IRS Auditing process

[BIG NIGE]

How does the IRS decide who to audit, and what are my chances of getting audited?

Also what is the procedure when they audit you? And suppose I get audited but I haven't filed a return, what happens?

[tmfs]

I think they use one of these during their procedure

http://squarezero.org/blogpix/2006/rubber.jpg

[Micturition Man]

[ QUOTE ]
How does the IRS decide who to audit, and what are my chances of getting audited?

[/ QUOTE ]

To date I have not heard of a single online player getting audited.

I would think it's happened but doesn't seem to happen often.

[BIG NIGE]

DId I post this thread here or did it get moved? Either way, I'm kind of surprised if internet players don't get audited. Has anyone in this forum been audited?

[FatalError]

basically

step 1 you get a letter in the mail generally requesting some receipts and other documentation, if you have a well prepared response to this your audit may end here

step 2 face to face, you or your accountant will go heads up with an auditor who will do a more in depth analysis of your return requuest more documentation and often challenge many of your deductions. At this point you are almost never getting out of there without paying at least a decent chunk of change

step 3. if you get here you are in trouble, this is where the IRS forensic accountant begin the process of building a tax court case against you. This is the kind of disaster pretty much only in store for serious intentional tax evasion. They may place leins on your property and bank accounts, you may end of facing jail time if your crimes are serious enough

cliff notes
step 1 paper audit
step 2 in person audit, they use lube thankfully
step 3 tax court, no lube, gg life banruptcy time

[Poker CPA]

"And suppose I get audited but I haven't filed a return, what happens?"

You have problems. A large liability coupled with the right circumstances, the bigger the problem.

[BIG NIGE]

[ QUOTE ]
"And suppose I get audited but I haven't filed a return, what happens?"

You have problems. A large liability coupled with the right circumstances, the bigger the problem.

[/ QUOTE ]

The thing is, I don't have any income besides poker. I'm not employed. Therefore, if I ignore the poker income (overseas poker sites don't report to IRS), then I'm not obligated to file a return, right? So how does the IRS choose who to audit? What process do they use to decide who to audit and how do they find out someone who hasn't filed a return?

[frogfanatic]

If you do or don't have income you are still required to file a tax return. If you don't the big bad tax monsters will kick your ass.

[BIG NIGE]

Okay, so, I turned 18 in 2003, does that mean the past four years I could have been put in jail or fined because I didn't file a tax return despite being unemployed and having no income? Am I misunderstanding something?

[Poker CPA]

Am I misunderstanding something?

Yes, its called tax evasion and trying to figure the HOWs, WHATs and WHOs is tough. Try calling the IRS help line, because anyone helping you has problems too. At the very least, research the difference between "Civil" and "Criminal", and how "Willful" comes into play.

[Freyalise]

Your location says 'Liverpool, England'. Am I missing something?

There is no 'IRS' in England.

Gambling winnings are not taxable in England regardless of whether you are a professional player or not.

[Poker CPA]

IRS is everywhere