Guess my chances of being audited are low this year.

ZuZu: My business got audited in 2009.

I got audited at 16. Random thing. Babysitting, lawnmowing, and a summer's worth of lifeguarding at the HOA pool. It was fairly frightening; I realized there was very little they could do to me, but knowing that I could drag people whose lawns I mowed into an audit was nerve-wracking.

ZuZu: When all was said and done we asked the auditor why we were selected for audit in case we made some glaring errors so we could be more careful next time. She told us that she was a new agent and we were just randomly selected as a training exercise for her. That "training exercise" cost my business thousands of dollars in accountant, bookkeeper and lawyer fees because of all the documentation the IRS demanded.

Two years later I still get pissed off thinking about it.

Tax returns are all thrown into a computer, coded under industry types, deduction types, etc. The system then does some variable calculations on the likelihood of fraudulent behaviour by comparing your returns to previous ones, other returns in similar industries, etc. In Aust our tax authority flags about 5% of entities a year; not sure what the number would be in the US. Of that, about 4.9999% are quickly checked and passed as fine. There is a small portion that are then manually checked.

Whether you were selected for training, checks for fraudulent transactions, whatever, they are still entitled to check your books. Any business operator expects to get audited and the costs can easily be mitigated by keeping solid records. Next time I suggest getting yourself some audit insurance. Costs jack all and covers you for the costs of random audit.

Personally, I never understood the whole fear of the audit. If you aren't doing anything dodgy and are following taxation laws then the absolute worst they can do is refuse a deduction and make you pay it back.

Also, "thousands of dollars" would be what any business, large or small, pays an accounting firm every year just to sign off their books. So you are basically pissed off that they were doing their job and that you got selected?

IRS Is will be? Someone crossed their eyes when they dotted they're tees.

As someone who filled out a Schedule A, I'm getting a kick...

I can substantiate all my deductions and credits as I kept the receipts and bank statements that back up what I put on my 1040.

snuff3r: Personally, I never understood the whole fear of the audit. If you aren't doing anything dodgy and are following taxation laws then the absolute worst they can do is refuse a deduction and make you pay it back.

Business usually aren't afraid of audits because they can hire the accountants and lawyers to keep the IRS at bay.

Individuals on the other hand get nervous when they see a letter from the IRS as what most people know about taxes is what TurboTax or HR Block tells them when they fill out their forms. The IRS has the power to completely turn your life inside out. They are the agency that put Al Capone away.

dickfreckle: Because, you know, your taxes went sky high when he took office.

Taxes have been at historical lows for the past decade.... which is one reason why the deficit has been sky high.

\some of the major tax loopholes should be closed

Free_Chilly_Willy: Flat Tax, Completely repeal the current tax code and defund the IRS to the point where they can only collect taxes from said flat tax.

And in the process, change the income tax from a progressive tax to a regressive tax.

Flat tax = FAIL

The admin hired 16.000 new IRS agents. So, yeah be careful.

Anastacya: When I was 18, I had asked my father for $100 to buy books for college. Aside from the child support that my mother received, I never asked him for anything before. Being 18, the child support had stopped, and I figured using it for books for school (which I was going to do) would result in me getting the cash that I needed.

He said no.

This pissed me off. However, I let it go. I sold some of my older toys to get the money for school and time went on. Then, the letter came. It was around Christmas:

"Anastacya, we're going to claim you as a dependent on our tax return". I hadn't received a dime from my father since I turned 18, and surely not the 50% (or whatever it is) requirement for my income from him to be claimed as a dependent.

So I called the IRS and played the dumb female part: told them my story. The lady asked me if I had any information about him so they could look into it. Well, since I was a military brat, I knew his social security number (needed it for medical). I gave it to the IRS.

I found out a few years ago that he was audited. Served him right, greedy farker

Too bad you didn't get a finder's fee for turning his ass in. That would have been icing on the cake.

SaintAnky: Anastacya: When I was 18, I had asked my father for $100 to buy books for college. Aside from the child support that my mother received, I never asked him for anything before. Being 18, the child support had stopped, and I figured using it for books for school (which I was going to do) would result in me getting the cash that I needed.

He said no.

This pissed me off. However, I let it go. I sold some of my older toys to get the money for school and time went on. Then, the letter came. It was around Christmas:

"Anastacya, we're going to claim you as a dependent on our tax return". I hadn't received a dime from my father since I turned 18, and surely not the 50% (or whatever it is) requirement for my income from him to be claimed as a dependent.

So I called the IRS and played the dumb female part: told them my story. The lady asked me if I had any information about him so they could look into it. Well, since I was a military brat, I knew his social security number (needed it for medical). I gave it to the IRS.

I found out a few years ago that he was audited. Served him right, greedy farker.

Ugh, a similar thing happened to me when my wife and I got married. When she mentioned to her psycho mother that we were doing our first joint returns mom got pissed. Apparently her mother felt that since she had not been married the whole year that SHE was entitled to claim my wife as a dependent on her tax return. Furthermore, I was supposed to claim all my wife's income as my own so I would pay the taxes on it and greedy mother in law would get the deduction.

They wonder why we always live over a days drive from them and refuse to consider jobs in their area.

It would have been hilarious if she did try to claim your wife as a dependent as your filing status is based on your martial status on the last day of the year.

The IRS would have been happy to invite your MIL to their office for a little chat.

Large corporations that outsource?

BWAHAHAHAHA! Sorry.

Anastacya: "Anastacya, we're going to claim you as a dependent on our tax return". I hadn't received a dime from my father since I turned 18, and surely not the 50% (or whatever it is) requirement for my income from him to be claimed as a dependent.

My dad did something similar, but they hadn't given me a dime since I was kicked out of the house whilst I was in high school. They had even gone out of their way to make sure that I was taken off my dad's medical plan. My parents were pissed when they found out I was married.