How To Tell If The IRS Is Eyeing You - Spokane, North Idaho News & Weather KHQ.com

How To Tell If The IRS Is Eyeing You

NBCNEWS.COM - You consider yourself a law abiding citizen, and you are not starting a nonprofit organization with conservative ties.

Even so, you may be a candidate for a tax audit—and you may have no clue what you have done to warrant the attention of the IRS.

The nation's tax collectors have long made it a practice to look for discrepancies, omissions and suspicious activity to uncover tax evasion and fraud. And lately, the IRS has expanded its monitoring to include social media.

The agency now keeps an eye out for online discussions about nonpayment or underpayment of taxes, and even sale prices of goods on sites like eBay that don't match what taxpayers report.

In a world where companies like Amazon can keep tabs on consumers' online activities, the shift by the IRS is reasonable, says Edward Zelinsky, a law professor at Cardozo Law School. "This was always known to people in the tax community that the IRS, like everybody else in the 21st century, was monitoring online."

But Zelinsky is just one expert concerned about the lack of transparency around the IRS' practices. The agency "is so secretive about what is going on that that really erodes public confidence," he said.

According to IRS data, taxpayers making $1 million or more are more than 12 times more likely than the rest of the population to be examined. In 2010, about one in 100 Americans were audited. The IRS audited 3.8 percent of returns for those making $200,000 or higher, versus 12.5 percent of returns for those making $1 million or more.

As for the online monitoring, Zelinsky says it may be simply the application of new tools to old agency search standards. So while he is deeply frustrated by the IRS' lack of transparency, he added, "If they are using social media to find cash based businesses, or looking for phony medical deductions or the other hot buttons, then I would applaud that."

There is no surefire way to prevent an audit. But experts say one practice definitely improves your odds: Don't do what the IRS does. Be open. About everything.

The agency declined to comment about this story.

The American Civil Liberties Union has also expressed qualms about IRS secrecy. That group filed a Freedom of Information Act request for documents explaining whether the IRS always obtains search warrants to read email and other electronic communications. "Unfortunately, while the documents we have obtained do not answer this question point blank, they suggest otherwise," wrote Nathan Freed Wessler, a staff attorney at the ACLU.

So how can you know if you are under scrutiny? You can't know exactly, but some moves are more likely than others to attract attention.

Noncash deductions are a prime example, according to several tax experts. If you donate a car to the American Lung Association, or a large quantity of clothing to the Salvation Army, make sure that the deduction you take is reasonable, and that you can document how you came to that amount.

Taxpayers who are self employed often appear to face more scrutiny as well. "If you are in business for yourself, or you work for someone who is, know that the IRS is watching," Frederick W. Dailey III, a tax lawyer and the author of "Stand Up to the IRS," said on his website.

The IRS also keeps an eye out for cash-based businesses, and for mismatches between what others file about you and what you file. For example, if you neglect to include a payment for some freelance work during the year, and the payer reports that as a business expense, you are likely to get some scrutiny. This would also hold true if you neglect to report gains from an investment account, and the investment firm reports them.

Wealthier taxpayers seem to be more likely to get chosen for audit, perhaps because that gives the IRS a greater chance to recover significant sums. (Every year the government collects only about 83 percent of what it is owed, a gap of several hundred billion dollars at a time when the budget deficit is a flashpoint.)

  • Most Popular StoriesMost Popular StoriesMore>>

  • New York State illegally moving convicted sex offenders from prisons into group homes with the developmentally disabled

    New York State illegally moving convicted sex offenders from prisons into group homes with the developmentally disabled

    Thursday, September 20 2018 9:14 AM EDT2018-09-20 13:14:31 GMT
    Three State agencies are involved in placing convicted sex offenders in group homes or hiding this information from the families and the general public>>
    Three State agencies are involved in placing convicted sex offenders in group homes or hiding this information from the families and the general public>>
  • DVR cuts ties with contractor, leaving hundreds of disabled people hanging in Spokane

    DVR cuts ties with contractor, leaving hundreds of disabled people hanging in Spokane

    Saturday, September 22 2018 1:30 AM EDT2018-09-22 05:30:53 GMT

    SPOKANE, Wash. - The State Department of Vocational Rehabilitation (DVR) is a life-changing resource for hundreds of disabled people in Spokane. Finding them jobs, counseling and places to live. A big part of the agency's mission is at a standstill after DVR cut ties with one of it's major contractors without warning. For twenty-seven years, Compass has been a one-stop shop for launching disabled and disadvantaged residents on a path to a better, independent life. 

