ltsllc[at]yahoo.com wrote:

I had said:

- quote -

And then Rudy said:

- quote -

It would help to know just when you retired from the service.
Things do change, you know.

- quote -

You give the impression that IRS goes out of it's way to NOT
be friendly, and that just isn't so, either. My clients
tell me that when they contact IRS they (almost, 95% of the
time) always receive courteous service. Like the one
fellow whose out of town mileage for 2004 got disallowed by
letter audit. He spoke with the lady (I was out of the
country at the time), and she went out of her way to say
that this was JUST for 2004 and had nothing to do with 2005.
You can imagine why she noticed that. (grin)

No matter that he efiled or not, the data was still there.

ChEAr$,
Harlan Lunsford, EA n LA

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<ltsllc[at]yahoo.com> wrote:

- quote -

Finally a CPA who points out the reality! Electronic filing
is generally NOT in the interest of the taxpayer. Any
savings in processing expense is unlikely ever to result in
increased net tax revenue -- the IRS will simply redeploy
staff into audit and enforcement. Further, by insulating the
IRS from the expenses that a complex tax code entails --
even if it is simply the modest expense of having to employ
armies of clerks typing in details from increasingly
esoteric forms -- all the brakes are off and the tax code
can be made ever more complex and confusing at no cost to
the government.

Extra audits and an even more complex tax code might be good
news for CPAs, EOs and accountants. But it certainly isn't
good news for the rest of us. So remember people -- "Print
and Post. It'll save you the most!"

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

- quote -

"Since someone else agreed with you on point 2, I have to
take the time to say "it just ain't so." "

My decades of IRS work experience says that it "just is so",
exactly as Crystal described.

Everyone should remember that the IRS is not your friend and
they are not there to help you. Electronic filing is a case
in point.

With electronic filing, the IRS makes it seem like such a
great deal for the taxpayer but what they are doing is
passing on the time, expense, errors, etc of data entry by
IRS employees onto the taxpayer and to add insult to injury,
the taxpayer gets to pay for it!

The DIF score formula has not been changed in years yet tax
law has and so there are more entries and more forms and
schedules that are NOT reflected in the DIF score formula.

However, the IRS does have other ways of selecting tax
returns for audit that don't involve DIF scores, and by
electronically filing, you are providing the IRS with MORE
info to use to (possibly) select your return for audit or
examination. By filing electronically, ALL of your tax info
is stored on IRS computers and simple computer programming
can be (and is) done to select tax returns that meet certain
examination criteria. If your paper filed tax return did not
have all of its entries input, which is always the case,
then in certain situations your tax return will not meet the
examination criteria and won't be on the list for possible
examination.

Rudy
www.LizcanoTaxServicesLLC.com

Disclaimer: The posted answer is for educational and
guidance purposes only and Lizcano Tax Services, LLC and/or
Rodolfo Lizcano have not been engaged to render any tax,
accounting, legal, or other professional services.

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- quote -

Whether electronic or paper, the data is available, at least
on a ~well prepared~ return.

More data is better, the examiners have more data to answer
questions that arise in common mis-matches during the
cp2000/2501 screening process.

Math verification of a computer prepared and subsequently
E-filed return reduces human induced errors.

The only negative I see for the TP, if they are in a
collection action on prior liabilities or the return
currently being filed, the bank & wage information in the
ELF file become immediate targets as levy sources in the
collection stream.

In the days or old, this information took longer to merge
into collection LEVY SOURCE data systems

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pleasedontemailme[at]dot.com wrote:

- quote -

Since someone else agreed with you on point 2, I have to
take the time to say "it just ain't so."

It doesn't matter what data is "captured" from either
efiling or a paper return, IRS has their own criteria when
it comes to audits, and detailed expenses on a schedule c
isn't one of them. IRS is more interested in probabilities
and gross income and net losses than the teeny weeny
details.

ChEAr$,
Harlan Lunsford, EA n LA
efiler since 1989
and EA for a loooong time

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- quote -

Crystal is correct on #2.

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- quote -

Point 2 is valid, points 1 and 3 arguable, and points 4 and
5 just silly in my opinion.

