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IRS has new methods for identifying tax nonfilers

On behalf of Law Offices of Horwitz & Citro, P.A., P.A. posted in Criminal Tax Violations on Tuesday, November 22, 2016.

The IRS has developed a new strategy for identifying and dealing with those who do not file their tax returns. They are hoping to implement new strategies and systems that will collect some of the billions of dollars in tax revenue that have been lost.

If they are successful, this may result in a greater number of delinquency notices and criminal investigations. High-income nonfilers are more likely to see audits and criminal charges for failure to file tax returns.

Recommendations for discovering nonfilers came from the Treasury Inspector General for Tax Administration (TIGTA). They conducted an audit of current Case Creation Nonfiler Identification Process, which is mostly automated and designed to identify delinquent taxpayers.

The TIGTA released a report that documents programming errors in this particular system and recommendations for improvements. They found a sizable gap between the number of individuals who receive notice of delinquency and the number of taxpayers who are actually delinquent with their tax returns. The TIGTA recommended various changes to the IRS's collection function and information technology controls, tools and procedures to improve its nonfiler program. The IRS agreed to make these changes.

"With effective program management controls, the IRS can identify and address delinquent individual taxpayers with expired extensions of time to file," said TIGTA Inspector General J. Russell George in a statement. "This is essential for the high compliance risk area of nonfiling."

If you are behind in filing tax returns and are facing an audit or a criminal investigation for failure to file tax returns, you should consult an attorney experienced in defending criminal tax crimes. Contact the Law Offices of Mark L. Horwitz, P.A. to discuss possible defense options.

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