Mailed tax return in October, still no refund

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The real issue here is that the millionaires and billionaires hire professional accountants that do things by the book, so there’s nothing for an audit to find.

No one wants to admit that there is only one area where more money spent on enforcement will generate more revenue - regular taxpayers who regularly take liberties with household status, dependants, home office deductions, and the earned income credit.

Basically, this is what the Democrats wanted when they passed this bill. Even if they [allegedly] didnt understand that this was what they were wanting.

Instead of ad-hominem rhetoric, address the issues raised in the article

Here’s what the article says:

On Wednesday, Syracuse University’s Transactional Records Access Clearinghouse (TRAC) released data provided to it by the Internal Revenue Service (IRS) on audits performed by the agency in fiscal year 2022. Despite the infusion of new funding earmarked for the IRS via last year’s Inflation Reduction Act, the agency continued historic trends of hassling primarily low-income taxpayers, with relatively few millionaires and billionaires getting caught up in the audit sweep.

“The taxpayer class with unbelievably high audit rates—five and a half times virtually everyone else—were low-income wage-earners taking the earned income tax credit,” reported TRAC, noting that the poorest taxpayers are “easy marks in an era when IRS increasingly relies upon correspondence audits yet doesn’t have the resources to assist taxpayers or answer their questions.”

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But then the very next paragraph states that “millionaires” have a 1.1% audit rate verses the lowest income persons at 1.27%. Not exactly “five and a half times”…

the agency continued historic trends of hassling primarily low-income taxpayers, with relatively few millionaires and billionaires getting caught up in the audit sweep.

This is baseless rabblerousing. Nothing more, nothing less. With thousands of low-income taxpayers for every million/billionaire, of course there is going to be relatively few.

Besides, the irony here is that those evil millionaires can often be part of that lowest income group. Having millions doesnt mean you earn millions each year. I’m pretty sure that was the basis of the outrage prompting this additional funding to begin with - rich people with low/no taxable income. So if you want to target them, it’s going to show up in the “low income” audit counts anyways! :slight_smile:

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Unlike @slappycakes at least you read the article and are addressing its points. Too bad you got it wrong.

There are many ways to define the rate. The article seems to define it as a number of audits per year. It seems a reasonable definition to me. Just because you disagree with that does not make it baseless.

If I recall correctly, the bottom 50% of income do not pay income tax. The fraction of millionaires who report low gross income is probably very low. More of them report low income after deductions. Those are the taxpayers that the article says should be examined instead of low income taxpayers who file just to get the earned income credit.

Either it’s the number of audits per XXX people, in which case 1.27% is not fave and a half times more than 1.1%. Or it’s the raw number of audits, in which case there are hundreds of low income tax returns for every millionaire’s tax return, in which case 5.5x more would be miniscule and far less than expected. Not sure how else you can define it to give it a valid base?

Many (most?) of that 50% actually make money when filing their tax return. Given the inherent purpose of taxation, that should be what stands out as an issue needing addressed.

And as I said, those millionaires pay professionals to prepare their taxes, who do it by the book. Any funky stuff with their taxes usually goes hand-in-hand with criminal and other non-tax related ‘issues’. There’s [relatively] rarely anything for an auditor to find.

The article also seems to lament the lack of funding directed towards resources to help taxpayers and answer their questions. Be it before or after filing their returns, these audits are helping those people get their returns correct. I’d say that audits over education is much better for such taxpayers - educate them, and they’ll all be expected to do their returns properly (paying more); audit them, and only those who get audited will be stuck paying the higher tax bill. Or, as previously noted, receive less of a windfall as it may be.

Now this applies to me. For a bunch of boring reasons*, I ended up having to do my (late) 2021 returns by hand and mailed them from a hotel in Chicago on Dec 5. It’s a month later and irs site has no record of receiving them. Are these sort of delays common? First year filing handwritten since I was a teenager, lol. Zero tax owed, but I imagine I’ll get hit after the fact with a late filing penalty.

*. IMac too old to run TurboTax software. Won’t update.
** Online TurboTax already moved on to 2022.
*** Desperate to get something in so it doesn’t mess up my ACA plans.

I mailed my paper return in early March, the IRS didnt have a record of it until late July.

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Are they just sitting in a pile until some poor sob has to open it and manually enter all the info?

