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            Ratcheting Up, But Where?                      
                                                                                 
      Good News About IRS Scrutiny IRS Proficiency
IRS Audit Focus
    Historically, the IRS has focused its audit activity on personal tax returns with schedule C attached.
 
                     
                        However, the IRS is presently trying to hide its audit focus from public scrutiny.  Right now the IRS is required by law to publish audit activity so watchdog agencies can keep an eye on them.  But they are so paranoid about the public finding out shat they are up to that they have requested legislation to put an end to that requirement.

Keeping that in mind, you almost have to read between the lines to know what they are doing.  Their press releases may not be entirely trustworthy.

About a year ago there was a story about how the IRS once again discovered they collect the most money from individual tax returns that have a schedule C.   I do not doubt that.  But official announcements from the IRS say they are shifting focus away from individual returns to small corporations.  That I do doubt.  Their published statistics seem to bear that out.  But I see no on-the-street evidence of that.

This is what I think the IRS is doing.

1.  They are continuing to audit individual returns because they are the most lucrative.  They may even be shifting additions resources in that direction.  Also, they are the easiest returns to audit.  Individuals are easiest to intimidate, while small corporations owned by some one like Donald Trump the intimidation would go the other way.

2.  They are auditing small corporations that fail to do the things required to legitimize themselves.  In other words, the low lying fruit.

The obvious conclusion is don't file schedule C, and make sure to legitimize your corporation.

                     
                                                                                 
                                                                                 
                                                                                 
                                                                                 
                                                                                 
                                                                                 
                                                                                 
                                                                                 
                                                                                 
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