April 30, 2024 • 29 mins
In this episode, hosts John and Chris dive into the often overlooked, yet insightful, Internal Revenue Service (IRS) Databook. The conversation opens with a spotlight on the importance of understanding IRS operations and statistics that can empower taxpayers to minimize their lifetime taxes legally and ethically. Discover key trends in electronic return filings and insights into IRS auditing practices that every taxpayer should be aware of.
The episode unpacks the IRS's processing of 271 million tax returns and the significant shift towards electronic filing, with over three-quarters filed electronically. Chris and John highlight the three states with the highest federal tax payments, namely California, New York, and Texas, offering a glimpse into the geographical dispersion of tax contributions. They also dissect the IRS customer service complexities, emphasizing the challenges faced and the agency's efforts to improve response times.
Key Takeaways:
- The IRS Databook provides a transparent look into IRS operations, shedding light on filing trends and enforcement actions.
- Over three-quarters of tax returns are now filed electronically, marking a significant shift in taxpayer behavior.
- California, New York, and Texas are the top contributors to federal tax revenue, indicating regional economic influences.
- The audit risk for individual taxpayers remains relatively low but increases significantly with higher income levels, especially for incomes over $1 million.
- Taxpayer Advocate Service is a resourceful component of the IRS aimed at helping taxpayers resolve issues efficiently.
Notable Quotes:
- "We're gonna look at something, as I mentioned here in the intro, you probably didn't even know exists on this planet we call Earth." - John Tripolsky
- "Tax agencies are your involuntary business partner." - Chris Picciurro
- "If you owe a refund or have any type of correspondence or case going with IRS and you are found to be correct, they will pay you interest on that balance due." - Chris Picciurro
- "The audit risk for individual taxpayers is technically 0.44%, or one in 200." - Chris Picciurro
- "If you're getting audited, you're probably gonna get additional tax assessed." - Chris Picciurro
Referenced Resource (IRS Data Book)
https://www.irs.gov/pub/irs-pdf/p55b.pdf
Episode Sponsor
Sunsets & Dinks
www.teachingtaxflow.com/pickleball
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Intro (00:04):
Welcome to Wthe Teaching Tax Flow podcast, where the goal
is to empower and educate you tolegally and ethically minimize
taxes paid over your lifetime.
John Tripolsky (00:17):
Hey, everyone, and welcome back to the Teaching
Tax Flow podcast, episode 81today. We're gonna take a look
at something you may not evenknow exist. That's the IRS, the
Internal Revenue Service, databook. So before we jump into
that, as always, let's take abrief moment and thank our
episode sponsor.
Ad Read (00:36):
Hi. Chris Picciurro here, founder of Teaching Tax
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John Tripolsky (01:35):
So welcome back everybody. We already know that
this is your favorite taxpodcast. Hopefully, your
favorite podcast of any that areout there. And today we're gonna
look at something. As Imentioned here in the intro, you
probably didn't even know existson this planet we call earth.
Heck, you might not even likeanything that the IRS puts out,
but I can almost guarantee thatwhat we're gonna talk about
(01:58):
today is gonna surprise you.Maybe for the better, you know,
maybe you'll be a little PO'd,but who knows? Regardless, we're
gonna hit you with some great,great numbers that the IRS put
out in their data book for 2023.But I guess we need to invite
this guy back again consideringit is his show, Chris Pacuro,
the bald and beautifulgentleman. How are we doing
(02:20):
today?
Chris Picciurro (02:22):
I am great. The bald and beautiful, was that a
sit was that like one of thoseraunchy TV series they were on
during the day, or was that theBold and Beautiful? I don't even
know what they those what werethose called again? They're,
like, not sitcom. They're,
John Tripolsky (02:38):
soap operas. Right? Soap operas.
Chris Picciurro (02:40):
Yeah. I I think we should make one the Bald and
Beautiful, not just the the thethe bold and beautiful. John,
speaking of handsome bald men,which I am not included in that
population, you were recentlyvisiting, here down in gorgeous
in historic Franklin, Tennessee.You were kind enough to attend
(03:00):
my youngest son Luke's travelbaseball game, and there is a
very, very nice gentleman that'sa father of one of the other
kids that is also has a baldhead and an olive complexion,
and him and I sometimes getmistaken for each other. In that
particular day, we had the exactsame attire on, black shorts and
(03:25):
a gray t shirt, And, and thenthere's another gentleman that
had the same haircut.
John, we had we were having aconversation, 4 of us, where you
were the only one with the withhair, and and we know that you
have an amazing mane.
John Tripolsky (03:37):
Oh, and but, honestly, you know what? And
it's funny because your wife hadpointed that out, and, yes, the,
the fellow father of that greatguy, ironically enough, he's
from the same area that I livein. But you know what I really
felt like there? And you knowwhat? We can tie this into the
IRS.
Right? Sometimes people are veryuncomfortable with, you know,
what you know, whose team is theIRS? You know? Oh, you know, the
(03:58):
Internal Revenue Service.They're out to get all my money.
You know, I wouldn't really sayuncomfortable. When I was
standing there talking to youguys, I kinda felt like I was at
a mister Clean convention. Youknow, it was, it was very
interesting. But
Chris Picciurro (04:11):
well, I'll take it because Mr. Clean is a
John Tripolsky (04:13):
great company. So he's a studly guy, and he
cleans crap up. So on that noteWell,
Chris Picciurro (04:19):
I don't know about cleaning things. Thinking
of cleaning up cleaning upaccounting records sometimes
when they're messy, our our teamdoes that. IRS data book. This
is so let's talk about the IRS.John, we had an episode where we
were talking about quarterly taxpayments and extensions and how
it's weird the IRS calendar.
I don't know if you rememberthat. But what's important to
understand is the the federalgovernment's fiscal year end is
(04:41):
September 30th. That's why thesewacky quarterly payments are
October, January, April, andSeptember. They want that 4th
quarter payment on the booksbefore they wrap up their fiscal
year end. So with the IRS beingpart of the federal government,
their fiscal year end is alsoSeptember 30th.
So right about this time ofyear, they issue their data
(05:04):
book, which is an amazingresource. I bet and, yeah, it's
94 pages. Couple couple fluffpages in there. So that not
necessarily the most lightreading. Although, John, I I bet
your dad woulda liked this book.
I don't know why.
John Tripolsky (05:17):
He would love it. He would love it. But you
got
Chris Picciurro (05:19):
a bunch of graphs and and borderline
spreadsheets. So
John Tripolsky (05:22):
And I have to be honest. I haven't seen one of
these from many years prior, butI'm sure, you know, as time has
passed, I think it's safe to saythat this data book has probably
been modernized graphically in asense. Right? I'm I'm sure 10
years ago, this thing lookedlike it was spit out of a DOS
program or, you know, LotusNotes or something like that.
