Too Big To Audit

Discussion in 'The Howard Stern Show' started by booybob, May 5, 2014.

  1. booybob

    booybob Well-Known Member Banned User

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    Must be nice, if you got over 100 MILLION the IRS won't audit you. they haven't audited a single return with income over 100 million SINCE 2002.
    this is not personal income only, it is business income as well.


    CNSNews.com) – In 2011, while the Internal Revenue Service (IRS) was busy scrutinizing the tax-exempt status of 100 percent of Tea Party groups and other conservative non-profits, the tax agency did not audit a single high-value electing large partnership (ELP) with more than $100 million in assets. That's according to a preliminary report released to Congress by the Government Accountability Office (GAO) April 17[SUP]th. (See GAO.pdf)[/SUP]

    An ELP is a business entity with more than 100 partners and more than $100 million in assets that is required to file a 1065-B tax return every year. They include large private equity firms, hedge funds and oil and gas partnerships.

    “No partnerships that filed a Form 1065-B from tax years 2002 to 2011 had their tax return audited and closed by IRS from fiscal years 2007 to 2013,†a footnote on page 14 of the GAO report stated.

    Jim White, a spokesman for GAO, confirmed that no ELPs were audited by the IRS between 2007 and 2013, the last year statistics are available. However, he pointed out that there were only 15 ELPs out of 105 filing 1065-B returns nationwide in 2011 that met the $100 million asset threshold.

    Another 2,211 partnerships filed under IRS Form 1065 in 2011, “but only 20 audits (or less than one percent) were closed that year,†White told CNSNews.com, acknowledging that “this is a very low audit rate.â€
    White noted that GAO is doing a follow-up and “will be asking the IRS a number of questions to try to better understand†the tax agency’s audit decisions.
    “These are the big guys,†said Amy Elliott, legal editor at the non-profit Tax Analysts, who pointed out that some ELPs have up to $20 billion in assets. “The IRS should be looking at them more.â€

    Tax Analysts put a video up on You Tube explaining why the IRS treats these large partnerships as essentially too big to audit.

    “So, were you the one that said at Tax Analysts that these are basically unaudited entities at this point, or ‘audit proof’ I guess was the word used?" CNSNews.com asked Elliott.
    “Right, I mean, I think there is a sense among partnership practitioners that these entities are essentially audit-proof,†she replied.
    “You know, it’s interesting, when I read the GAO report, I actually took issue a little bit with their $100 million asset threshold,†she continued. “I mean, yes it is the case that the larger the entity, the more you should argue that the IRS should look at it, because even if all it finds is a one percent adjustment, one percent on big ends up being a lot of money, as opposed to one percent on small.
    “But really, I mean, the audit statistics are so poor in this area that, you know, if they can only – and it takes a lot of resources for the IRS to audit a partnership – so if they can only audit, you know, five of them, of these large partnerships, they should get the really really big ones.â€
    ELPs - which Elliott says operate under “extraordinarily complicated†tax rules created by Congress in 1997 - were not even subjected to the same kind of scrutiny that the IRS typically focuses on similar-sized corporations.

    “The IRS will come in and ask questions, but they do not have to go through the kind of full-on audits that major C-corporations have to go through. A lot of these partnership structures are so complicated to unwind and figure out what’s going on that honestly, IRS agents wouldn’t know the questions to ask,†she told CNSNews.com.
    The GAO also reported that the average asset size of ELPs decreased from $2.5 billion in 2002 to $779 million in 2011, while the average number of direct partners decreased from a ten-year high of 973 in 2007 to 297 in 2011.
    Elliott agreed with White that the total number of ELPs is very small compared to other tax filers.

    “The caveat is that the number of electing large partnerships that the GAO looked at in their report, that had assets over $100 million, is actually tiny. There aren’t a lot of those entities to begin with,†Elliott told CNSNews.com. “The point I was trying to make, though, is that presumably these are entities that the IRS shouldn’t have trouble auditing. And you would think that it would want to audit at least one of them.â€
    CNSNews.com asked her how the agency could determine whether an audit would recover enough additional taxes to make it worthwhile without doing even one.
    “That’s a good question,†she replied.
    “To ensure compliance, the IRS has to have an audit presence everywhere….And they can’t audit everyone, so they kind of have to pick and choose, and have some coverage everywhere,†Elliott pointed out. “And I think the issue here is that given the size of these entities, the level of audit coverage…is so sparse that it begs the question.â€
    “If they did an audit that’s as in-depth and as comprehensive as they did in the C-corporation realm, if they did that kind of audit in the partnership realm, they’re going to find stuff…There are a lot of areas that are unclear or gray, and [tax] practitioners take advantage†of them, Elliott told CNSNews.com.
    “I don’t know that these partnerships are playing games. But I do know that it’s gotta be in the back of their heads,†she added. “B]There’s a lot of positions you can take in partnership tax law. The IRS should be taking the other side and they’re not, and the partnerships are not worried about it.â€[/B]
     
