He only made $2000 and put $3000 on his return for a little more money
2007-01-05 08:30:26 · 8 answers · asked by larrysi7 1 in Business & Finance ➔ Taxes ➔ United States
If this person works for cash and not on a W2 probably not. Unless the IRS decided to audit him. The chances are actually very slim with an imcome of only 3000. Why would the IRS take the time to audit him over that kind of refund?
2007-01-05 08:54:08 · answer #1 · answered by misskenzie12 2 · 0⤊ 0⤋
The IRS receives copies of all forms W-2 (for wage earners) and 1099 (for independent contractors that usually get paid in cash) that are issued to taxpayers. When processing a return at their service center a red flag will be raised if the amount being claimed as income does not coincide with their records. Often this might be resolved with a correspondence from the center asking the taxpayer to mail in documentation to support their income. Other times though, especially if the amount is large, it will warrant an audit. If an audit takes place, not only will the taxpayer have to pay back the credits if they cannot substantiate the inflated income but they will have to pay interest and penalties. Interest accrues from the time the return was supposed to be filed and since the IRS has a three window to audit a return you could be paying three years worth of interest compounded daily at approximately 8%.
If the IRS finds that you misused the EIC you will not be able to use it for 2 years and if they feel it was fraudulent you will loose it for 10 years. After the time period you have to apply for approval from IRS to be able to claim it again.
2007-01-05 09:48:29 · answer #2 · answered by The Answer Man 2 · 0⤊ 0⤋
Not if he is self employed but if he changed a W2, they will know. When you get yours, notice you get copies B, C and 2. Copy B is to file with the federal return, C is for your records and 2 is for the state. Guess where copy A went? To the IRS.
2007-01-05 09:25:00 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Yes a copy of the w-2 goes to the IRS with the tax return. when the numbers don't match up it will send up a red flag.
2007-01-05 08:34:19 · answer #4 · answered by jenluvsdrew 2 · 0⤊ 0⤋
The IRS will probably question it. Who can support a child on $2,000, much less the $3,000 he reported on his tax return?
2007-01-06 14:00:31 · answer #5 · answered by figment_usa 5 · 0⤊ 0⤋
They could if they decide to audit him. Otherwise, I doubt it since his income is so low.
2007-01-05 10:39:38 · answer #6 · answered by Steve 6 · 0⤊ 0⤋
doesnt have a w-2?
2007-01-05 08:32:56 · answer #7 · answered by Monkeylynn 2 · 0⤊ 0⤋
Since what was done was illegal, I certainly hope so.
2007-01-05 08:45:53 · answer #8 · answered by SDD 7 · 1⤊ 0⤋