08-21-2014, 01:04 PM
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#12797
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Join Date: Mar 2004
Location: WI
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Re: 308 Negra Arroyo Lane: Breaking Bad Appreciation
From another forum, an IRS dude breaks down the realism of the Skyler/Ted audit scene, it's p interesting:
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I know this isn't exactly a "be pedantic about Breaking Bad" thread, but I've really needed to get this off my chest since burning through the whole series recently. So for anyone who is interested, here is how right and wrong Breaking Bad was about the IRS:
-The audit scene was actually fairly accurate in both setting and how the agent reacts to Skyler's little story. For a business that size though, it probably would have taken place wherever the books and records were located, so maybe Ted's house.
-I was floored that they actually got the Internal Revenue Code section right, section 61 does indeed define gross income and it was handled correctly...too bad they sort of ruined that accuracy by having Skyler ask Ted to fill out a check to the IRS. It should have been the US Treasury, but I can sort of let that slide since it's easier for the audience to understand that way.
-Ted coming to Skyler with the subpoena (which looked accurate enough) likely would have actually been for a prior year, when Skyler was not actually working for him, though it could have easily been expanded to include the most recent filing as well.
-They stated the taxes due were something near $600K, and then threw in some random number for penalties and interest bringing it shy of $700K by tens of thousands...no. Penalties alone for that amount of delinquent taxes would be over $120K.
-Skyler is wrong to freak out about Ted paying the back taxes. If they reached an agreement he signed off on in the audit, the case is done. They can't reopen and reexamine it just because he doesn't pay. And since he owns the company it's likely they wouldn't ever touch Skyler.
-And let's just say, worst case scenario, that Skyler is somehow dragged into it and comes under audit and they discover the money laundering for the car wash. That means the IRS will find out about the drug money and...ask for the self-employment taxes to be paid. Yeah, Walt wouldn't want to have to pay his taxes on the money, but the IRS can't go to the police with that information due to the Privacy Act (believe me, I have seen illegal marijuana businesses come under audit, they're just treated as regular businesses for the most part)
Sorry about my off topic ramblings, it's just fascinating how close the show really got to nailing that (even though I doubt many people cared about that subplot). More on topic, this show is fantastic and surprised me many times as to how well it was all put together. I especially loved the last scene with Gretchen and Elliot. As soon as I saw the lasers hit them I figured it was just some guys with laser pointers...but Walt had hit a point where he was so deranged and unpredictable I would have also not been shocked if he had actually hired assassins to tail them. He really was like a living example of the Uncertainty Principle, where his actions were both manipulative lies and sinister truths until they were actually observed in full.
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[The final bullet point] is fascinating. Mind expanding on it some more?
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Certainly. Essentially what it boils down to is the Privacy Act makes it so that all information on returns is kept as confidential, not only from the public but from other government organizations as well. The IRS deals with tax law and has no jurisdiction in criminal law (they even have their own internal police force for dealing with any verbal or physical threats against agents). Yes there are instances of people being jailed for tax evasion, but the IRS won't be able to turn someone in just because the business is illegal in nature (honestly not sure if the records could be seized by the FBI or the DEA with probable cause, but the IRS definitely wouldn't initiate it).
There are even special rules regarding deductions for some illegal activities. For example, Walt would have been able to deduct for the equipment purchased for the meth lab, but would not be allowed a deduction for cost of goods sold (it's not allowed when the goods are illegal in nature). I think there are also special rules regarding which bribes can and cannot be deducted, but that's never come up so I've never had to deal with it.
And yes, this stuff happens. The most extreme example I can think of is meeting an agent who allegedly audited a professional assassin (unfortunately that story ends there, there wasn't much information after that).
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