The earned income tax credit (EITC) is supposed to help people with low income, especially those with children, by providing a refundable tax credit. In recent years, however, the IRS has stepped up audits of returns that claim the EITC, after critics contended that the credit was awarded too freely. […]
Category: Audits
Audits by the taxman are scary things. No Texas business or resident likes the idea of facing off with the IRS. However, what readers may be surprised to learn is that the IRS doesn’t much care for audits, either. Its own studies reveal that audits are time consuming for the agency […]
“Follow the money” is a well-worn cliché of political life. Of course, tax collection isn’t supposed to be political. But is the IRS evenhanded when it comes to deciding which tax returns get audited? In this post, we will explore that question. Recent data from the IRS itself suggests that […]
David Bowie’s recent death has revived interest in his work, including the classic song “Changes.” “Ch-ch-ch-ch-changes / (Turn and face the strange),” the Thin White Duke crooned in 1971. He wasn’t singing about tax law, but U.S. taxpayers certainly face plenty of tax law changes every year. In this post, […]
In the first part of this post, we noted the function of the W-2 form for reporting income from wages. With tax filing season now underway, now is the time to look for this form from your employer, if you have employee status. If you do not have employee status, […]
It is of course important to keep good records for tax compliance purposes. But what kinds of records should you keep and for how long? In this post, we will provide some basic answers to these questions. Last spring, we discussed the time limits that apply to tax audits. As […]
Nobody wants to be audited by the IRS, but most taxpayers have had nightmares of an agent showing up at their door, asking a lot of questions about their tax returns. While it is natural to worry about an audit, the reality is that audits are increasingly rare. As CBS News […]
In the first part of this post, we posed the question of how far the IRS can go back into your past when conducting tax audits. As we noted, the IRS by no means has a blank check to do this. Generally the limitation is three years, or up to […]
Tax Day has come and gone, and usually comes the time of the year when people start to worry about their taxes potentially being flagged by the Internal revenue Service. An audit is possible, though the likelihood of such a reality is very low. Still, it is good to be […]
“Don’t look back” is a memorable line in literature. It is the title, for example, of a notable documentary from the 1960s about a high-profile British concert tour by the enigmatic singer Bob Dylan. We may all agree that, in general, it is best to focus on the future. But […]