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Friday, November 28, 2014
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Published: Saturday, 6/23/2007

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IT'S a word guaranteed to send a chill through even the most honest American taxpayer: Audit.

The very mention of it has even those who pay every cent of tax owed, who are diligent in declaring every dollar earned, who never overstate a deduction, wondering if somewhere, somehow they might have made an honest error and will be hauled before what most folks think of as the modern equivalent of the Spanish Inquisition.

Now comes news that the Internal Revenue Service is going to resume random audits. Starting this fall, it plans to start targeting about 13,000 taxpayers a year for a closer look at their returns.

The purpose is to see whether new data can be found and then used in the formulas that select returns from among the 136 million expected to be filed this year, for example, that may take liberty with the truth.

The agency has been criticized in the past for similar programs. One in the early 1990s was called intrusive and time-consuming for taxpayers, and because of that another planned for the mid-1990s was halted.

The new program of random audits, to be done across income levels, is expected in the rather ominous words of an IRS official, to "cover more ground that a regular audit."

Much as taxpayers may be shrinking in horror at those words, they might also take a moment to consider that tax fraud is big business in this country. According to the IRS, the gap between what is collected in taxes and what it believes should be collected is a staggering $290 billion.

Plus, taxpayers expecting the third-degree if targeted may be surprised to learn that it's possible they won't even know they've been audited. Much of the verification of returns can be done by checking computerized records.

Still, there are at least a couple of areas of concern in the IRS plan, no matter how laudable the goal of collecting what is owed by scofflaws.

First, the random targeting means that taxpayers who have given no evidence of being anything other than honest in their returns presumably have as much chance of being hauled before IRS inquisitors as those whose returns raised flags.

Also, it may cost a taxpayer a considerable sum in accountant or attorney fees to have professional assistance in an audit, even though they never submitted false returns.

Everyone supports the IRS going after tax dodgers - except the dodgers themselves, of course. Those who honestly pay their taxes have every reason to be angered by those who lie.

But a way should be found so that taxpayers are not financially penalized for having to prove they are honest.



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