undefined | Better HN

0 pointsbushbaba3y ago0 comments

Idk. I think the IRS gets the better end of the stick here. They have you tell them how much you owe. If you report more than they knew about great they made money. If you tell them less than they knew about, then they'll audit you assuming the difference is large enough (and there being a high likelihood of winning)

0 comments

skeeter20203y ago

this is not how taxes work with the IRS. If you make a calculation error in their favour they will correct it and issue you a refund. If you make a compilation error in their favour and get reviewed or audited, you will get a refund. They also audit based more on discrepencies vs. "likelihood of a big payout".

If they precalculated your taxes and sent you a bill (or refund) it would (a) be easier, (b) be more accurate and (c) encourage simplification of the entire system. I consider that both more effective and more fair.

jtc3313y ago

You’re missing the point. The point is that the IRS isn’t aware of a good amount of income (trivial example is tips) unless you tell them about it.

ModernMech3y ago

Also income from illegal activity is taxed like any other. If you get caught for doing illegal things and not reporting it on your tax bill, you're in trouble for that too. Harder to prove you're stiffing the IRS when you pay the bill they send you.

cmelbye3y ago

If you are audited by the IRS and they find that you overpaid, they will issue a refund. It's not a one-way street.

elihu3y ago

I've never been audited, but several times I've had the IRS just tell me I did my return wrong and give me a bigger refund.

ryanianian3y ago

Does the IRS start an audit if they suspect you massively overpaid? They certainly do if you massively underpay.

_jal3y ago

Not an audit, but they corrected a mistake I made in my favor once. It was a trivial amount, like $30 or something, but they sent me a little packet explaining what they did, why, and a check.

antsar3y ago

Sure. But why in the world would they audit you if you overpaid?

function_seven3y ago

Whatever indicators they use to select audit recipients may correlate with under-payers, but it's not a guarantee. I'm sure there's some fraction of those they audit that turn out to have paid too much.

1 more reply

skeeter20203y ago

you can also claim refunds for years back; like an audit this is a 2-way street as well.

alasdair_3y ago

It isn’t equal however. If you underpay, the IRS has seven years to get the money. If you overpay, you have three. (Simplified of course)

j / k navigate · click thread line to collapse

0 comments

skeeter20203y ago

jtc3313y ago

You’re missing the point. The point is that the IRS isn’t aware of a good amount of income (trivial example is tips) unless you tell them about it.

ModernMech3y ago

cmelbye3y ago

If you are audited by the IRS and they find that you overpaid, they will issue a refund. It's not a one-way street.

elihu3y ago

I've never been audited, but several times I've had the IRS just tell me I did my return wrong and give me a bigger refund.

ryanianian3y ago

Does the IRS start an audit if they suspect you massively overpaid? They certainly do if you massively underpay.

_jal3y ago

Not an audit, but they corrected a mistake I made in my favor once. It was a trivial amount, like $30 or something, but they sent me a little packet explaining what they did, why, and a check.

antsar3y ago

Sure. But why in the world would they audit you if you overpaid?

function_seven3y ago

1 more reply

skeeter20203y ago

you can also claim refunds for years back; like an audit this is a 2-way street as well.

alasdair_3y ago

It isn’t equal however. If you underpay, the IRS has seven years to get the money. If you overpay, you have three. (Simplified of course)

j / k navigate · click thread line to collapse