The Tax Questions Blog

Archive for October, 2009

Question: The IRS discontinued random audits in 1988.?

The IRS discontinued random audits in 1988. Instead the IRS conducts audits on returns deemed questionable by its Discriminate Function System (DFS) a complicated and highly secretive computerized analysis system. In an attempt to reduce the proportion of “no-change” audits (that is m audits that uncover that no additional taxes are due), The irs only audits returns the DFS scores as highly questionable. The proportional of no change audits has risen over the years and is currently 0.25 .Suppose that you select a random sample of 100 audits. What is the probability that the sample has

A – Between 24% and 26 % no change audits

b- between 20% and 30% no change audits

c- more that 95% no change audits

Answer: You are not serious right? Whatever you are studying, obviously you are not good at it. This question can't get any easier. I'll tell you it's not c.

IRS proposes new registration, testing and continuing education requirements

The Internal Revenue Service kicked off the 2010 tax filing season today by issuing the results of a landmark six-month study that proposes new registration, testing and continuing education of tax return preparers. With more than 80 percent of American households using a tax preparer or tax software to help them prepare and file their taxes, higher standards for the tax preparer community will ...

Audit Reconsideration

Question: If my fiance owes money to the IRS will it affect me if we marry?

My fiance owes roughly $50k to the IRS for tax returns that he did not submit for the last 10 years. If we marry, will I be held liable for his taxes previous to our marriage?

Answer: if you file married on your return then yes they will take the refunds for all back offsets due you will need to file for a "injured spouse" and be able to get your half back

The top South stories for 2009

The new year 2010 has a certain ring to it, doesn't it?

Barbara Boxer on gay marriage + Vote No on Prop 8

Question: I sold my 5 year old car in 2006. How do I report this to the IRS?

I sold it for $3500, but kelly bluebook said it was worth $6400. It was paid off. Do I report this as "other income" on line 21? Report it in a schedule d? Is it taxable at all since I sold it for less than it was worth? How does this work?

Answer: If you made a profit selling it (ie - paying $1000 for it and selling it for $3500, you then earned an income of $2500) Profit = Income, and only income is taxable. Its rare that the sale of a car, you purchased, will result in a profit, considering how car depreciate in value.

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