Check it out. The IRS efforts to nab unreported income represents the largest component of tax avoidance and tax fraud. Look out, because now the IRS has developed a new tool for identifying returns with a high probability of unreported income. If you hang around these tax lawyer blogs long enough you’ll probably hear of the DIF score assigned to tax returns person by person in order to pinpoint returns ripe for audit. But what you probably haven’t heard of is the new computer algorithm called the Unreported Income Discriminal Index Formula (UI DIF).
Traditionally all U.S. returns are assigned a DIF score that ranks the possiblity of inaccurate information on the return. But this new UI DIF takes this computer magic one step further: the UI DIF rates the probability of income being omitted from the return. Ouch! The IRS has customarily used indirect examination methods to identify unreported income, but until now has had no systematic scheme for locating such revenues. UI DIF levels the playing field, giving the IRS the ability to systematically identify and kick out for audit returns at high risk for unreported income and today all returns receive a UI DIF score in addition to the customary DIF score.
Tax audit representatives and tax audit lawyers alike are beginning to see more and more returns under audit with the main thrust being bank acccount analyses that seek to examine bank account deposits versus income tax income. Call John Ellsworth of IRS-SOLV today if you have unreported income. Let John help you address this issue before the IRS police come knocking at your door!