Chris Picciurro (05:43):
Yeah. It was probably not the most fun to
read, but it is on the IRSwebsite. It's gonna be on the
show notes. But what one thingthat tax professionals, we have
to understand, and taxpayers,you need to be leaning on your
tax professionals, is that partof teaching tax flow, we have 3
laws. One of them that wesometimes don't talk about
enough is that but we do talkabout it sometimes.
(06:03):
Tax agencies are yourinvoluntary business partner. So
the cool thing is if if youthink about a football game,
each football team has their ownplaybook. This is your
opponent's playbook. We getaccess to it. This is an open
note test you're taking, people.
So understand what's in thisdata book because this if you
read through this, this is gonnatell you where the IRS
(06:25):
enforcement areas are, how manyreturns are filed, what they're
looking at revenue wise. And,again, you know, figuring out
the IRS, yeah, they they are ourinvoluntary business partner,
but but you also have tounderstand what they're what
they're looking at. So in thefirst part of today's, podcast,
(06:46):
we're gonna talk about justreturns filed. So remember, this
is from the fiscal year for theIRS, so the 12 months ending
September 30, 2023. And, the IRSis a very is a very busy
organization.
They processed about 271,000,000tax returns on supplemental
(07:12):
documents. That is a ton of taxreturns. So 271,000,000 of
those. Out of those, 213,000,000were filed electronically. So
over 3 quarters of these returnswere filed electronically.
Now these returns include,individual returns, employment
(07:35):
tax returns for your 9 40 ones,your w twos, your business
returns, so your corporation,your s corp, your partnerships,
and then the state gift taxexempt organizations. But 3
quarters of the returns arefiled electronically. And
interestingly enough, 9 over 90%of individual returns were filed
electronically. So IRS, in theireyes, and I agree, are
(07:59):
succeeding considering that 90%of individual returns, which
makes up about a 150,000,000 ofthe 271,000,000 returns are
filed electronically.
John Tripolsky (08:12):
And, Chris, a question for you. So I I agree
with you a 100%. I think that isa huge win on the proverbial
scoreboard for the IRS justgetting, you know, the
population to migrate towardsthe we'll call it a com
comfortability withelectronically falling. I mean,
I'm sure my dad went kicking andscreaming. I'm sure he still
does every year.
I love that guy by the way. Hedeals with me, But here's a
(08:34):
question for you too. I mean, doyou foresee it somewhere in the
semi near future where the IRSwill just say, hey, we're not
accepting anything that's notelectronically filed, or do you
kinda see that maybe alwaysbeing a thing? And, you know,
what what do maybe some of thoseold fashioned paper ones look
like? Do you are are taxpayersrequired to mail in certain
(08:57):
types of those, say, amendedreturns or anything like that?
Or
Chris Picciurro (09:00):
Yeah. The so it's nice now that amended
returns just over the last yearand a half or so. Now we can
file on the personal sideelectronically before they had
to be mailed in. Some returnshave to be mailed in. I don't I
think it would probably take afederal law to require a return
to be filed electronically.
So the I r but what the IRS isdoing is because of the delays
(09:22):
in processing paper returns andrefunds, they're forcing people
to file electronically withoutmaking them file electronically,
if that makes sense. Right. Sohere's an interesting one
though, John. Now we know thatwe talk about certain states
quite a bit, in the in on thispodcast. We talk about state
income tax.
But the IRS there are 3 statesthat topped the IRS collections
(09:45):
for most tax before issuingrefunds. So what states in the
country are paying the mostfederal tax? I'm ready for my
drum roll.
John Tripolsky (09:57):
I think I have no drum roll.
Chris Picciurro (09:58):
Oh. Your drum rolls on this podcast.
John Tripolsky (10:00):
We should. You know what? Here. We'll we'll
take a little pause here, and,you know, we'll edit 1 in
editing. So 3, 2, 1.
Chris Picciurro (10:09):
Okay. There's your drum roll. There you go.
Awesome. So here they are.
California, your best friend,New York, and Texas. Those 3
states paid the most amount offederal tax. So very
interesting. Very, veryinteresting statistics. Now, so
(10:32):
electronically filed returns areon the rise.
We have out of the individualtax returns. So let's talk about
the 163,000,000 individual taxreturns. Okay? About half of
them were were filed bypractitioners, so paid
professionals online. Prettymuch paid professionals have to
(10:54):
file online.
So 50% of the individual returnsof the 163,000,000 individual
returns are filed by paidpractitioners. A little over
50%. 15,000,000, remember wesaid about less than 10% were
filed via paper. Only 3,000,000were filed online using a free
(11:14):
file. I found that interesting.
I thought that would be a lotmore. The IRS does have some
free e file opportunities righton their website, And then their
other online filed is61,200,000. What does that mean?
Those are your self prepared. Sovery, very interesting that
you've got 85,000,000practitioner online filed, other
(11:35):
online filed, which would meansomeone using some type of self,
self prepared software,61,000,000.
And, but I would say that's awin for the IRS to have over 90%
of tax returns electronicallyfiled. Absolutely. Heck, yeah.
John Tripolsky (11:53):
I mean, that just think about the number of
trees that they're saving forfor lack
Chris Picciurro (11:58):
of better terms. Right? Think about yeah.
There there's so many
John Tripolsky (12:01):
The postal service is probably pissed. But,
you know, it it is what it is.
Chris Picciurro (12:05):
That's true. Gosh. I wonder how much revenue
the postal service has lost overthe last 20 years by not not
having returns filed. So I
John Tripolsky (12:12):
mean, heck. Think about it. Right? Let's say
everybody did it on paper. We'llwe'll call it a a dollar to mail
in, which it's probably morethan that because you're
probably mailing a the packet ina sense.
I mean, that's over$200,000,000.
Chris Picciurro (12:24):
Mhmm. Right? Exactly. I I agree. Now the IRS,
is requesting additional fundingto service their taxpayers.
So part second part of this thatwe wanna talk about today are
there's something called thethe, you know, taxpayer bill of
rights and the taxpayer advocateservice, which is an independent
organization within the IRS.We've had people go to that
(12:46):
advocacy. Actually, John, not toget personal, but I believe
you've had a run-in with the inin a positive way. Yeah. It was.
Advocate server.
John Tripolsky (12:53):
And if anybody, you would so one thing, Chris,
that I was really surprised ofthat. A, it was I didn't even
know they existed. Right? And, Imean, we were without going into
a massive amount of detail, wewere just trying to make a
simple change where there was aa boo boo that was made, really
on their end because they saidit what whatever. They said they
didn't receive it.
Back to the paper trail, that'sa that's a great example. Right?
(13:15):
When you mail something and theysay they don't get it. But,
yeah, the that advocate service,I was so surprised how efficient
they were with one thing, butalso it was you know, once once
I got connected with them,again, not even knowing that
they existed, that was I mean, Iwish they had, like, classes and
courses for companies that runas efficient as, won't say your
(13:39):
last name, but I believe it wasKaren out of Detroit. Fantastic.