Wow! Okay. I tried to look up some of your posts to see what you found acceptable as a reference. Oddly, I couldn’t find one.

I’m not familiar with reason.com, but pulled up a list of their headlines to see if they were some kind of clickbait scam site. It didn’t look like it to me. but who am I to judge. There are obviously much smarter people here.

Although you obviously didn’t bother to read the article, the first paragraph links to their source data. I hope you find a non-religious, non-military, mainly female, highly integrated (race wise) university to be an acceptable source. Sadly, they are mainly liberal, but I suspect that’s okay with you. Please note the headline, as compared to the unacceptable source that I originally quoted.

https://trac.syr.edu/reports/706/

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For the most part, that’s correct. However, the higher into the stratosphere one goes, the more complex (and/or twisted) the returns become. It’s widely believed (possibly accepted) that the IRS does not have the capabilities to deal with the returns of billionaires and multi-millionaires. The IRS, a mighty powerful agency against the little guy, is less intimidating to multi-millionaires.

I think the key word in your quote of the article was “virtually”. The vast majority of returns, 130+ million, had an audit rate of .19%. The EITC claimers’ rate of 1.27% is more like six and a half times the rate of those 130+ million filers.

They were only counting returns with more than a million in income, not assets.

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Trumps return supposedly had 400+ pass through entities on it, probably each with their own voluminous set of returns and books. And I think a single senior agent to handle the audit.

On the other hand, people with negative income tax liability through the EITC have simple returns and their returns can largely be audited electronically by the thousands. I also heard there’s a lot of fraud in those low income returns due to the refundable credit, but I could also be hearing about the fraud because they’re auditing them more, lol.

I also doubt these “audits” of eitc claimers are happening in person across a table. Probably via letter or CP-2000 or whatever.

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the poorest taxpayers are “easy marks in an era when IRS increasingly relies upon correspondence audits

Combined with the fact millionaires contest audit findings, forcing the IRS to prove in tax court that there is additional tax due before collecting anything. Low income people can’t afford to fight it, with that cost often being more than the tax due.

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I’ve been filing 15-25 1040s a year for over a decade as a side job, I’m a CPA, and I worked for a time in a firm with half their business being taxes.

Part of the problem with all this talk about audits is the definition of the word audit. If anything sent from the IRS to a taxpayer after the tax return is due (whether they filed or not) is considered an audit, then yes, low earners get the audited the most. But sometimes, especially for the EITC, the IRS just asks for some proof that the person really had that income.

As you can imagine, the easiest way to make money with the EITC is to be a sole proprietor claiming whatever you want to as income. If you get paid and get a W-2, the IRS has a record of what you made, so you need to file the correct numbers. The computer will catch it if you don’t and the letter you get has nothing to do with how much or how little you make, just that you got it wrong. But if you don’t get a W-2, the IRS has to do something in order to verify all these “in home salons/day care/lawn care businesses” that single mothers run out of their home that always make under the threshold to qualify for the EITC, but make enough that they will get a nice “refund” check. My only EITC client got “audited” one year. All the audit consisted of was asking for some actual documents showing how much she made and who paid her. The funny thing about that audit was that every expense that she had for her business that she didn’t claim INCREASED her EITC. The IRS only audited her revenue. If they had a way to say, “we know you spent several thousand bucks on supplies that you didn’t claim,” and they somehow had a way to force her to prove she spent almost nothing (because she claimed nothing), they would have really screwed her.

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Good point. These are asset rich folks that conceal/mask income. Eg. Donald Duck "borrow, deduct, die. On the other hand EITC is abused as well. Rest of us schmucks have to pay… on time or else!

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Except they dont. Most often they are following the rules. When the rules result in little/no taxable income, an unlimited force of auditors would still not change anything.

The millionaires truly cheating on their taxes are often also “cheating” in other aspects of life/business. Taxes are usually just the easiest path to ensure they’re punished for something.

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unless some of them influence Congress to make those rules or even get elected President.

So I agree with you there are two types of “cheaters” the outright ones you mentioned or those who can change the rules of the games to meet their interest. Most salaried folks like myself get a pittance of deductions vs these guys don’t even to have “show” income.

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Too bad it’s mostly symbolic. Passing it wont mean anything since it’ll die in the Senate.

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