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Showing posts from March, 2008

IRS Increasing Audits!

IRS is Increasing Audit Rates

The IRS is greatly increasing the rate of tax audits on higher income taxpayers and businesses. The audit rate started dropping in 1998 because of restructuring at the IRS. It bottomed in 2000, when just 0.5 percent of individual tax returns were audited but doubled that rate by 2007, to 1 percent.

Audits of the Wealthy. Audits of those who make more than $1 million a year jumped 84 percent from fiscal 2006 to 2007, according to IRS figures. Those taxpayers have a 9 percent likelihood of being audited. That's nine times as much as the average taxpayer.

Small Business Audits. But when it comes to businesses, the IRS is stepping up audits on smaller and mid-sized firms. The IRS targets sole proprietorships that report income on Schedule C with a 6 percent chance of getting audited.

"We have increased our focus on mid-market corporations - those with assets between $10 million and $50 million," the IRS said in a statement.

Watch out for Tax Scam Preparers

IRS Warns of Scams by Tax Return Preparers!

The IRS Reports:
"Dishonest tax return preparers can cause many problems for taxpayers who fall victim to their schemes. These scam artists make their money by skimming a portion of their clients’ refunds and charging inflated fees for return preparation services. They attract new clients by promising large refunds. Some preparers promote the filing of fraudulent claims for refunds on items such as fuel tax credits to recover taxes paid in prior years. Taxpayers should choose carefully when hiring a tax preparer, especially one who promises something that seems too good to be true."

If you have any questions about promises by a tax return preparer, call Ronald J. Cappuccio, J.D., LL.M. (Tax) at (856)665-2121.

NJ Government at the Bottom

New Jersey Government at the Bottom

The Pew Center reports that New Jersey has an extremely poorly run government. Except for Rhode Island and New Hampshire, New Jersey government scored among the worst in the US. That is no surprise to taxpayers who have suffered years of high tax and wasteful spending big government.