In a blockbuster report that came out this week, The IRS admitted to having an unprocessed backlog of around 1B documents. That’s billion with a B.
Those documents include but aren’t limited to…
1 – Income Tax Returns
2 – Payroll Tax Returns including W-2’s, W-3’s, 941’s and 940’s
3 – 1099’s, 1098’s, and 1097’s
4 – And amended or corrected returns
We knew they had a ridiculously large backlog, but no one ever expected it to be this large. But wait. There’s more.
IRS Agents still process returns manually.
They don’t scan them in the way a normal company would to digitize a document. They still sit at computers and type in everything we put on a return.
They’re complaining that it takes up to 4 weeks to process a paper return. And if they’re going to type it in, one number at a time, it’s no wonder. This does nothing but reinforce what I’ve counseled clients for the past 25 years.
Don’t Electronically File.
Let me leave you with this.
The only reason they’re digitizing all of this and the only reason they want you to electronically file in the first place, is so they can run your returns through their computer system and choose audit targets. I’m going to say that again so that even the people in the cheap seats can understand me.
The way the IRS chooses an audit target is by taking your personal income tax returns and matching them up against all of the other documents they have on file under your social security numbers for that year. They already have copies of your W-2’s, 1099’s, 1098’s, etc.
They already know how much money you made from your jobs, your companies, and the stock market. When you do your return, and the numbers don’t match what they already have on file, the machine puts little red flags on the portions of the return that don’t match up.
That’s where the term “Red Flag” come from.
The electronic return is then sent to an agent. If there are just a few changes on the return, they’ll send out a change letter demanding additional tax, interest, and penalty.
If there are enough major mistakes on your return where they’ll collect enough money to justify the cost of labor, they’ll send out an auditor. That’s how the system works.
When you electronically file, you simply make it easier for them to choose your return to be audited. The only reason they began allowing electronic filing in the first place was so they wouldn’t have to pay someone to type your return into a machine so that it could be checked.
And now that the Service is admitting to having a backlog of 1B documents that haven’t been digitized, it means that they might never get your return into their system. At that point, it would never be checked.
Wealthy taxpayers never electronically file. Do you actually think that Billionaires have ever done a return and then pushed “submit”?
This is because investing in a $.67 cent stamp is the easiest way in this country to not be audited.
Once again. Say it with me. This time with gusto.
Don’t Electronically File.
You’re only begging to be audited.
We’re all going to get through this. Let’s get through it together.
As an inducement, we’re offering 33% off your first six months of bookkeeping and / or the first three months of electronic payroll services on a complimentary basis. In order to claim this benefit, please click on the appropriate button below and provide your contact information. We’d love to help.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.AccountingSolutionsLtd.com
www.SalarySolutions.net
Note that the only professional services provided by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.