That's right. Yeah. It wasreally good. They're very
helpful. And and it's not like,you know, you're stuck in a
corner with them.
Really, they I mean, I felt thatthey were truly on my side.
They're like, let me let me geta solution for this. You know,
they have they have our ear, butit was great. So
Chris Picciurro (13:58):
Yeah. The IRS I mean, the the challenge is is we
is especially there's a there'sa bat line I call. There's a
paid practitioner line for theIRS as CPAs, enrolled agents
that we can call. And and youhave to identify yourself. You
have to tell them what your PTINnumber is, and they have to
verify you and you get get buteven there, we would you know,
there's practitioners that willwait on hold for for an hour,
(14:19):
hour and a half, and then thecall just gets dumped.
So the IRS knows that's aproblem, and they are working to
try to get those lead times asas as short as possible. Service
to taxpayers, John, here'sinteresting. How many without
looking at the report, how manyIRS website, page views do you
think they had in the fiscalyear?
John Tripolsky (14:40):
Oh, alright. I'm I'm really not looking at it. I
promise.
Chris Picciurro (14:44):
Page views. Man. Iraps dotgov.
John Tripolsky (14:48):
I'm just I'm just guessing. We're gonna say
Chris Picciurro (14:53):
100,000,000? No. Over 3 and a half
1000000000.
John Tripolsky (14:57):
Holy cow. Okay. Alright. That's a lot of refresh
button.
Chris Picciurro (15:01):
That's a lot. Yeah. So imagine. Anyway, they
are they are, they are slammed.They are trying to catch up with
cases.
I mean, the pandemic put the IRSbehind almost a full year. And,
you know, we try but it'sfrustrating for clients. Right?
Because our like, I can't tellyou how many letters that our
clients receive on our privateCPA practice when we're trying
(15:22):
to resolve an IRS issue thatbasically says IRS is saying,
hey. We know you've got anissue.
We'll get to it in the next 60days. And then they get another
letter, you know. So it'sfrustrating. Now I would say if
you if you owed a refund or haveany type of correspondence or
case going with IRS and you arefound to be correct, they will
(15:43):
pay you interest on that balancedue. So that's that's the
positive.
John Tripolsky (15:50):
The number of patriots, though, honestly, I
mean, that's kind of anotherkudos to the IRS as as an
organization in a sense becauseif they're getting that much
traffic, that must well, itcould go either way. Right? That
must mean that they either, a,have a lot of resources that
people know they can find, orthey have a lot of resources
that people can't find, and theyspend a lot of time searching
(16:12):
for them. So either way of it, Imean, I think that goes hand in
hand and and really a directcorrelation with the number of
people that are comfortable oror just frankly submitting
electronically. Now they're, youknow, maybe going to I mean, not
bypassing their CPA or their taxpro at all, but maybe they're
doing a little bit more kind ofself, discovery.
(16:33):
So a little bit more research ontheir end, which is great, my
opinion.
Chris Picciurro (16:37):
Yes. I mean, they they know there's an issue,
but, again, they they I was veryfortunate to be on the Intuit
tax council for a few years. Ithink it was, like, 20 oh, gosh.
I don't have my I don't have mynice plaque out that they gave
me. I appreciate it, though.
Like, 2017 to 2020. But part ofthat, we got to go to
(16:58):
Washington, DC. We got to meetwith the leadership within the
IRS. And part of the issue istheir software is so old. Their
platform's so old.
They've gotta concern themselveswith data security. Changing
that juggernaut is a massiveundertaking. And constantly with
with all these returns gettingfiled, it's challenging. But
probably the thing that mostlisteners are are interested in
(17:21):
and why they tuned in other tohear about our kids' travel
baseball teams and how how niceyour hair is, the compliance
present of the I presence of theIRS. Who is the IRS auditing?
What are they doing to enforce?Remember, IRS is a collection
agency of tax for tax. So theyhave field examinations,
(17:44):
meaning, hey. I, you know,that's like what you would call
an in person audit. Okay?
They have correspondenceexaminations. That means we're
auditing you. Here's a letter.Submit all your stuff to us, and
we and we'll human will look atit. And they have under
automated under reportingnotices.
(18:04):
A lot of those are called CP 21000s where it says, hey, John.
We see that you, you forgot topay tax on this 10.99, and and
here's the tax and, you know,and maybe they're right, so you
you just pay it. And then theyhave some automated substitute
for return in revenue. That'ssuch a small amount, but the,
(18:25):
the IRS really generates most ofits tax assessments and revenue
from field examinations.
John Tripolsky (18:31):
Hey, Chris. I'm gonna quote, Andrew Pulo. So
he's been a guest a couple timeswith us here on the podcast
where we're really I think, youknow, the first one, I believe
we, referred to the IRS as DarthVader. And Andrew is probably,
you know, obviously, besidesyourself, I think Andrew is
probably the most in tune withthe directly with the IRS, out
of any person I've ever met. AndI'm gonna quote him what I think
(18:53):
he said, but maybe I'm adding alittle bit of flare to it,
earmuffs for the children.
But I think he referred tosomebody that gets a c p 22,000
or 200 as just open the damnletter. Really? Just don't let
it sit there. Just open it. Itdoes you no good leaving the
envelope sealed in your incomingmailbox on your kitchen counter
when it's something easy thatyou can solve.
(19:15):
So that was a great episode wedid.
Chris Picciurro (19:16):
And so, yeah, Andrew is amazing. He's helped
out with within teaching tax, soa lot of the people in the
community. But understandingthere are different types of
examination. So let's take alook at some of the raw numbers
the IRS has, displayed in theirdata book. So for the for tax
returns basically for the last 8years, tax years 2013 through
(19:38):
2021.
Now remember, there's a statuteof limitations of 3 years. So
you're always looking back ayear or 2, when we look at these
these audit numbers. But forthose tax years, the IRS
examined less than a halfpercent of individual tax
returns filed and less than 3quarters of a percent of
corporate returns filed. So yourraw audit risk is technically
(20:02):
0.44% or 1 in 200. Alright?
That
John Tripolsky (20:06):
And that's actually a good number to hear
because I know some people, atleast ones that we talk to.
Right? Individual taxpayers,business owners, the the fear of
higher powers is put in themthat they're gonna be audited.
Right? So that right there is avery, surprisingly, a very small
number.
Obviously, it probably hassomething to do with staffing as
well on the IRS's side, but,like, you said it, your your
(20:28):
audit risk is is pretty low. Itall in all,
Chris Picciurro (20:32):
it is. Now I do wanna throw a couple things out
there. Tax year 2019 is the mostrecent year outside of our
current statute of limitations,so that that's a really good
number. The exam coverage ratefor tax year 2019 for individual
taxpayers with income of over$10,000,000, again, not a big
percentage of people, was morethan 11%. For taxpayers with
(20:57):
$5,000,000 to or 5,000,000 to$10,000,000 of income was 3.1%.
