California corp.

"TaxSrv" wrote in message
...
"Tony Cox" wrote:

As for 'random' audits, from what you say, entities (people
or corporations) are in no danger whatsoever of being
audited if they report earning and expenses according to
industry norms. Somehow, this doesn't ring true.

Filing such a return is a criminal offense even without proof of tax
evasion purpose. In the realm of actual tax fraud, taxpayers don't
make up income/deductions in a manner such as using industry averages,
so tax criminals must know this is a most foolish way to go about it
(and legally they are wise).

Yes, but legality aside, how exactly would they get caught if
not through a random audit? If selection (for audit) is predetermined
by income/deduction criteria, then filing according to industry averages
would seem to be a rather sensible strategy for a tax criminal to pursue.
Assuming, of course, that they would pay less tax in the process.