Tax audit, the mere thought of the phrase can bring shivers in your body if you are united sates citizen. The internal revenue service organization has a very specific and systematic process of picking up faulty individuals for tax audit called the IRS personal income tax audit. These audits are just routine check ups for the internal revenue service, but if ask about these audits to general public the reactions may vary from individual to individual. Those who pay their tax do not have any fear of these audits and on the other hand those who do not pay their tax on time have to fear it a lot.
The most common type of audits among the IRS personal income tax audit list is the line check audit. This audit is made for the simple purpose of checking the taxpayer acquiescence in tax filing, reporting and finally making payments. In the year 1988 the IRS audited a record 54,000 returns on a line-by-line basis under its taxpayer fulfillment organization program. The different thing about this program was that the Tax advisers were not allowed to represent taxpayers audited under the program. This action taken by the internal revenue service was criticized a lot by many taxpayers and practitioners as they called it a process of draconian.
There are other types of IRS personal income tax audit like the correspondence audit. This audit is slightly different from the line check audit as it takes into account selected items or information by mail with no personal appearance required. Those individuals who are short listed from this audit are examined just to see that information in documents and the various forms provided by them matches the desired status and finally if they clear the audit they will require no taxpayer contact.
But the major question arises who will decide the list of the individuals’ needed to be audited and who are cleared from this audit thing. The internal revenue service is a really intelligent organization which is being run by some of the best minds in the country. If you are someone who has filed his or her tax honestly and without any time delay then the chances of IRS picking you for audit are very less. You must be aware of the fact that the Internal Revenue Service is a very big organization. There are about a hundred million tax returns filed every year in the IRS. It does not have the essential employees to audit each and every tax return and you cannot blame the organization for that. There is not even a single country on the globe that can produce so many audits every year as the IRS does but still the amount is very less compared to the amount of tax payers in the country. On an average the service audits only about 2 percent of tax payers of the country and the rest 98 percent remain free to do tax evasion and loot the country and its resources. They understand that the actual chances of them being audited by the IRS are very near to the ground except they themselves commit certain bizarre mistakes to get into the eye of the service and finally attract their attention by committing blunders.
But the internal revenue service keeps on inculcating new weapons to its armory. Recently the IRS has developed software that can pick up the tax defaulters which are needed to be audited by the service. The software keeps into account various factors like the amount of deduction which is shown by the tax payer and the soft ware also has the ability to filter suspect filers from the clean ones. It also filters out filers who have claimed a surplus of deductions, have shown losses for consecutive years and show spending uneven to the size of their business. Thus you can be assured that if you are spending more than what you earn, the IRS will catch you and put you under the IRS personal income tax audit. Thus if you are some with more than 20 percent of total gross salary as charitable deductions then your chances of IRS audit are really high.
It has been a decade that the IRS personal income tax audit has been under the criticism of the general public. The decisions made by the internal revenue service and the choices of audit have been under the hammer. It has been said that the audit is making the rich richer and poor poorer. The general public still is unaware of the exact definition of the IRS personal income tax audit. Thus it is high time that government should take evasive actions against those who wrongly audit clean tax payers and do not audit the culprits.