For taxpayers over, 1,000,000 upto $5,000,000 was 1.6%. So just
to put it in perspective, onceyou get to a $1,000,000 worth of
income, your audit risk triplesjust by raw numbers. Once you
get to $5,000,000 of revenue,you're out up to 10,000,000,
(21:19):
your audit risk is 6 timeshigher. And then once you get to
over 10,000,000, your audit riskis 20 times higher than just a
raw number. Now it's still arelatively small number, but
that just gives you an idea ofof those you know, what those
percentages are.
And we've had some really goodpodcast content on how to avoid
(21:40):
an IRS audit before it's anaudit. Right? Make sure you're
reporting your income. Make sureyou're tying out your
transcripts and what'shappening, addressing all the
forms that you that youreceived. So
John Tripolsky (21:52):
And, really, why do you think that may be I'm
sure it's not a a known answer,but, you know, the the higher
income. So say we're eventalking, you know, that
1,000,001 to 5 and then, youknow, 10 and over. Is it really
do you think because they justlook at that as, like, alright.
We need to look at that morein-depth, or is it really just
checking a lot of boxes when itcomes to complexity naturally?
Chris Picciurro (22:15):
Right. Obviously, the the the numbers
are higher. So if you havesomeone, let's say, that has
10,000,000 $11,000,000 of netincome and IRS disputes a a a
$100,000 deduction, okay, thatrevenue would be probably about
34, not 35 to $40,000 of incomefor the IRS. If someone has a
(22:35):
$100,000 worth of net of incomeand for some reason the IRS
disputed a $30,000 deduction,there's not much juice in it for
the IRS. There's not you know,now obviously if someone's self
employed, that increases theiraudit risk as well, But but
those are that's what IRS islooking at is, of course,
they're gonna examine the themore the higher income taxpayers
(22:56):
because there's more tax to, youknow, to collect.
It's a higher percentage. Yourmarginal tax rate is higher.
Which ties directly into, you
John Tripolsky (23:06):
know, what you mentioned again earlier in the
show on this one specifically,you know, the IRS being your
involuntary business partner.You know, that's it's pretty
important to remember. Right?It's the internal revenue
service, not the internalcharity service. Like, they need
to make money.
And as you know, we talk aboutthis on almost every show or at
least every other one. So peoplewho've been listening to this
now for well over a yearprobably tired of us saying
(23:28):
this, but it's totally true thatif you don't pick your tax, the
IRS will, and they're not gonnapick it in your favor. So tax
planning and strategy, all thatputs all of the kinda all the
chips on the table, but you'rein control of them.
Chris Picciurro (23:42):
So I would agree. And and when we look at
in let's focus on individualincome tax returns for the the
2013 to 2021 if we're looking atexamination, percentage. Okay?
In general, if you look at thatperiod of time for all the
returns filed, it's a very smallpercentage. If your income is a
(24:05):
$100,000 or less, and let's sayyou're not self employed, your
chance of getting examined isabout 1 tenth of 1%.
So there you you really gottalook at and, again, that doesn't
give you a a you know, John, alot of cars cars speed down next
highway. You can't give everyonea speeding ticket, but you
(24:27):
certainly don't wanna be the onegetting you a speeding ticket.
John Tripolsky (24:30):
Right. Wait. Like, you know, you stand out
more if you slowed down at leastin Michigan. Right? If the speed
limit's 70 and you're doing, youknow, 82 and everybody else is
doing 90, you know, you looklike the idiot.
They might pull you over. Butanyways, anybody that's from
Michigan will completely agreewith that one. It's more
dangerous to drive slow.
Chris Picciurro (24:48):
And here's the other thing, talking about
getting pulled over, I'm gonnaclose with this statistic. And
when we you know, if you'relistening to this, we don't work
we wanna remember, legally andethically reduce the tax you pay
in your lifetime, we want you tofile a compliant return, but we
want you to file a return thatyou're paying as little tax as
possible. Let's put a bow onthis out of the the 2013 to 21
(25:10):
individual returns examined,okay, the total amount,
1,600,000 of those had arecommended additional tax.
50,000 of those had a no change.Right?
So the point is your chance, ifyou get examined, of having a no
(25:34):
change audit is very small. Infact, it's about 3%. So if
you're getting audited, you'reyou're probably gonna get
additional tax assessed. Andthat's 3% of the small portion.
Exactly.
John Tripolsky (25:51):
And not saying it would be a lot. Right? It
might be something small. Itmight be, you know, something
huge. Well, I know, Chris, thisthing, as you mentioned too
earlier on, 90 plus pages.
So if you are in the bathroom alot, you know, print this off.
Maybe you can do a page a day orsomething. Or if you're like,
Chris, you already know thisthing really page to page. But
(26:13):
again, as we kind of opened up alittle bit with, right, this is
something that a lot of people,myself included until it was
introduced to me by Chris, youdon't even know exists. I mean,
it's not like this is a secreteither.
This is basically, you know, asthey call it their their data
book. I kinda look at it as moreof, like, alright. It's an IRS
fact sheet. It it hits all thesenumbers in there. It's actually
(26:35):
laid out very, very nice andeasy to follow.
So if you were interested in onesection over the other one, you
can see exactly where to go.It's a PDF. You can skip right
through it. But I know, Chris,before we do wrap up here too, I
imagine we're gonna revisit thismultiple times throughout the
year, either in sections ormaybe we, you know, do another
show here in a couple months orso, and and we hit in some
(26:56):
little specific. But on thatnote too, if you are or if you
do take a chance and you look atthis data book, again, links in
the show notes right there foryou.
Breeze through it. If there'ssomething that interests you
more than something else, dropus a line. We'd love to explore
a little bit more in-depthbecause it is it gets a little
heavy in some areas or maybe youeven just have a a question. I
(27:17):
guarantee that we are moreresponsive than the IRS. So if
you do have a question on this,ask us.
Drop it in our Facebook page,for teaching tax flow and
defeating taxes at privateFacebook group. You as a
listener are always invited tojoin in there as well or shoot
us an email. Either or, we'd behappy to explore some topics. So
as we close out with, as always,next week, same time, different
(27:41):
topic here on the Teaching TaxFlow podcast. Hey, everybody.
Johnny here from the TeachingTax Flow team still here.
Hopefully, you found this show alittle bit more interesting than
all the numbers that areprobably laid out in that IRS
data book. But I'll keep itshort and sweet to wrap this up
(28:03):
even more. Again, please take alook at any of the offerings or
any I shouldn't say offerings.Any of the statistics, any of
those numbers that are in thatbook, and drop us a line.
Disclaimer (28:14):
Again, we'd love to look at them with you. It's not
saying you have to go onFacebook, put your name, put
your business, put everythingout there, but again, just shoot
us a message, or you can even goon the page or in the private
Facebook group and do itanonymously, if you did have a
question. So as always, wealways invite you to do so, and
we will talk to everybody verysoon. The content provided is
(28:37):
for educational purposes only.We encourage you to seek
personalized investment advicefrom your financial
professional.
For all tax and legal advice,please consult your CPA or
attorney. Investment advisoryservices are offered through
Cabin Advisors, a registeredinvestment adviser. Securities
are offered through CabinSecurities, a registered broker
dealer. The content of thispodcast does not constitute an
(28:57):
offer of securities. Offeringscan only be made through an
offering memorandum, and youshould carefully examine the
risk factors and otherinformation contained in the
memorandum.
Welcome to Wthe Teaching Tax Flow podcast, where the goal
is to empower and educate you tolegally and ethically minimize
taxes paid over your lifetime.
John Tripolsky (00:17):
Hey, everyone, and welcome back to the Teaching
Tax Flow podcast, episode 81today. We're gonna take a look
at something you may not evenknow exist. That's the IRS, the
Internal Revenue Service, databook. So before we jump into
that, as always, let's take abrief moment and thank our
episode sponsor.
Ad Read (00:36):
Hi. Chris Picciurro here, founder of Teaching Tax
Flow, cohost of the Teaching TaxFlow podcast, and pickleball
enthusiast. Yes. If you listento the podcast, you know almost
every episode we talk aboutpickleball, the most popular and
growing sport in America. Wehave tons of opportunities for
paddles and and pickleballs, butwe don't have a lot of great
gear on the market.
(00:56):
Well, I'm so excited to announcethat Sunsets and Dink's are now
a sponsor of the Teaching TaxSlow podcast and produce amazing
gear, not only to look at, butyou feel confident on the court.
Because you are part of theteaching tax law community, you
get a 15% discount on all yourorders with them. I know I love
the gear I received and I havequite a good record while
(01:19):
wearing it, believe it or not,even at my level. Go to teaching
tax flow.com backslashpickleball and simply enter t t
f 15 in the serve up promo codearea of your paddle rack.
John Tripolsky (01:35):
So welcome back everybody. We already know that
this is your favorite taxpodcast. Hopefully, your
favorite podcast of any that areout there. And today we're gonna
look at something. As Imentioned here in the intro, you
probably didn't even know existson this planet we call earth.
Heck, you might not even likeanything that the IRS puts out,
but I can almost guarantee thatwhat we're gonna talk about
(01:58):
today is gonna surprise you.Maybe for the better, you know,
maybe you'll be a little PO'd,but who knows? Regardless, we're
gonna hit you with some great,great numbers that the IRS put
out in their data book for 2023.But I guess we need to invite
this guy back again consideringit is his show, Chris Pacuro,
the bald and beautifulgentleman. How are we doing
(02:20):
today?
Chris Picciurro (02:22):
I am great. The bald and beautiful, was that a
sit was that like one of thoseraunchy TV series they were on
during the day, or was that theBold and Beautiful? I don't even
know what they those what werethose called again? They're,
like, not sitcom. They're,
John Tripolsky (02:38):
soap operas. Right? Soap operas.
Chris Picciurro (02:40):
Yeah. I I think we should make one the Bald and
Beautiful, not just the the thethe bold and beautiful. John,
speaking of handsome bald men,which I am not included in that
population, you were recentlyvisiting, here down in gorgeous
in historic Franklin, Tennessee.You were kind enough to attend
(03:00):
my youngest son Luke's travelbaseball game, and there is a
very, very nice gentleman that'sa father of one of the other
kids that is also has a baldhead and an olive complexion,
and him and I sometimes getmistaken for each other. In that
particular day, we had the exactsame attire on, black shorts and
(03:25):
a gray t shirt, And, and thenthere's another gentleman that
had the same haircut.
John, we had we were having aconversation, 4 of us, where you
were the only one with the withhair, and and we know that you
have an amazing mane.
John Tripolsky (03:37):
Oh, and but, honestly, you know what? And
it's funny because your wife hadpointed that out, and, yes, the,
the fellow father of that greatguy, ironically enough, he's
from the same area that I livein. But you know what I really
felt like there? And you knowwhat? We can tie this into the
IRS.
Right? Sometimes people are veryuncomfortable with, you know,
what you know, whose team is theIRS? You know? Oh, you know, the
(03:58):
Internal Revenue Service.They're out to get all my money.
You know, I wouldn't really sayuncomfortable. When I was
standing there talking to youguys, I kinda felt like I was at
a mister Clean convention. Youknow, it was, it was very
interesting. But
Chris Picciurro (04:11):
well, I'll take it because Mr. Clean is a
John Tripolsky (04:13):
great company. So he's a studly guy, and he
cleans crap up. So on that noteWell,
Chris Picciurro (04:19):
I don't know about cleaning things. Thinking
of cleaning up cleaning upaccounting records sometimes
when they're messy, our our teamdoes that. IRS data book. This
is so let's talk about the IRS.John, we had an episode where we
were talking about quarterly taxpayments and extensions and how
it's weird the IRS calendar.
I don't know if you rememberthat. But what's important to
understand is the the federalgovernment's fiscal year end is
(04:41):
September 30th. That's why thesewacky quarterly payments are
October, January, April, andSeptember. They want that 4th
quarter payment on the booksbefore they wrap up their fiscal
year end. So with the IRS beingpart of the federal government,
their fiscal year end is alsoSeptember 30th.
So right about this time ofyear, they issue their data
(05:04):
book, which is an amazingresource. I bet and, yeah, it's
94 pages. Couple couple fluffpages in there. So that not
necessarily the most lightreading. Although, John, I I bet
your dad woulda liked this book.
I don't know why.
John Tripolsky (05:17):
He would love it. He would love it. But you
got
Chris Picciurro (05:19):
a bunch of graphs and and borderline
spreadsheets. So
John Tripolsky (05:22):
And I have to be honest. I haven't seen one of
these from many years prior, butI'm sure, you know, as time has
passed, I think it's safe to saythat this data book has probably
been modernized graphically in asense. Right? I'm I'm sure 10
years ago, this thing lookedlike it was spit out of a DOS
program or, you know, LotusNotes or something like that.
Chris Picciurro (05:43):
Yeah. It was probably not the most fun to
read, but it is on the IRSwebsite. It's gonna be on the
show notes. But what one thingthat tax professionals, we have
to understand, and taxpayers,you need to be leaning on your
tax professionals, is that partof teaching tax flow, we have 3
laws. One of them that wesometimes don't talk about
enough is that but we do talkabout it sometimes.
(06:03):
Tax agencies are yourinvoluntary business partner. So
the cool thing is if if youthink about a football game,
each football team has their ownplaybook. This is your
opponent's playbook. We getaccess to it. This is an open
note test you're taking, people.
So understand what's in thisdata book because this if you
read through this, this is gonnatell you where the IRS
(06:25):
enforcement areas are, how manyreturns are filed, what they're
looking at revenue wise. And,again, you know, figuring out
the IRS, yeah, they they are ourinvoluntary business partner,
but but you also have tounderstand what they're what
they're looking at. So in thefirst part of today's, podcast,
(06:46):
we're gonna talk about justreturns filed. So remember, this
is from the fiscal year for theIRS, so the 12 months ending
September 30, 2023. And, the IRSis a very is a very busy
organization.
They processed about 271,000,000tax returns on supplemental
(07:12):
documents. That is a ton of taxreturns. So 271,000,000 of
those. Out of those, 213,000,000were filed electronically. So
over 3 quarters of these returnswere filed electronically.
Now these returns include,individual returns, employment
(07:35):
tax returns for your 9 40 ones,your w twos, your business
returns, so your corporation,your s corp, your partnerships,
and then the state gift taxexempt organizations. But 3
quarters of the returns arefiled electronically. And
interestingly enough, 9 over 90%of individual returns were filed
electronically. So IRS, in theireyes, and I agree, are
(07:59):
succeeding considering that 90%of individual returns, which
makes up about a 150,000,000 ofthe 271,000,000 returns are
filed electronically.
John Tripolsky (08:12):
And, Chris, a question for you. So I I agree
with you a 100%. I think that isa huge win on the proverbial
scoreboard for the IRS justgetting, you know, the
population to migrate towardsthe we'll call it a com
comfortability withelectronically falling. I mean,
I'm sure my dad went kicking andscreaming. I'm sure he still
does every year.
I love that guy by the way. Hedeals with me, But here's a
(08:34):
question for you too. I mean, doyou foresee it somewhere in the
semi near future where the IRSwill just say, hey, we're not
accepting anything that's notelectronically filed, or do you
kinda see that maybe alwaysbeing a thing? And, you know,
what what do maybe some of thoseold fashioned paper ones look
like? Do you are are taxpayersrequired to mail in certain
(08:57):
types of those, say, amendedreturns or anything like that?
Or
Chris Picciurro (09:00):
Yeah. The so it's nice now that amended
returns just over the last yearand a half or so. Now we can
file on the personal sideelectronically before they had
to be mailed in. Some returnshave to be mailed in. I don't I
think it would probably take afederal law to require a return
to be filed electronically.
So the I r but what the IRS isdoing is because of the delays
(09:22):
in processing paper returns andrefunds, they're forcing people
to file electronically withoutmaking them file electronically,
if that makes sense. Right. Sohere's an interesting one
though, John. Now we know thatwe talk about certain states
quite a bit, in the in on thispodcast. We talk about state
income tax.
But the IRS there are 3 statesthat topped the IRS collections
(09:45):
for most tax before issuingrefunds. So what states in the
country are paying the mostfederal tax? I'm ready for my
drum roll.
John Tripolsky (09:57):
I think I have no drum roll.
Chris Picciurro (09:58):
Oh. Your drum rolls on this podcast.
John Tripolsky (10:00):
We should. You know what? Here. We'll we'll
take a little pause here, and,you know, we'll edit 1 in
editing. So 3, 2, 1.
Chris Picciurro (10:09):
Okay. There's your drum roll. There you go.
Awesome. So here they are.
California, your best friend,New York, and Texas. Those 3
states paid the most amount offederal tax. So very
interesting. Very, veryinteresting statistics. Now, so
(10:32):
electronically filed returns areon the rise.
We have out of the individualtax returns. So let's talk about
the 163,000,000 individual taxreturns. Okay? About half of
them were were filed bypractitioners, so paid
professionals online. Prettymuch paid professionals have to
(10:54):
file online.
So 50% of the individual returnsof the 163,000,000 individual
returns are filed by paidpractitioners. A little over
50%. 15,000,000, remember wesaid about less than 10% were
filed via paper. Only 3,000,000were filed online using a free
(11:14):
file. I found that interesting.
I thought that would be a lotmore. The IRS does have some
free e file opportunities righton their website, And then their
other online filed is61,200,000. What does that mean?
Those are your self prepared. Sovery, very interesting that
you've got 85,000,000practitioner online filed, other
(11:35):
online filed, which would meansomeone using some type of self,
self prepared software,61,000,000.
And, but I would say that's awin for the IRS to have over 90%
of tax returns electronicallyfiled. Absolutely. Heck, yeah.
John Tripolsky (11:53):
I mean, that just think about the number of
trees that they're saving forfor lack
Chris Picciurro (11:58):
of better terms. Right? Think about yeah.
There there's so many
John Tripolsky (12:01):
The postal service is probably pissed. But,
you know, it it is what it is.
Chris Picciurro (12:05):
That's true. Gosh. I wonder how much revenue
the postal service has lost overthe last 20 years by not not
having returns filed. So I
John Tripolsky (12:12):
mean, heck. Think about it. Right? Let's say
everybody did it on paper. We'llwe'll call it a a dollar to mail
in, which it's probably morethan that because you're
probably mailing a the packet ina sense.
I mean, that's over$200,000,000.
Chris Picciurro (12:24):
Mhmm. Right? Exactly. I I agree. Now the IRS,
is requesting additional fundingto service their taxpayers.
So part second part of this thatwe wanna talk about today are
there's something called thethe, you know, taxpayer bill of
rights and the taxpayer advocateservice, which is an independent
organization within the IRS.We've had people go to that
(12:46):
advocacy. Actually, John, not toget personal, but I believe
you've had a run-in with the inin a positive way. Yeah. It was.
Advocate server.
John Tripolsky (12:53):
And if anybody, you would so one thing, Chris,
that I was really surprised ofthat. A, it was I didn't even
know they existed. Right? And, Imean, we were without going into
a massive amount of detail, wewere just trying to make a
simple change where there was aa boo boo that was made, really
on their end because they saidit what whatever. They said they
didn't receive it.
Back to the paper trail, that'sa that's a great example. Right?
(13:15):
When you mail something and theysay they don't get it. But,
yeah, the that advocate service,I was so surprised how efficient
they were with one thing, butalso it was you know, once once
I got connected with them,again, not even knowing that
they existed, that was I mean, Iwish they had, like, classes and
courses for companies that runas efficient as, won't say your
(13:39):
last name, but I believe it wasKaren out of Detroit. Fantastic.
That's right. Yeah. It wasreally good. They're very
helpful. And and it's not like,you know, you're stuck in a
corner with them.
Really, they I mean, I felt thatthey were truly on my side.
They're like, let me let me geta solution for this. You know,
they have they have our ear, butit was great. So
Chris Picciurro (13:58):
Yeah. The IRS I mean, the the challenge is is we
is especially there's a there'sa bat line I call. There's a
paid practitioner line for theIRS as CPAs, enrolled agents
that we can call. And and youhave to identify yourself. You
have to tell them what your PTINnumber is, and they have to
verify you and you get get buteven there, we would you know,
there's practitioners that willwait on hold for for an hour,
(14:19):
hour and a half, and then thecall just gets dumped.
