Did you read in the last few days that the new bill just passed will hire an ADDITIONAL 85,000 IRS agents!

Just keep good records.

Those that cheat are the ones that need to worry.

Out of curiosity, I looked up how much agents make.

Starting salary is about $16/hr. Median wage is about $25/hr.

Qualifications? "Internal Revenue Agent Basic Requirements for Positions GS-5 and Above. For entry at the GS-5 level, you must have a bachelor's degree or higher in accounting from an accredited college or university that included at least 30 semester hours in accounting."

I wrote this to another contributor here today, thought I would repost it here.

It was about paying cash for things:

Roy, I agree,..there is nothing illegal to use cash, nor there ever should be,.but it does make some IRS agents look at it with suspicion, AND they have the power to make life miserable, even if you do everything right.

There are gray areas, that can be used,..to pay less taxes, but those same gray areas are often used by the agents to charge you with more tax. (showing that their time wasn't totally wasted) I heard this from a lecture from a former regional head of the IRS.

I have been told by a few friends that were audited by the random audit (I can't remember the name of it rt now) but they use it for gathering general information,..not really being suspicious of any wrong doing,. but it's crazy long and complex and makes one go through hell, even if they find little,..

But they also try to apply a few gray areas to make the audit show something.

True most audits are fairly simple, but they still try to find a few little things. However, my concern is with these new agents being gung ho , and with perhaps a lot of time on their hands and trying to show what they can find,.justifying their existence .

I'm not sure how many agents are currently employed now,.but whatever that number is,get a map of the United States and add that number with an additional, 85,000 and put that number of black headed pins in that map,..its going to take you a while and really cover that map,..

$16 an hour AND pension AND cadillac health insurance AND total job security.

That showed up in the news as soon as the White House changed residents. They will be looking into how people spend their retirement income and if it's spent for business, it will be taxed more than if it is spent for living expenses. I split my banking into two separate banks. One gets my retirement and SS money and the other gets the rent checks and pays the bills for the business. If someone likes to inflict pain on old ladies, like me, they will be very sorry.

The current rate of audited tax returns in any given year is less than 1%. Of those that are audited, over 70% are for those with annual incomes of $250,000 single or $400,000 jointly filing.

They are doubling the number of auditors. So... Unless you're raking in the dough my guess is your chances of being audited even after this vast expansion are still somewhere between slim to none. Keep good records, don't do anything crazy, and if you get audited it shouldn't be a horrible experience.

Always keep in mind that if a tax deduction is disallowed, there is no penalty. You pay the tax and all is well.

I agree with Sid. Not a big deal and probably good in the long run.

A lot of people here love John T Reed and his Aggressive Tax Avoidance books. In one of those, when asked what he would change, if anything, when it comes to such things -- he answers that he would double the number of IRS agents and audits.

His point is that he's following the rules -- even if he is "aggressive" about it -- but there are lots of people who are not following the rules and paying their fair share. So he is in favor of more agents and audits -- even though he literally wrote the book(s) on paying less taxes.

I agree with John T Reed on that. This is a good thing.

John,

I agree. I have never done anything remotely sketchy so I’m not worried about an audit from a financial standpoint, only from the whole hassle/time factor.

I had a small business and our retirement account was audited by an incompetent, arrogant, unqualified IRS agent. She didn’t even know what she was auditing. I mean she was literally auditing our plan not knowing what it was and was insisting we were not in compliance because she was trying to enforce rules from a different kind of plan.

Of course in her mind I was the one who didn’t know what I was talking about. We had a Simple IRA plan and she was auditing it as if it was a SEP Ira plan. Big PITA. I called my plan administrator (Fidelity Investments) and they laughed, said they run into incompetent IRS agents all the time and concurred she was out in left field.

Had to elevate the situation to her supervisor to get satisfaction. Then I was put on the spot because he made us do a conference call, forced her to apologize and basically chewed her out with me on the phone. Like I had time to deal with this complete BS caused by an incompetent government official.

Exactly Jim. That’s my fear. The employees they have now are not competent. If they were there wouldn’t be a need to hire 85,000 more of them.

Besides my incompetent auditor, I had to fight them over a payment they said was made late. I sent two checks in with my return. They credited them on two different days stating one was late, therefore I owed a penalty. Nope. Funny how when it was all said and done the check they claimed was late they cashed before the check that wasn’t late.

I’m just one person who has never been found to have done anything wrong. And yet there have been multiple times I’ve had to explain simple to figure out things to them to make them go away. It’s frankly ridiculous that we are paying for this.