Go Audit Yourself

          Take any Shakespearean play of the tragedy variety and you already know the outcome. At the height of his treachery the villain is forced to confront his own humanity and to perish with friends and loved ones shedding a questionable tear. In 2016, the Internal Revenue Service started a program of on line self-audit. It was actually an online audit program where individual taxpayers were able to use an online portal to communicate with the IRS. The program allowed documents to be attached and answers to questions posed by examiners to be posted. Imagine the cost savings to the IRS in this kind of program. Add this to the service’s own data mining which will expose suspicious activity and identify cases for possible audit and you can almost see the future. This program was a mere test of the online audit concept. Surprisingly, many taxpayers said they were satisfied with the program. They have course could’ve been the taxpayers who gave the right online responses.

NJ Amnesty Program

         Everyone is in the data mining business these days. The state of New Jersey is no different. In the last several months its computers have been whirling to create a list of taxpayers that could possibly owe more tax or tax returns. Then unaided by human eyes the machines themselves sent out notices to taxpayers declaring that “our records show you owe taxes or need to file delinquent returns.” Without even a touch of a button, taxpayers across the state received these notices whether they were warranted or not. Just think about it, what a great way to raise revenue by making taxpayers think the state is on to them. Of course I’m talking about the New Jersey Amnesty Program. And if you haven’t read about it in the paper, seen it online or slapped on the sides of public buses you have probably been residing on the moon. Like the flyers you get from Kohl’s or Macy’s it was almost like a one day sale. Under the Jersey plan, which ran for 62 days from November 15 to January 15, the tax division was willing to waive penalties and 50% of the interest for eligible taxpayers who enroll in the amnesty program… and pay up. Naturally the suggestion is that if taxpayers don’t come forward themselves they soon will be found in the state audit grinder. That of course remains to be seen. If you are just getting wind of this program go to tax amnesty.nj.gov to find the elaborate application guidelines and FAQs. You know if you have been running from the tax authorities whether state or federal it may make sense to come forward anyway even if you are outside the amnesty program. These tax agencies are going to get a lot better in detecting tax violators of all kinds as data mining becomes a recognized national sport. As you are well aware, privacy is dead.