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Thread: Article re IRS & Under-Reported Income

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    Featured Member GnBeret's Avatar
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    Default Article re IRS & Under-Reported Income

    Beware... is starting to look like they've decided it's time to try to rein things back in a bit.

    http://story.news.yahoo.com/news?tmp..._csm/ataxman_1
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    Banned Melonie's Avatar
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    Default Re: Article re IRS & Under-Reported Income

    Actually this isn't new. The IRS went on record two years ago that it was changing its emphasis away from auditing for the validity of large deductions, and instead making a concerted effort to identify and 'corral' unreported/underreported income. Last year they made a focused attack on Casinos and Cab companies, essentially forcing dealer/waitstaff/cabdriver tips to be channeled through the company's payroll systems and thus automatically reported to the IRS. This year they have added 2000 new IRS agents to expand the effort into other businesses which are also 'notorious' for high cash earnings. The IRS has also been authorized to employ 'bounty hunters' to track down tax cheats (who are paid a percentage of the taxes collected on previously unreported/underreported incomes they identify and report) and the 'bounty hunters' are reportedly very busy in California.

    You didn't think that my repeated posts regarding dancers taking major risks by continuing to 'fly below the radar' were all based on paranoia, did you ?

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    Default Re: Article re IRS & Under-Reported Income

    The last time the IRS went after under-reported income in a serious way was in the early 80's. The main focus at the time was waitstaff. They did not go after strippers back then I guess because they didn't want to have the press of IRS agents going to strip clubs and getting lap dances and there would be too many agents competing to do it. LOL Then there is the problem of not knowing the girls "real name" much less SSAN where as with a cocktail waitress or whoever that information is kept buy the employer for tax reasons.

    The story I heard from several IRS agents that were involved in these "stings" was that it went like this. An agent or two would go to a business, steakhouse, lounge whatever and would run up a bill, high enough that a tip of 30 dollars between the two of them might be on the high end but not that rare. they would tip the waitress 30 dollars and keep track of her name and date, the threshold back then for the tip amount you had to report to your employer was 25 dollars a week. Some time into the next reporting month another IRS agent would visit this business and get the employer to let him look at the books, normally under the pretense that this is just some kind of "courtesy visit" the employer who felt he had nothing to hide and did not really want to get on the bad side of the IRS would normally comply. The agent would check and see what amount if any the waitress in question reported to her boss for the week in question. If it was nothing or maybe ony 25 dollars but not at least the 30 dollars that they gave her, then they had her dead to rights for under reporting her income.

    Yes it was time and manpower intensive to do this but they had a lot of agents and lots of money back in those days, now they have the power of techology on their side.

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    Featured Member GnBeret's Avatar
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    Default Re: Article re IRS & Under-Reported Income

    Quote Originally Posted by Melonie
    You didn't think that my repeated posts regarding dancers taking major risks by continuing to 'fly below the radar' were all based on paranoia, did you ?
    No, it's very apparent that you do a good job of keeping up with this stuff - and besides, to the extent it's based on hard information a little bit of paranoia can be a very good thing - tends to manifest itself as caution.
    "That's your answer Old Man? I guess you're a Hard Case too...."
    - Luke
    "Some men, you just can't reach...."
    - Boss, re Luke

    If there's one thing in my life these years have taught me,
    it's that you can always see it coming, but you can never stop it.
    -Cowboy Junkies

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