    >>

    SPOKANE, Wash. - The State Department of Vocational Rehabilitation (DVR) is a life-changing resource for hundreds of disabled people in Spokane. Finding them jobs, counseling and places to live. A big part of the agency's mission is at a standstill after DVR cut ties with one of it's major contractors without warning. For twenty-seven years, Compass has been a one-stop shop for launching disabled and disadvantaged residents on a path to a better, independent life. 

    >>
  • Coeur d'Alene woman's quick thinking saves her from identity theft

    Coeur d'Alene woman's quick thinking saves her from identity theft

    Friday, September 21 2018 10:12 PM EDT2018-09-22 02:12:34 GMT

    COEUR D'ALENE, Idaho - Surveillance video obtained by KHQ from the McDonald’s in Spokane Valley shows an alleged thief who Krystalynn Tekancic says broke into her home while she was moving. "We're pretty sure that the person who broke in my house while I was home and they took my laptop and my phone and a few personal items,” Tekancic said.

    >>

    COEUR D'ALENE, Idaho - Surveillance video obtained by KHQ from the McDonald’s in Spokane Valley shows an alleged thief who Krystalynn Tekancic says broke into her home while she was moving. "We're pretty sure that the person who broke in my house while I was home and they took my laptop and my phone and a few personal items,” Tekancic said.

    >>
HD DOPPLER 6i
/
  • National NewsMore>>

  • California man arrested in 10 'horrific' cold-case rapes

    California man arrested in 10 'horrific' cold-case rapes

    Saturday, September 22 2018 1:20 AM EDT2018-09-22 05:20:28 GMT

    SACRAMENTO, Calif. (AP) - Sacramento police have arrested a married 58-year-old man in connection with at least 10 rapes across Northern California between 1991 and 2006. Sacramento police say they arrested Roy Charles Waller of Benicia on Thursday in the NorCal Rapist case. He was arrested at the University of California in Berkeley, where he worked as a safety specialist in the office of environment, health and safety.   

    >>

    SACRAMENTO, Calif. (AP) - Sacramento police have arrested a married 58-year-old man in connection with at least 10 rapes across Northern California between 1991 and 2006. Sacramento police say they arrested Roy Charles Waller of Benicia on Thursday in the NorCal Rapist case. He was arrested at the University of California in Berkeley, where he worked as a safety specialist in the office of environment, health and safety.   

    >>
  • Ford granted another day to consider testifying

    Ford granted another day to consider testifying

    Saturday, September 22 2018 12:59 AM EDT2018-09-22 04:59:22 GMT

    WASHINGTON (AP) - The Senate Judiciary Committee is giving Christine Blasey Ford more time to decide on the terms for her to testify about allegations that Supreme Court nominee Brett Kavanaugh sexually assaulted her at a party when they were teens. That's according to a late-night tweet from Chairman Chuck Grassley of Iowa. Grassley said he "just granted another extension" to Ford.

    >>

    WASHINGTON (AP) - The Senate Judiciary Committee is giving Christine Blasey Ford more time to decide on the terms for her to testify about allegations that Supreme Court nominee Brett Kavanaugh sexually assaulted her at a party when they were teens. That's according to a late-night tweet from Chairman Chuck Grassley of Iowa. Grassley said he "just granted another extension" to Ford.

    >>
  • Man sentenced for bat attack on Special Olympics athlete

    Man sentenced for bat attack on Special Olympics athlete

    Saturday, September 22 2018 12:50 AM EDT2018-09-22 04:50:57 GMT

    MISSOULA, Mont. (AP) - A Missoula man who attacked a Special Olympics athlete with a baseball bat, causing a severe head injury, has been sentenced to 20 years in prison with eight years suspended. KTMF-TV reports Paul Ekstedt was sentenced Friday for the June 14 attack on Gary Fuller.   

    >>

    MISSOULA, Mont. (AP) - A Missoula man who attacked a Special Olympics athlete with a baseball bat, causing a severe head injury, has been sentenced to 20 years in prison with eight years suspended. KTMF-TV reports Paul Ekstedt was sentenced Friday for the June 14 attack on Gary Fuller.   

    >>