all tax preparers are saying they notice that, but those who do claim audits are more common and that it's harder to negotiate penalties.

90 percent of the 1.4 million audits by the IRS in 2009 where of individuals who make less than $200,000 a year.

Certified Public Accountant Dave Tucker says it was normal for a dialogue with the IRS. But these days, he says the agency is unrelenting when it comes to collecting penalties.

Red flags for the IRS
These items can increase your chances of being audited:
  • Large Charitable Deductions
  • Large Business Expenses
  • Inaccurate W-2 or 1099 Reporting
  • Excessive Itemized Deductions
  • Concealment of Cash Receipts
  • Tax-Shelter Losses
  • Informant
  • Prior Tax Problems or Audits
  • Complex Business Transactions
  • Complex Investment Transactions

"They seem to be trying to raise revenue through penalties," Tucker says."

According to him, the agency is simply getting more aggressive about collecting money. It can create anxiety for taxpayers when there is no negotiation, and a resolution can take months or years.

"No matter what they say, it's obvious. Their attitude is now, ‘We're not going to budge until we have to,'" Tucker says.

But according to an IRS spokesman, there is no aggressive attitude taking over.

"People should report correctly and truthfully on their return, and not think they can defraud the federal government. You truly don't want to play roulette with the Internal Revenue Service, because there will be some serious repercussions," says IRS spokesman Bill Brunson.

How to be prepared for an IRS audit
  • Maintain at least three years' worth of tax returns and records
  • Keep your checkbook stubs
  • Retain and categorize your receipts from all purchases throughout the year
  • Track cost basis for property and taxable investments
  • File all your bills in organized folders
  • Journal your deductible items as they occur

KSL News spoke with several tax preparers Friday. Not all of them notice a difference, but one who specializes in resolving conflicts with the IRS backs Tucker up.

In particular, that tax preparer says the IRS is reluctant to let penalties slide for individuals who file late, or corporate payroll tax violators. He also says the agency has added more revenue officers -- the people who enforce tax code in the field.

The agency will confirm it's cracking down in various ways, but mostly on tax cheaters. For the average taxpayer, it might be good advice to just be honest and on time so you don't spark an audit at all.


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Richard Piatt


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