Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (15) | Ignore Thread Prev | Next
Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Re: Data entry error/audit risk Date: 11/19/2009 2:26 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
"Does finding a data entry error on a tax return make it more likely that the return will be more thoroughly audited?"
=========================================
With the caveat that IRS doesn't publish their methodology for selecting returns for audit, in my experience -34 years now:

It depends on what kind of a "data entry error". For example, if a wrong number is entered for estimated tax payments, the IRS will catch that quickly, and send a bill or a refund. Nothing to audit about that.

Errors in income numbers are something else.

If it's a "matching notice" - where they reconcile the 1099s filed for a taxpayer with the income reported on the return - it might depend on just what the "communication" your friend received looks like. Right now they're sending out those notices for the 2007 returns. If they just tally up the unreported income - as they see it, which might be wrong - and do an assessment based on that, and your friend pays it, they'll be done.

I THINK that if a return catches their attention, whether for a 1099 matchup, or their regular audit selection process, or both, they don't do a down-and-dirty assessment based on 1099s AND then later do a regular audit. I've had agents show up for an audit, with one of the things they have to pursue being a 1099 mismatch.

You won't know more until looking at that letter.

Bill
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (15) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement