Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: DMaA who wrote (248629)	5/3/2008 1:02:27 PM
From: Alan Smithee	Respond to of 793926

Would this be enough for the IRS to start an investigation, especially in light of Franken's other tax problems? Possibly. However, IRS might have the same problem Franken has. If Franken can't reconstruct his finances, then IRS is limited to what it has in its files (1099s, W2s, K-1s, etc.) and what it can get from third party sources with summonses (banks, brokerages, etc.). Sometimes in rare cases, IRS will resort to what's called indirect methods of proof - bank deposits analysis or net worth analysis. In the first, they look at bank deposits and compare with known income sources. Any unexplained excess that can't be attributed to transfers from other taxpayer accounts, etc. is deemed to be income. Under net worth, IRS takes a starting point and looks at the taxpayer's net worth in assets - cars, homes, accounts, etc. Then they look at current net worth and compare the increase to known sources of income. Any excess is deemed to be attributable to income received by TP but not reported. Resort to these indirect methods are rare.