IRS Facts You Never Knew

Physician's Money Digest, April30 2003, Volume 10, Issue 8

Lower YourTaxes—Big Time!

The following are someinteresting and frighteningfacts on the IRS provided bySandy Botkin, a former IRSattorney, author of (McGraw-Hill; 2003), and CEO of the TaxReduction Institute (www.taxreductioninstitute.com):

  • Your return is scanned andchecked for math errors at the local servicecenters. It's then sent to the centerin Martinsburg, WVa, where it's given ascore using a computer program knownas the Discriminant Function Systems.The higher the score, the better thechance that it will be examined immediatelyfor problems.
  • The IRS pays a 10% commission forpeople to rat on others.
  • The IRS audits approximately 68%of all final returns.
  • IRS special agents are promotedbased on indictments.
  • Both revenue agents and taxauditors get promoted based on thenumber of cases closed and not on themoney collected.
  • There's no privilege protecting yourcommunications with your accountant.
  • The IRS manual states that,"Hasty agreement to adjustments andundue concern about immediate closingof the case may indicatethat more thorough examinationis needed."
  • Make sure your returnlooks professional and completeso that it won't stand outfor any reason.
  • People who do theirown taxes increase their chances of anaudit because the IRS perceives thatthey don't know as much as a professionalaccountant.
  • Have a CPA, enrolled agent, orattorney prepare or review your taxreturns to help minimize the chancesof an audit.
  • It's true—the IRS does want youto be intimidated.
  • The taxpayer service representativesanswered 6 of 27 yes/no IRS questionscorrectly, according to a recentsurvey. They are not to be trusted.
  • The IRS is not bound by theanswers provided by their taxpayerservice representatives.
  • IRS tax auditors are generally toldwhat to audit, how to audit, and almostwhat to think.
  • Only about 1% of the nation'stax revenue is obtained through audits;98% of the revenue is obtainedthrough "voluntary" compliance frompeople who have not been audited.