Post
Topic
Board Legal
Re: Bitcoin Is Property Not Currency
by
bbeagle
on 28/03/2014, 17:12:51 UTC
Receipts are proof of nothing though, i could fabricate them all day, are simple unprovable records all auditors are looking for, or do they require proof, and if so what proof could you possibly give them that you sold your tv for $200 and not $800, or that you sold your tv and not an ounce of weed?

If the IRS thinks all your receipts look legit, they won't investigate further. But if anything looks suspicious, they will investigate a few items and see if your story is true.

For example, if you write on your taxes that you gave $1,000 in charity to your church (a tax write-off)... if the IRS audits you, they will ask you for your receipts. You tell them you gave cash, you have none. They will then ask for the name of your church. They'll follow up to see if you go there regularly. If the pastor knows you, they might think your donations are legit. They won't trace further than this, they'll trust you.

However, if they ask your friends about your church, and they say you don't go, and the pastor never heard of you.... well the IRS will get upset, and charge you with fraud and fine you.  They will then investigate deeper everything on your taxes, and audit you for previous years, and also audit you repeatedly in the future. YOU have to prove that you gave $1,000 in charity to your church, not the other way around. If the IRS is just suspicious, that's enough for them to charge you.

(If you wrote that you gave $50 to your church, however, they won't even think of pursuing it, so how MUCH money matters a lot)