May 21, 2021 - Douglas Myser

How irs enforces tax laws. When thinking about how the IRS enforces the tax laws, most people think first and foremost of the dreaded A word, audit. But the IRS has many tools in its arsenal other than audit's to ensure compliance in the voluntary American tax system. In deciding which tool to ensure fairness while trying to be conscious of the taxpayer burden, IRS employees work to minimize the burden of our compliance actions. The compliance actions require different types of resources by the IR like Tax Examiners, Tax Compliance Officers, Revenue Agents and others. The time spent in resolving the compliance actions can vary form a few days to a number of years. There are also a number of compliance actions that do not require the IRS to review the books and returns in order to resolve the issue at hand. How irs enforces tax laws.

With the automated Under reporter Program, our computer systems match the income that a taxpayer reports on their tax return with information returns provided to us by third parties. If an individuals taxpayer declares less income on their Form 1040 than their employer says they earned on their Form W-2, the AUR program will detect this. An IRS Tax Examiner will then send a letter to the taxpayer informing them of the difference and will work with them to resolve the issue.

We often speak with taxpayers who deal with corrupt employers, who send them W-2s that are much higher than the income they actually received. The employer does this to lower the taxable income of the company they run. IT happens often where an employee is leaving the company to move across country, and the employer figures that by the time they find out, it will be difficult for them to straighten it out. In this case, back tax help is usually needed by the taxpayer, as it can be difficult to get fixed. These issues often take time to fix.