So the IRS knows that's aproblem, and they are working to
try to get those lead times asas as short as possible. Service
to taxpayers, John, here'sinteresting. How many without
looking at the report, how manyIRS website, page views do you
think they had in the fiscalyear?
John Tripolsky (14:40):
Oh, alright. I'm I'm really not looking at it. I
promise.
Chris Picciurro (14:44):
Page views. Man. Iraps dotgov.
John Tripolsky (14:48):
I'm just I'm just guessing. We're gonna say
Chris Picciurro (14:53):
100,000,000? No. Over 3 and a half
1000000000.
John Tripolsky (14:57):
Holy cow. Okay. Alright. That's a lot of refresh
button.
Chris Picciurro (15:01):
That's a lot. Yeah. So imagine. Anyway, they
are they are, they are slammed.They are trying to catch up with
cases.
I mean, the pandemic put the IRSbehind almost a full year. And,
you know, we try but it'sfrustrating for clients. Right?
Because our like, I can't tellyou how many letters that our
clients receive on our privateCPA practice when we're trying
(15:22):
to resolve an IRS issue thatbasically says IRS is saying,
hey. We know you've got anissue.
We'll get to it in the next 60days. And then they get another
letter, you know. So it'sfrustrating. Now I would say if
you if you owed a refund or haveany type of correspondence or
case going with IRS and you arefound to be correct, they will
(15:43):
pay you interest on that balancedue. So that's that's the
positive.
John Tripolsky (15:50):
The number of patriots, though, honestly, I
mean, that's kind of anotherkudos to the IRS as as an
organization in a sense becauseif they're getting that much
traffic, that must well, itcould go either way. Right? That
must mean that they either, a,have a lot of resources that
people know they can find, orthey have a lot of resources
that people can't find, and theyspend a lot of time searching
(16:12):
for them. So either way of it, Imean, I think that goes hand in
hand and and really a directcorrelation with the number of
people that are comfortable oror just frankly submitting
electronically. Now they're, youknow, maybe going to I mean, not
bypassing their CPA or their taxpro at all, but maybe they're
doing a little bit more kind ofself, discovery.
(16:33):
So a little bit more research ontheir end, which is great, my
opinion.
Chris Picciurro (16:37):
Yes. I mean, they they know there's an issue,
but, again, they they I was veryfortunate to be on the Intuit
tax council for a few years. Ithink it was, like, 20 oh, gosh.
I don't have my I don't have mynice plaque out that they gave
me. I appreciate it, though.
Like, 2017 to 2020. But part ofthat, we got to go to
(16:58):
Washington, DC. We got to meetwith the leadership within the
IRS. And part of the issue istheir software is so old. Their
platform's so old.
They've gotta concern themselveswith data security. Changing
that juggernaut is a massiveundertaking. And constantly with
with all these returns gettingfiled, it's challenging. But
probably the thing that mostlisteners are are interested in
(17:21):
and why they tuned in other tohear about our kids' travel
baseball teams and how how niceyour hair is, the compliance
present of the I presence of theIRS. Who is the IRS auditing?
What are they doing to enforce?Remember, IRS is a collection
agency of tax for tax. So theyhave field examinations,
(17:44):
meaning, hey. I, you know,that's like what you would call
an in person audit. Okay?
They have correspondenceexaminations. That means we're
auditing you. Here's a letter.Submit all your stuff to us, and
we and we'll human will look atit. And they have under
automated under reportingnotices.
(18:04):
A lot of those are called CP 21000s where it says, hey, John.
We see that you, you forgot topay tax on this 10.99, and and
here's the tax and, you know,and maybe they're right, so you
you just pay it. And then theyhave some automated substitute
for return in revenue. That'ssuch a small amount, but the,
(18:25):
the IRS really generates most ofits tax assessments and revenue
from field examinations.
John Tripolsky (18:31):
Hey, Chris. I'm gonna quote, Andrew Pulo. So
he's been a guest a couple timeswith us here on the podcast
where we're really I think, youknow, the first one, I believe
we, referred to the IRS as DarthVader. And Andrew is probably,
you know, obviously, besidesyourself, I think Andrew is
probably the most in tune withthe directly with the IRS, out
of any person I've ever met. AndI'm gonna quote him what I think
(18:53):
he said, but maybe I'm adding alittle bit of flare to it,
earmuffs for the children.
But I think he referred tosomebody that gets a c p 22,000
or 200 as just open the damnletter. Really? Just don't let
it sit there. Just open it. Itdoes you no good leaving the
envelope sealed in your incomingmailbox on your kitchen counter
when it's something easy thatyou can solve.
(19:15):
So that was a great episode wedid.
Chris Picciurro (19:16):
And so, yeah, Andrew is amazing. He's helped
out with within teaching tax, soa lot of the people in the
community. But understandingthere are different types of
examination. So let's take alook at some of the raw numbers
the IRS has, displayed in theirdata book. So for the for tax
returns basically for the last 8years, tax years 2013 through
(19:38):
2021.
Now remember, there's a statuteof limitations of 3 years. So
you're always looking back ayear or 2, when we look at these
these audit numbers. But forthose tax years, the IRS
examined less than a halfpercent of individual tax
returns filed and less than 3quarters of a percent of
corporate returns filed. So yourraw audit risk is technically
(20:02):
0.44% or 1 in 200. Alright?
That
John Tripolsky (20:06):
And that's actually a good number to hear
because I know some people, atleast ones that we talk to.
Right? Individual taxpayers,business owners, the the fear of
higher powers is put in themthat they're gonna be audited.
Right? So that right there is avery, surprisingly, a very small
number.
Obviously, it probably hassomething to do with staffing as
well on the IRS's side, but,like, you said it, your your
(20:28):
audit risk is is pretty low. Itall in all,
Chris Picciurro (20:32):
it is. Now I do wanna throw a couple things out
there. Tax year 2019 is the mostrecent year outside of our
current statute of limitations,so that that's a really good
number. The exam coverage ratefor tax year 2019 for individual
taxpayers with income of over$10,000,000, again, not a big
percentage of people, was morethan 11%. For taxpayers with
(20:57):
$5,000,000 to or 5,000,000 to$10,000,000 of income was 3.1%.
For taxpayers over, 1,000,000 upto $5,000,000 was 1.6%. So just
to put it in perspective, onceyou get to a $1,000,000 worth of
income, your audit risk triplesjust by raw numbers. Once you
get to $5,000,000 of revenue,you're out up to 10,000,000,
(21:19):
your audit risk is 6 timeshigher. And then once you get to
over 10,000,000, your audit riskis 20 times higher than just a
raw number. Now it's still arelatively small number, but
that just gives you an idea ofof those you know, what those
percentages are.
