Quote:
Originally posted by sebastian_dangerfield
I'd never lie on my taxes, but I'm certainly not going to look really closely to make sure uncle sam gets every nickel he wants. If I miss something, it'll be something I owe, not something I'm owed, but it'll be small enough that no one would give a shit anyway.
I have a friend with a business who basically just lies on his taxes year in year out. He claims as long as he steals only 20k or so a year, no one will ever bother. Is there a cut off like the SEC stuff (won't look at you for insider info unless you have really large suspicious trades or a part of a huge wave of sudden suspicious trades)?
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The IRS looks at national averages on deduction and credit categories for income brackets, and they also have a list of transactions or tax items for which a flag is raised. The audit lottery is basically a result of their being too few revenue agents to examine returns, so they tend to go for the ones that look like they'll raise the greatest deficiency relative to reported income.
Of course, none of that applies if the revenue agent comes in to work pissed off and ready to fuck somebody up and they just happen to grab your return out the stack.
One thing that works in everybody's favor is the end of an old program called the Taxpayer Compliance Study. Under that program, phased out in the early 90's, the IRS regularly pulled several hundred returns a year at random, and called the taxpayers in to audit their returns line by line, just to figure out where everybody was fudging it. God help the bastard who got called in on one of those.
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