When you file a paper return, the IRS does NOT capture all
of the data on the return. When you file an electronic
return, they do. Filing an electronic return thus provides
more data for analysis. On certain forms the IRS collects
as little as 15% of the information provided via a paper
return.

Using a computer would lower the chance of a mathematical
error or of forgetting a required form, so that makes sense.

The IRS has used preprinted labels for a variety of unsavory
(to the average taxpayer) reasons from time to time.
Currently? I don't know.

But for dog's sake, if you owe tax and leave a few dollars
unpaid you'll just generate correspondence with the IRS as
they seek to collect the balance... plus penalties and
interest.

You should use Schedule C when appropriate and line 21 as
little as possible.

-Crystal

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- quote -

Yes, No, No, No, No.

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Other than suggestion #5, all of your suggestions are
irrelevant.

1) The only thing not preparing your return by hand might do
is slow up the automatic processing mechanisms if your
handwriting is illegible. Truly atrocious handwriting might
also get you a telephone audit, but once your handwriting
issues are cleared up, there won't be an audit (assuming
your numbers were otherwise correct).

2) Again, the only thing not using electronic filing will do
is slow down the processing time, and thus the time til you
get your refund.

3) ??

4) ?? Leaving unpaid a few dollars of your tax due and
owing is not only a good way to avoid an audit, it's a good
way to get sent a notice of deficiency, along with a
potential audit.

5) This will avoid an audit if your "outside income" is from
activities that do not rise to the level of a trade or
business, and aren't from activities that must be reported
on other schedules. Reporting non-business income as
business income on Sch. C is inviting an audit, if it's
pretty clear that there was no business. On the other hand,
reporting what is clearly business income on line 21 instead
of on Sch. C is also inviting an audit.

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Ed Wicks <EdWi...[at]noplace.net> wrote:

- quote -

All of these are silly, but perhaps the silliest is the last
one. If you have non-employee compensation and do not use
Schedule C, you will invite a closer look.

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"Ed Wicks" <EdWicks[at]noplace.net> wrote:

- quote -

#1 I would agree with

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Ed Wicks <EdWi...[at]noplace.net> wrote:

- quote -

Invalid.

- quote -

Invalid.

- quote -

Invalid.

- quote -

Invalid. Bad idea.

- quote -

Invalid. A Very Bad Idea if the outside income is from a
trade or business.

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Ed Wicks wrote:

- quote -

1 thru 4 are urban legends. Whatever various (essentially
computer) programs IRS has to select returns for audit
screening, none of that stuff is relevant.

#5 would be very effective, but (and for that reason) is a
crime under 7206, even if S/E is fully paid. It appears to
clearly pass what DOJ calls the "DiVarco test," and worse
than what Mr. DiVarco did. Under 7206, it isn't necessary
there be an underpayment of tax. Only tax perjury --
willfully falsifying as to even one material item, much less
omitting every entry on a Sch C. Mr. DiVarco only lied
about the nature of his reported Sch C business. Worse, it
is not a matter for the jury to decide whether IRS
enforcement was impeded by the defendant's falsity. Only
that the gov't state that it was. Nor need it be proven
what the defendant's motives were in the falsity.

Fred F.

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"Ed Wicks" <EdWicks[at]noplace.net> wrote:

- quote -

Guarantees a pretty return without math errors. Reduces
error resolution; no effect on audits.

- quote -

Urban legend. Everything needed for computer audit
potential analysis is transcribed from paper returns.

- quote -

Huge pile of BS. All the label does is reduce the
possibility that a data transcriber will mess up your name
and address.

- quote -

Twaddle. Audit analysis doesn't care whether you paid the
original balance due.

- quote -

An excellent way to guarantee an audit.

Were I you I'd send that card to the person I most hate.

--
Phil Marti
Clarksburg, MD

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Don't remember the source, but in my tax folder I have a 3x5
card on which I wrote the following suggestions for avoiding
an audit. Are they good ideas?

1. Prepare your return by computer.
2. Don't use electronic filing.
3. Don't use the IRS preprinted label.
4. If you owe tax, leave a few dollars unpaid.
5. Don't use Schedule C for outside income--use Line 21.

Thx. Ed

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >