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Who's More Likely to Be Audited: A Person Making $20,000 -- or $400,000?
There was another thread at DU a few days ago discussing this series at ProPublica about the gutting of the IRS. I'll link to it if I can find it.
David Fahrenthold Retweeted
The IRS has been stripped of most of the resources it used to devote to audits. But more than a third of those it still does are of the working poor. The effective upshot: a massive tax cut for wealthy tax cheaters. Just out @ProPublica
Link to tweet
GUTTING THE IRS
Whos More Likely to Be Audited: A Person Making $20,000 or $400,000?
If you claim the earned income tax credit, whose average recipient makes less than $20,000 a year, youre more likely to face IRS scrutiny than someone making twenty times as much. How a benefit for the working poor was turned against them.
by Paul Kiel and Jesse Eisinger Dec. 12, 5 a.m. EST
GUTTING THE IRS
Who Wins When a Crucial Agency Is Defunded
When Natassia Smick, 28, filed her familys taxes in January, she already had plans for the refund she and her husband expected to receive. Mainly, she wanted to catch up on her credit card debt. And she was pregnant with their second child, so there were plenty of extra expenses ahead. ... Since Smick, who is taking classes toward a bachelors degree, and her husband, a chef, together earned around $33,000 in 2017, about $2,000 of that refund would come from the earned income tax credit. Its among the governments largest anti-poverty programs, sending more than $60 billion every year to families like Smicks: people who have jobs but are struggling to get by. Last year, 28 million households claimed the EITC.
Smick, who lives outside Los Angeles, thought shed get her refund in a month or so, as she had the year before. But no refund came. Instead, she got a letter from the IRS saying it was conducting a thorough review of her return. She didnt need to do anything, it said. Smick waited as patiently as she could. She called the IRS and was told to wait some more. ... It wasnt until four months later, in July, that she got her next letter. The IRS informed her that she was being audited. She had 30 days to provide supporting documentation for basically everything. As she understood it, she needed to prove that she and her husband had earned what theyd earned and that her child was her child.
By this point, Smick was home with her baby. She set about rounding up W-2s, paycheck stubs, bank statements and birth certificates. Proving that her 4-year-old had lived at the familys address for most of the year, as the EITC requires, was the hardest thing, but she did her best with medical records, some papers from his day care, and whatever else she could think of. ... She sent it all off and hoped for a quick resolution, but the next IRS letter quashed that hope. The IRS said it would review her response by Feb. 16, 2019 six months away. Collectors were calling about the credit card bills. She didnt know how shed make it that long.
Smick couldnt understand why this was happening. All she had done was answer the questions on TurboTax. Isnt it rich people who get audited? We have nothing, she said, and its just frustrating knowing that we have nothing. ... It seemed there was nothing she could do. And when she called the IRS to ask how it could possibly take so long to review her documents, she remembers being told that there was nothing they could do, either: The IRS was extremely short staffed, the person said. ... Budget cuts have crippled the IRS over the past eight years. Enforcement staff has dropped by a third. But while the number of audits has fallen across the board, the impact has been different for the rich and poor. For wealthy taxpayers, the story has been rosy: Not only has the audit rate been cut in half, but audits now tend to be less thorough.
....
See the Series
Gutting the IRS
Who Wins When a Crucial Agency Is Defunded
Paul Kiel covers business and the economy for ProPublica, reporting on the foreclosure crisis, consumer debt and other financial issues.
paul.kiel@propublica.org
@paulkiel
917-512-0248
Signal: 347-573-3039
Jesse Eisinger is a senior reporter and editor at ProPublica.
Jesse.Eisinger@propublica.org
@eisingerj
Whos More Likely to Be Audited: A Person Making $20,000 or $400,000?
If you claim the earned income tax credit, whose average recipient makes less than $20,000 a year, youre more likely to face IRS scrutiny than someone making twenty times as much. How a benefit for the working poor was turned against them.
by Paul Kiel and Jesse Eisinger Dec. 12, 5 a.m. EST
GUTTING THE IRS
Who Wins When a Crucial Agency Is Defunded
When Natassia Smick, 28, filed her familys taxes in January, she already had plans for the refund she and her husband expected to receive. Mainly, she wanted to catch up on her credit card debt. And she was pregnant with their second child, so there were plenty of extra expenses ahead. ... Since Smick, who is taking classes toward a bachelors degree, and her husband, a chef, together earned around $33,000 in 2017, about $2,000 of that refund would come from the earned income tax credit. Its among the governments largest anti-poverty programs, sending more than $60 billion every year to families like Smicks: people who have jobs but are struggling to get by. Last year, 28 million households claimed the EITC.
Smick, who lives outside Los Angeles, thought shed get her refund in a month or so, as she had the year before. But no refund came. Instead, she got a letter from the IRS saying it was conducting a thorough review of her return. She didnt need to do anything, it said. Smick waited as patiently as she could. She called the IRS and was told to wait some more. ... It wasnt until four months later, in July, that she got her next letter. The IRS informed her that she was being audited. She had 30 days to provide supporting documentation for basically everything. As she understood it, she needed to prove that she and her husband had earned what theyd earned and that her child was her child.
By this point, Smick was home with her baby. She set about rounding up W-2s, paycheck stubs, bank statements and birth certificates. Proving that her 4-year-old had lived at the familys address for most of the year, as the EITC requires, was the hardest thing, but she did her best with medical records, some papers from his day care, and whatever else she could think of. ... She sent it all off and hoped for a quick resolution, but the next IRS letter quashed that hope. The IRS said it would review her response by Feb. 16, 2019 six months away. Collectors were calling about the credit card bills. She didnt know how shed make it that long.
Smick couldnt understand why this was happening. All she had done was answer the questions on TurboTax. Isnt it rich people who get audited? We have nothing, she said, and its just frustrating knowing that we have nothing. ... It seemed there was nothing she could do. And when she called the IRS to ask how it could possibly take so long to review her documents, she remembers being told that there was nothing they could do, either: The IRS was extremely short staffed, the person said. ... Budget cuts have crippled the IRS over the past eight years. Enforcement staff has dropped by a third. But while the number of audits has fallen across the board, the impact has been different for the rich and poor. For wealthy taxpayers, the story has been rosy: Not only has the audit rate been cut in half, but audits now tend to be less thorough.
....
See the Series
Gutting the IRS
Who Wins When a Crucial Agency Is Defunded
Paul Kiel covers business and the economy for ProPublica, reporting on the foreclosure crisis, consumer debt and other financial issues.
paul.kiel@propublica.org
@paulkiel
917-512-0248
Signal: 347-573-3039
Jesse Eisinger is a senior reporter and editor at ProPublica.
Jesse.Eisinger@propublica.org
@eisingerj
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Who's More Likely to Be Audited: A Person Making $20,000 -- or $400,000? (Original Post)
mahatmakanejeeves
Dec 2018
OP
Me.
(35,454 posts)1. And Here's The Thing About Audits
They will find something which makes you pay extra as one man who audited us said, they have to account for their time.
eppur_se_muova
(36,256 posts)2. Go after the easy prey, who can't afford the best lawyers, of course. nt
Nitram
(22,776 posts)3. It's a lot cheaper to prosecute someone who can't afford a lawyer.
SWBTATTReg
(22,093 posts)4. A sad fact about the IRS and taxes and the hassle some of us go through. Thanks for posting. nt