IRS Audit Threat

[BFranklin]

Long story short I know a person who threatened a business by saying "I hope your taxes are good for the last few years cause I'm gonna have the IRS audit you". My question is how would someone get the IRS to audit a small business? Should the business be worried or is this person just blowing smoke?

[Acala]

Like any good police state operative, the IRS is thrilled to get rat fink information. However, if the person making the threat has said "Unless you do (or don't do) X, get ready for an IRS audit." He has very likely committed the crime of extortion.

[invisible]

This happened to a guy named Wayne Green who used to publish a magazine called 73 Magazine. Around 1973, a competitor sicced the irs on him and got him audited (word got around that he had bragged about doing so). Throughout his trial (and subsequent trumped-up conviction for tax evasion) and for years afterwards, he wrote extensively about this experience in his editorials. He attempted to expose how it was nearly impossible for one to prove themselves innocent to the irs, the lack of due process, and the unConstitutional police state powers that this agency had. Throughout the years, he shared quite a bit of information about tax resisters, their methods, and various cases. He continued to speak out on these topics for many years. Unfortunately, you won't find much at all about it online, and have to find an extensive collection of the magazine in order to read any of it. One quote I remember quite well was something to the effect of "When you think about it, there should be a Miranda warning right there next to where you sign the 1040, since there is no possible way to ever know if everything you say is true, and you are almost certainly perjuring yourself if you sign that tax form." Dr.3D will probably remember Wayne Green and 73 Magazine, it was probably before Collins' time. If you can find a good collection of back issues, there is extensive reading available on a firsthand experience with the topic raised in the OP.

OT: In many ways, publisher Green was way ahead of his time. He moved himself and his magazine from Brooklyn to NH in the early 1960's in search of lower taxes and greater freedom (something he also wrote extensively about). I remember another editorial were he wrote about lack of common sense in airport security after he had a dental pick taken away from him - this was circa 1980. He also wrote extensively on the need for educational reform, and how government regulation hurts everyone across the economic spectrum. Although he unfortunately stopped publishing 73 Magazine sometime in the late 1990's, he's still alive and living in rural NH, and seems to be active in the local chamber of commerce. I've often thought about him throughout the last 2 election cycles, and how he would seem to be an excellent champion of Ron Paul, and wondered why he never attempted to speak out to support his candidacy (he did speak out in support of Goldwater in 1964). But then again, he's like 90 years old by now, and seemed to stop writing (he continued to do so on his website for a few years after he folded 73 Magazine) about 12 years ago. An outspoken free-thinker, highly intelligent and prolific writer, this guy has been a huge personal inspiration ever since I started reading his magazine around age 10. My collection of 73 Magazine (have most issues from 1962 through the mid 1990's) is still something I value highly.

[Schifference]

I use to like to go to a donut shop in Colorado. It was a mom and pop shop. Best homemade donuts ever. Colorado sales tax law was based on if you bought a half dozen or a dozen donuts and brought them out of the store for home consumption, then the transaction was not taxable. However if you sit at the counter and eat a donut it is taxable. I never ate at the counter and always bought my food in bulk for off premises consumption. This was back in the mid to early ninety's and these donuts were not cheap they were sold for like $12 a dozen. Tax was 7.2% Back then I considered it expensive. I owned a business in CO and knew something about the tax law. I expressed my discontent for having to pay taxes that were not mandated with no success to the shop owners. I called the State taxing authority without incriminating the donut shop, and confirmed that there should be no tax on these types of purchases. Furthermore if I went to the grocery store or another donut shop and bought a dozen donuts there was no tax. I repeatedly asked the shop to look into the matter because they were collecting tax and giving it to the state and the owners said they do it the same way the previous owners did and have been doing it this way for years. This tax was not necessary. The shop owner did not care about my concern. Finally I turned them in because they would not correct the matter. Later they were met with a full Sales Tax audit. They stopped charging the tax on the aforementioned type of purchases. Must have been a royal pain for them to go through. Money collected in error remained in the states coffers because the state said there was no way to give it back to the people that made the purchases. When I had my business I had to undergo a Sales Tax audit and it cost me tens of thousands of dollars to defend myself and I had done nothing wrong. The state sends in auditors that know nothing about the type of business you have and write you up for every conceivable thing and then you have to research and prove to them that tax is not supposed to be collected. Anyway I would take any threat of being turned in to any authority serious and listen to anyone that has any type of issue or complaint.