2015 could be easiest year to cheat IRS

Written By Unknown on Jumat, 16 Januari 2015 | 23.16

As Americans get ready to fill out their 1040s and pay Uncle Sam, the IRS offers up this little tidbit of news: 2015 may be the best year ever to cheat on your taxes.

Okay, so the tax agency didn't come right out and say exactly that but it did note in its annual report to Congress that the combination of budget cuts over the past five years and the "lack of effective administrative and congressional oversight" is "reshaping US tax administration in ways that are not positive for future tax compliance."

In other words, the IRS might not have the muscle to catch you cheating on your taxes this year.

That's right, the agency will have less money to do audits — and audits, after all, catch a lot of crooks.

In the last five years, there's been a 15 percent decline in the number of IRS staff dedicated to enforcing tax law, the Center on Budget & Policy Priorities has found. Less than 1 percent of taxpayers are audited.

"You're just gutting the part of the IRS that goes after tax cheaters," Chuck Marr, director of federal tax policy for the CBPP, told Bloomberg.

At least $2 billion in unpaid taxes will slip through Uncle Sam's fingers this year, the IRS estimates.

Already, it seems, some of the more less honest Americans are already pushing the boundaries of tax deductions in order to trim their tax bill.

Creative filers have successfully deducted the cost of home landscaping, pet food, and in at least one famous case, a boob job, Bloomberg reports.

Trying to cheat the tax man because of the budget constraints the IRS is now going through could be an expensive game of Russian roulette, however.

The IRS generally can go back three years in an audit, Troy Lewis, a CPA in Draper, Utah, told Bloomberg. And if someone grossly misstates income by 25 percent, the statute of limitation can stretch out to six years.

And by then, Lewis notes, the IRS might be working with a bigger budget.

The annual report, submitted to Congress on Jan. 14 by Nina Olson, the National Taxpayer Advocate, also details a stunning lack of service to taxpayers — something also brought about by budget cuts.

Nearly 36 percent of phone calls to the IRS go unanswered, half the mail the IRS receives is not handled timely and virtually zero tax returns are prepared by IRS walk-in sites, Olson found.

Olson tells Congress that changes need to be made or else Americans will lose respect for the IRS.

"The IRS will never be a beloved federal agency, because it is the face of the government's power to tax and collect," Olson writes in the report. "But it should be a respected government agency…."


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