Types of People the IRS Audits

Wrongful audits by the IRS have been all over the news this week. According to reports,  some IRS agents were targeting groups with "Tea Party" and patriot" in their names.

However, you don't have to be an organization that claims President Obama was born in Kenya and is a secret Muslim to get audited by the IRS.

According to CNBC.com, there are types of specific people that the IRS keeps a close eye on.

The IRS watches social media sites to see who is bragging about non-payment or underpayment of taxes. E-commerce sites such as eBay are also watched to see if money is made, but not reported.

The American Civil Liberties Union has filed a Freedom of Information Act request for documents explaining whether the IRS always obtains search warrants to read email and other electronic communications.

"Unfortunately, while the documents we have obtained do not answer this question point blank, they suggest otherwise," says Nathan Freed Wessler, an attorney at the ACLU.

Non-cash deductions such as donations of cars or clothing are watched by the IRS  to make sure people don't deduct too much.

Another target are people who are self-employed, according to Frederick Dailey, a tax lawyer and the author of "Stand Up to the IRS,"

 "If you are in business for yourself, or you work for someone who is, know that the IRS is watching," warns Dailey on his website.

The IRS also keeps an eye out for people who work freelance for cash, don't report it, but the client does as a" business expense."

According to date from the IRS, people making $1 million, or more, are 12 times more likely to be audited.

Source: CNBC.com


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