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AlJeff...I may be wrong here, but, if memory serves, those who are found to have a tax liability are generally "caught" by the Underreporter Branch of the IRS Service Center wherein the taxpayer's return is filed. If an audit is ordered and in that process, it is discovered that capital gains were in fact owed, I think the appropiate tax and penalties would then become do. Generally, when 1099s are sent to the great IRS computer in Martinsburg, WV, and your SSN starts to make things go tilt, a notice is issued. These notices, if they go unresponded to, do in fact get progressively worse and could well lead to a full blown audit.
I think a formal indictment right at the starting gate is a bit heavy for this infraction, should there in fact be a violation. Please correct me if I'm wrong.