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If you chose to represent yourself in an Internal Revenue Service Examination realize the IRS Revenue Agent (RA) or Tax Compliance Officer (TCO) assigned to your file is trained very thoroughly to advocate on behalf of the United States Government. One method used quite often is to create a (false) sense of security in the personal interview setting or even on the phone with cathartic yet repetitive narratives. This is done in my humble opinion to lull you into a sense of complacency which subsequently if not held in check leads to providing responses way beyond the scope of the audit matters in question. More importantly when you talk too much you are creating opportunity for the RA or TCO to potentially broaden the authority of the audit should you happen to say something inadvertently that could appear circumspect.

When it comes to the actual audit process:

1. Recognize the IRS RA or TCO assigned your file is a person too who is just trying to do their job of advocating as aggressively as allowed by law on behalf of the US government and resist the urge to posture aggressively in response as it accomplishes very little to nothing and is generally futile. Most RAs and TCOs are reasonable and I’ll even go out on a limb saying that there even a few that are outstanding which can be a sincere blessing. If however you get an IRS RA or TCO that is a unilateral jackass – they do exist – this is where you need to focus on internalizing emotions and recognize you can request a different examiner. Read More

Written by John Dundon | Posted in Federal • Individual • IRS • United States

According to the newly released 2012 IRS Data Book, the IRS collected almost $2.5 trillion in federal revenue and processed 237 million returns, of which almost 145 million were filed electronically. Out of the 146 million individual income tax returns filed, almost 81 percent were e-filed. More than 120 million individual income tax return filers received a tax refund, which totaled almost $322.7 billion. On average, the IRS spent 48 cents to collect $100 in tax revenue during the fiscal year, the lowest cost since 2008.

The IRS examined just under one percent of all tax returns filed and about one percent of all individual income tax returns during fiscal year 2012. Of the 1.5 million individual tax returns examined, nearly 54,000 resulted in additional refunds.

An electronic version of the 2012 IRS Data Book can also be found on the Tax Stats and the following are some highlights worth noting.

In FY 2012, IRS initiated 5,125 criminal investigations.

In FY 2012, the IRS closed 60,793 applications for tax-exempt status and other determinations. Of those, the IRS approved tax-exempt status for 52,615 organizations. In FY 2012, the IRS recognized more than 1.6 million tax-exempt organizations and nonexempt charitable trusts.

In Fiscal Year 2012, General Counsel received 31,295 Tax Court cases involving a taxpayer contesting an IRS determination that he or she owed additional tax.

IRS workforce and the resources that the IRS spends to collect taxes and assist taxpayers. In Fiscal Year (FY) 2012, the IRS collected more than $2.5 trillion, incurring a cost of 48 cents, on average, to collect $100.

IRS’s actual expenditures in FY 2012 was less than $12.1 billion, which was used to meet the requirements of its three core operating appropriation budget activities.

In FY 2012, the IRS employed a total workforce of 97,941, including part-time and seasonal employees.

Written by John Dundon | Posted in Federal • Individual