IRS is sending out bills for 2010 balances due

[taxea]

I efiled a client return who owed this year and much to my surprise he actually received a bill. Boy they have really updated their computers if they are spitting out bills that quickly. Maybe they will be able to find stuff to audit a lot faster so the client isn't paying 18 months of interest before the IRS decides to question something.

[BHoffman]

http://blogs.forbes.com/ashleaebeling/2011/03/15/whoops-irs-sends-200000-balance-due-notices-by-mistake/

[JohnH]

Nothing quite compares to the spectacle of a tax preparer cheerleading for the IRS to audit their clients.
Fascinating...

[Koss]

Audit Time Frame

In her defense, it sounds like the original post was saying that maybe with improvements in overall efficiency, the IRS will start auditing earlier. For example, it would be nice if they could audit 2010 tax returns around the end of 2011, instead of waiting until the beginning of 2013. Her point was that if something is identified and corrected earlier, there is less impact in terms of interest and penalties for the taxpayer.

Although I can't point to a specific citation, I'm pretty sure even the National Taxpayer Advocate has raised this issue in one of her many reports. Regardless of what the law says, or what the intent of the law may have been, there is certainly a perception of unfairness in a system where the IRS can wait three years to open an examination, take another three to six months to complete the examination, and then hand the taxpayer a bill for three and half years of interest, as a result of an error that may have been an honest mistake.

Audits are going to happen. I'm not "cheerleading" for them, but the reality is that they are going happen whether they have anyone cheerleading or not. I actually agree with taxea that if you hold all other variables constant, it would appear to be better for our clients if the audits happen sooner rather than later.

BMK

[taxea]

In her defense, it sounds like the original post was saying that maybe with improvements in overall efficiency, the IRS will start auditing earlier. For example, it would be nice if they could audit 2010 tax returns around the end of 2011, instead of waiting until the beginning of 2013. Her point was that if something is identified and corrected earlier, there is less impact in terms of interest and penalties for the taxpayer.

Although I can't point to a specific citation, I'm pretty sure even the National Taxpayer Advocate has raised this issue in one of her many reports. Regardless of what the law says, or what the intent of the law may have been, there is certainly a perception of unfairness in a system where the IRS can wait three years to open an examination, take another three to six months to complete the examination, and then hand the taxpayer a bill for three and half years of interest, as a result of an error that may have been an honest mistake.

Audits are going to happen. I'm not "cheerleading" for them, but the reality is that they are going happen whether they have anyone cheerleading or not. I actually agree with taxea that if you hold all other variables constant, it would appear to be better for our clients if the audits happen sooner rather than later.

BMK

Thank you Koss....there are always those who choose to take a negative attitude...I'm glad you saw through them.

[JohnH]

Oh of course. How could I have POSSIBLY misunderstood.

Let's get real here. Anything that makes the IRS more efficient in the audit department is definitely NOT in the long-term interests of our clients. (Unless maybe they concurrently shortened the SOL to 2 years)

(I've got a side bet on responses to this post)

[S T]

We should have notices of CP 2000 and any audits sooner than later, and they should also not be scheduled during tax filing time from Jan - April.

It would also be nice if IRS have the e-services up to date during tax filing so we can check our clients records in case the t/p neglected to provide us with the information. What a concept that would be. I am sure this is a date issue

How can IRS expect us to file an accurate return, when Brokerage Houses have until end of February or March to file in corrected statements, K-1's are not due from partnerships or S Corps until a later date, Banks don't have to report interest earnings to t/p if under $10 (but they report to IRS) 1099 forms are due to recipient Jan 31, but don't have to be filed until end of February or efiled until the end of March.

Let's face it, if we are lucky, we have the information to file a return, and then in some cases are looking at amended returns, or the possibility of the CP 2000 notices.

So far for 2010 - I have not been able to retrieve any wage/income records on clients - only item may have been ES taxes paid.

Sandy