quote:

You’ll also need to decide how to deal with your error. Frank Agostino, a former IRS senior trial attorney now in private practice, has advice on this score that may seem surprising: Often the best approach is not to correct past mistakes, but instead to stop making them in the future.

“If the IRS hasn’t found you for a long time, the odds are they won’t. But correcting a past error can bring unwelcome attention, so I often tell people just to correct things going forward,” he says.

Frank Agostino is right. Let sleeping dogs lie.

But... it illustrates how broken and intrusive our tax system has become.

Half of the people in this country file a tax return, and half don't. (if someone wants they can research the exact numbers, but it's not possible to know who all of the non-filers are since we don't know who all the people are... )

Furthermore, a large percentage of tax returns are from people who have no tax liability but claim "refundable credits". It's a form of welfare. An unknown percentage of those returns are fraudulently filed, and an unknown percentage of those returns that are fraudulently filed actually receive bogus checks from the government.

The compliance costs for all of this is a huge burden on the productive economy.

Two words: Fair Tax

quote:

Originally posted by mark123:
If they're going to do my taxes for me and charge me what they say, why don't they just do my taxes and send me a bill every year??????

Because your filling out and signing a return shifts the burden of proof from them to you.

All in favor of totally abolishing the income tax and replacing it with a consumption tax, please raise your hands.

quote:

Because your filling out and signing a return shifts the burden of proof from them to you.

And because it maintains the illusion of "voluntary compliance".

quote:

Originally posted by V-Tail:
All in favor of totally abolishing the income tax and replacing it with a consumption tax, please raise your hands.

Yes!

But any change needs nuclear suicide provisions to prevent changes or additions in the future.

Two years ago the CPA firm I use electronically filed a tax return for a family trust I manage. I followed the instructions for making payment electronically before the due date. Surprise! A month later the IRS sent me a letter stating I did not pay the taxes due. I called an 800 number at 9PM on a Friday in hopes of getting someone to answer. Luckily, I did. Initially, the IRS representative asserted I had not paid. I then laid out the facts: the IRS had electronically assessed my checking account at a financial institution on a specific date and withdraw a specific sum (the amount owed)--well before the due date. Said representative went into three different IRS databases before she confirmed that I had paid the IRS on time. Eventually I received a letter to say I had paid what I owed. Just unbelievable! BTW, no apologies nor otherwise admitting their mistake. In speaking to others, this is not as uncommon as one might assume.

It appears the IRS can do whatever they wish.

When my state sent a letter saying I owed more taxes, penalty, and interest, I called wanting to know what had been done wrong by Turbotax. They said there's a cash deduction limit in Iowa and it was over that limit in my return. When I asked details about the tax rule Turbotax missed, they responded by saying I could pay the amount owed now or they could perhaps start reviewing all my past returns to see what they could find in them. The implied threat was quite clear so the money was sent that day.

quote:

In speaking to others, this is not as uncommon as one might assume.
*****
It appears the IRS can do whatever they wish.

All those additional billions to the IRS for "enforcement"... and they say they aren't coming after the middle class, anyone under 400K in income. But it's a complete lie.

The super-rich can afford a team of CPA's and tax lawyers to litigate.
The middle class can be intimidated.

quote:

All those additional billions to the IRS for "enforcement"... and they say they aren't coming after the middle class, anyone under 400K in income

^^^^^^^^^^^^^^^
Like 400k is a lot of money. When you start taking the RMD{Required minimum distribution} from your retirement account it gets there quick, particularly if you have invested well.

quote:

Originally posted by ZSMICHAEL:

Like 400k is a lot of money. When you start taking the RMD{Required minimum distribution} from your retirement account it gets there quick, particularly if you have invested well.

Or sell a home which has appreciated due to inflation.