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Posted by dpb on April 9, 2008, 12:22 pm
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Stuart Bronstein wrote:
...
> I wonder if this has anythinig to do with the statistic I heard that
> the IRS is more likely to audit the poor than the rich. ...
That there are far more poor than rich have anything to do with that?
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Posted by kastnna on April 9, 2008, 2:22 pm
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> Stuart Bronstein wrote:
>
> ...
>
> > I wonder if this has anythinig to do with the statistic I heard that
> > the IRS is more likely to audit the poor than the rich. ...
>
> That there are far more poor than rich have anything to do with that?
Or maybe because the rich have considerable more resources to fight an
audit. Or maybe because they don't want to piss off the people that
provide most of their revenue AND have the means to lobby for tax law
changes???
Just possibilities.
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<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Mark Bole on April 9, 2008, 11:12 pm
Please log in for more thread options kastnna wrote:
>>> I wonder if this has anythinig to do with the statistic I heard that
>>> the IRS is more likely to audit the poor than the rich. ...
>> That there are far more poor than rich have anything to do with that?
> Or maybe because the rich have considerable more resources to fight an
> audit. Or maybe because they don't want to piss off the people that
> provide most of their revenue AND have the means to lobby for tax law
> changes???
No, it's just basic statistics. If you randomly audit returns, and 80%
of the returns are from "poor" (in this context, equals "not rich")
people, then 80% of the audits will be of same poor people.
-Mark Bole
--
<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Barry Margolin on April 9, 2008, 11:33 pm
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> kastnna wrote:
>
> >>> I wonder if this has anythinig to do with the statistic I heard that
> >>> the IRS is more likely to audit the poor than the rich. ...
>
> >> That there are far more poor than rich have anything to do with that?
>
> > Or maybe because the rich have considerable more resources to fight an
> > audit. Or maybe because they don't want to piss off the people that
> > provide most of their revenue AND have the means to lobby for tax law
> > changes???
>
> No, it's just basic statistics. If you randomly audit returns, and 80%
> of the returns are from "poor" (in this context, equals "not rich")
> people, then 80% of the audits will be of same poor people.
But audits aren't done at random, they supposedly look for triggers.
Poor people may be more inclined to cheat on their taxes simply because
they NEED whatever they can save more than rich people. Rich people
don't need to cheat as much, they have lots of legitimate tax loopholes
available to them.
On the other hand, when rich people DO cheat, they get much more out of
it.
--
Barry Margolin, barmar@alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***
--
<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Mark Bole on April 10, 2008, 12:02 am
Please log in for more thread options Barry Margolin wrote:
>
> But audits aren't done at random, they supposedly look for triggers.
As I learned once in this group, a certain number of audits must always
be conducted at random, else how to establish a baseline?
> Poor people may be more inclined to cheat on their taxes simply because
> they NEED whatever they can save more than rich people. Rich people
> don't need to cheat as much, they have lots of legitimate tax loopholes
> available to them.
>
> On the other hand, when rich people DO cheat, they get much more out of
> it.
The funny thing is, ordinary deductions are limited or disappear
altogether for so-called "rich people".
(I'm using the term "rich" to describe people under $1.5M AGI and over
$150K -- your definition may vary depending on local conditions).
Making up deductions really doesn't help the rich that much. Limitations
and phase-outs and progressive brackets eliminate many tax benefits. My
experience is that our current federal income tax system is progressive
by design (and not flat), within this income range.
-Mark Bole
--
<< ------------------------------------------------------- >>
<< 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 (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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