Wednesday, May 5, 2010
IRS To Closely Screen Farmers
Look for IRS to soon screen farmers more closely for unreported income and unfiled returns. A Treasury Department study of IRS correspondence with taxpayers found IRS examiners missed collection of over $16 million in 2007 in unpaid taxes of sole proprietors because auditors didn’t check for unfiled returns and unreported income. About 85%-90% of U.S. farms are sole proprietorships. However, doing those checks during a correspondence audit would slow things down. Instead, IRS will adjust its selection process to sift out returns likely to turn up such problems and send them to revenue agents, who can better handle such cases.