And we've had some really goodpodcast content on how to avoid
(21:40):
an IRS audit before it's anaudit. Right? Make sure you're
reporting your income. Make sureyou're tying out your
transcripts and what'shappening, addressing all the
forms that you that youreceived. So
John Tripolsky (21:52):
And, really, why do you think that may be I'm
sure it's not a a known answer,but, you know, the the higher
income. So say we're eventalking, you know, that
1,000,001 to 5 and then, youknow, 10 and over. Is it really
do you think because they justlook at that as, like, alright.
We need to look at that morein-depth, or is it really just
checking a lot of boxes when itcomes to complexity naturally?
Chris Picciurro (22:15):
Right. Obviously, the the the numbers
are higher. So if you havesomeone, let's say, that has
10,000,000 $11,000,000 of netincome and IRS disputes a a a
$100,000 deduction, okay, thatrevenue would be probably about
34, not 35 to $40,000 of incomefor the IRS. If someone has a
(22:35):
$100,000 worth of net of incomeand for some reason the IRS
disputed a $30,000 deduction,there's not much juice in it for
the IRS. There's not you know,now obviously if someone's self
employed, that increases theiraudit risk as well, But but
those are that's what IRS islooking at is, of course,
they're gonna examine the themore the higher income taxpayers
(22:56):
because there's more tax to, youknow, to collect.
It's a higher percentage. Yourmarginal tax rate is higher.
Which ties directly into, you
John Tripolsky (23:06):
know, what you mentioned again earlier in the
show on this one specifically,you know, the IRS being your
involuntary business partner.You know, that's it's pretty
important to remember. Right?It's the internal revenue
service, not the internalcharity service. Like, they need
to make money.
And as you know, we talk aboutthis on almost every show or at
least every other one. So peoplewho've been listening to this
now for well over a yearprobably tired of us saying
(23:28):
this, but it's totally true thatif you don't pick your tax, the
IRS will, and they're not gonnapick it in your favor. So tax
planning and strategy, all thatputs all of the kinda all the
chips on the table, but you'rein control of them.
Chris Picciurro (23:42):
So I would agree. And and when we look at
in let's focus on individualincome tax returns for the the
2013 to 2021 if we're looking atexamination, percentage. Okay?
In general, if you look at thatperiod of time for all the
returns filed, it's a very smallpercentage. If your income is a
(24:05):
$100,000 or less, and let's sayyou're not self employed, your
chance of getting examined isabout 1 tenth of 1%.
So there you you really gottalook at and, again, that doesn't
give you a a you know, John, alot of cars cars speed down next
highway. You can't give everyonea speeding ticket, but you
(24:27):
certainly don't wanna be the onegetting you a speeding ticket.
John Tripolsky (24:30):
Right. Wait. Like, you know, you stand out
more if you slowed down at leastin Michigan. Right? If the speed
limit's 70 and you're doing, youknow, 82 and everybody else is
doing 90, you know, you looklike the idiot.
They might pull you over. Butanyways, anybody that's from
Michigan will completely agreewith that one. It's more
dangerous to drive slow.
Chris Picciurro (24:48):
And here's the other thing, talking about
getting pulled over, I'm gonnaclose with this statistic. And
when we you know, if you'relistening to this, we don't work
we wanna remember, legally andethically reduce the tax you pay
in your lifetime, we want you tofile a compliant return, but we
want you to file a return thatyou're paying as little tax as
possible. Let's put a bow onthis out of the the 2013 to 21
(25:10):
individual returns examined,okay, the total amount,
1,600,000 of those had arecommended additional tax.
50,000 of those had a no change.Right?
So the point is your chance, ifyou get examined, of having a no
(25:34):
change audit is very small. Infact, it's about 3%. So if
you're getting audited, you'reyou're probably gonna get
additional tax assessed. Andthat's 3% of the small portion.
Exactly.
John Tripolsky (25:51):
And not saying it would be a lot. Right? It
might be something small. Itmight be, you know, something
huge. Well, I know, Chris, thisthing, as you mentioned too
earlier on, 90 plus pages.
So if you are in the bathroom alot, you know, print this off.
Maybe you can do a page a day orsomething. Or if you're like,
Chris, you already know thisthing really page to page. But
(26:13):
again, as we kind of opened up alittle bit with, right, this is
something that a lot of people,myself included until it was
introduced to me by Chris, youdon't even know exists. I mean,
it's not like this is a secreteither.
This is basically, you know, asthey call it their their data
book. I kinda look at it as moreof, like, alright. It's an IRS
fact sheet. It it hits all thesenumbers in there. It's actually
(26:35):
laid out very, very nice andeasy to follow.
So if you were interested in onesection over the other one, you
can see exactly where to go.It's a PDF. You can skip right
through it. But I know, Chris,before we do wrap up here too, I
imagine we're gonna revisit thismultiple times throughout the
year, either in sections ormaybe we, you know, do another
show here in a couple months orso, and and we hit in some
(26:56):
little specific. But on thatnote too, if you are or if you
do take a chance and you look atthis data book, again, links in
the show notes right there foryou.
Breeze through it. If there'ssomething that interests you
more than something else, dropus a line. We'd love to explore
a little bit more in-depthbecause it is it gets a little
heavy in some areas or maybe youeven just have a a question. I
(27:17):
guarantee that we are moreresponsive than the IRS. So if
you do have a question on this,ask us.
Drop it in our Facebook page,for teaching tax flow and
defeating taxes at privateFacebook group. You as a
listener are always invited tojoin in there as well or shoot
us an email. Either or, we'd behappy to explore some topics. So
as we close out with, as always,next week, same time, different
(27:41):
topic here on the Teaching TaxFlow podcast. Hey, everybody.
Johnny here from the TeachingTax Flow team still here.
Hopefully, you found this show alittle bit more interesting than
all the numbers that areprobably laid out in that IRS
data book. But I'll keep itshort and sweet to wrap this up
(28:03):
even more. Again, please take alook at any of the offerings or
any I shouldn't say offerings.Any of the statistics, any of
those numbers that are in thatbook, and drop us a line.
Disclaimer (28:14):
Again, we'd love to look at them with you. It's not
saying you have to go onFacebook, put your name, put
your business, put everythingout there, but again, just shoot
us a message, or you can even goon the page or in the private
Facebook group and do itanonymously, if you did have a
question. So as always, wealways invite you to do so, and
we will talk to everybody verysoon. The content provided is
(28:37):
for educational purposes only.We encourage you to seek
personalized investment advicefrom your financial
professional.
For all tax and legal advice,please consult your CPA or
attorney. Investment advisoryservices are offered through
Cabin Advisors, a registeredinvestment adviser. Securities
are offered through CabinSecurities, a registered broker
dealer. The content of thispodcast does not constitute an
(28:57):
offer of securities. Offeringscan only be made through an
offering memorandum, and youshould carefully examine the
risk factors and otherinformation contained in the
memorandum.
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