  2. Dump Button

    Dump Button Former Mall Security Guard

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    Partnerships don't pay tax
     
  3. Dump Button

    Dump Button Former Mall Security Guard

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    Audit those that do :grad:
     
  4. Brokenbad

    Brokenbad Well-Known Member

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    I so much want that to be the answer. LMAO on standby
     
  5. booybob

    booybob Well-Known Member Banned User

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    An ELP is a business entity with more than 100 partners and more than $100 million in assets that is required to file a 1065-B tax return every year. They include large private equity firms, hedge funds and oil and gas partnerships.
     
  6. NotMyBro

    NotMyBro VIP Extreme Gold

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    US is not a democracy, it's an oligarchy.

    http://www.bbc.com/news/blogs-echochambers-27074746

     
  7. Dump Button

    Dump Button Former Mall Security Guard

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    A partnership must file an annual information return to report the income, deductions, gains, losses, etc., from its operations, but it does not pay income tax. Instead, it "passes through" any profits or losses to its partners. Each partner includes his or her share of the partnership's income or loss on his or her tax return.

    http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Partnerships :coffee:
     
  8. PI Nate

    PI Nate Disenfranchised since 1984... Gold

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    Who has time to audit multi-million dollar entities? As someone said already, this administration was too busy using the IRS to stomp out political opposition...:grad:
     
  9. booybob

    booybob Well-Known Member Banned User

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    Everyone knows you can get more money auditing a 501C3 than you can auditing a tax return with 20 billion in income.:secret::rolleye:
     
  10. booybob

    booybob Well-Known Member Banned User

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    And the Russians.
    [FONT=Verdana,Sans-serif]AP ENTERPRISE: US to unleash IRS on Russian banks[/FONT]
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    [​IMG] [FONT=Verdana,Sans-Serif]Email this Story[/FONT]

    May 5, 1:59 PM (ET)

    By STEPHEN OHLEMACHER
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    WASHINGTON (AP) — The United States is deploying an economic weapon against Russia that could prove to be more costly than sanctions: the Internal Revenue Service.
    As the U.S. attempts to punish Russia for its actions in Ukraine, the Treasury Department plans to start using a new tax law to make it more expensive for Russian banks to do business in the U.S. Congress passed the law in 2010 to curb tax evasion through the use of overseas accounts.
    Starting July 1, the law targets foreign financial institutions that don't agree to share information about U.S. account holders with the IRS. Russia had been negotiating an information-sharing agreement with the U.S. But after Russia annexed Crimea and was seen as stoking separatist movements in eastern Ukraine, Treasury suspended negotiations.

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  11. PI Nate

    PI Nate Disenfranchised since 1984... Gold

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    [​IMG]
     
  12. Anyonenow

    Anyonenow Well-Known Member

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    Guess you missed this little Tidbit...

    .
     
    Last edited: May 5, 2014
  13. booybob

    booybob Well-Known Member Banned User

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    REALLY, read the first sentence that I wrote.:hat:
     
  14. Anyonenow

    Anyonenow Well-Known Member

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    It was meant for Pi Nate.

    Post fixed.:eek:
     
  15. Joe Bauers

    Joe Bauers Well-Known Member

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    It's only because , they can't count that high. :grad:
     
  16. Beth143nacho

    Beth143nacho Well-Known Member VIP

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    Obama cannot be that fucking stupid. He could be that pompous, however, that he believes he has more influence over Russian banks in America than Putin has over American businesses in Russia. Sure... Punish Russian banks... Then what? Blame the republicans because Putin shoved a sandy dick up the ass of businesses in Russia and got the Chinese to ask for the us to start paying back some of its debt?

    obama the shithead can operate with impunity as long as there are morons out there that believe the republicans are there to be blamed instead of being consulted.
     
  17. Lester

    Lester Well-Known Member

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    Why can't we just establish a flat tax and be done with the tax shelters and stupid corporate games?
     
  18. Shortwave98

    Shortwave98 A-Number 1 Banned User

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    PiNate thinks the last rain storm to hit his house is Obama's fault. Surely there was never a corrupt president before 2009!
     
  19. PI Nate

    PI Nate Disenfranchised since 1984... Gold

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    [​IMG]
     
  20. Shortwave98

    Shortwave98 A-Number 1 Banned User

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    I forgot to mention the stupid Obama dancing GIFs.

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