The IRS is upgrading its tax system to make it more high-tech. The new computer-driven processing will assist the IRS in catching tax evaders, especially small businesses. According to a report, besides businesses, the self-employed are one of the biggest tax evaders.
Currently, the IRS is increasingly receiving tax returns electronically. As of now, "robo-audits" has helped discover tax fraud, but a large number of fraudulent tax returns still go unnoticed. It leads to a loss of revenue.
The new high-tech systems are expected to help the IRS catch big tax evaders, especially small businesses. As the IRS is always complaining about lack of human resources, the new system will make their job easier.
What's the Secret?
The IRS is not disclosing the details of the new systems it will be using. Tax experts are of the opinion that the IRS must not keep the technology a secret because it will need cooperation from taxpayers to make their upgraded programs a success. Judging from the success of electronic tax filing, the IRS might disclose which technology they are using and how it works later.
Myths, regarding how the new technology might "trigger" an audit, are going around the internet. Many have stated that a Facebook post could lead to an audit, or personal emails could result in an audit. Some believe IRS auditors will be able to scan through social media posts based on keywords about tax payments to get to tax evaders. However, these rumors have yet to be proven true or false.
The introduction of high-tech systems is just the latest step from the IRS to help discover tax evaders. It is expected to make it difficult for taxpayers to indulge and get away with tax fraud without punishment.