IRS Audit..!

Page 1 of 2  
What a time to get this piece of mail. Any advice on how to deal with an IRS audit? Now I'll have to pay for this AND come up with the money for 07 soon.
Anyone been through a field audit? Everything I read says do it at their office. They want to come to my home based office.. My business broke 100k in '06 and apparently that substantially raises your odds of being audited..
My nerves are shot. I don't keep very good records. And the more I've been researching, the more I'm finding things I could have been deducting and things I deducted incorrectly.
I just don't see how the same government that awards no bid contracts to Chaney's 'former' company can ask it's citizenry to be enthusiastic about paying taxes. ...
We all know how corrupt the system is including the IRS.
"Who are you going to believe, me or your lying eyes?" -Groucho Marx
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
N O wrote in message
What a time to get this piece of mail. Any advice on how to deal with an IRS audit? Now I'll have to pay for this AND come up with the money for 07 soon.
Anyone been through a field audit? Everything I read says do it at their office. They want to come to my home based office.. My business broke 100k in '06 and apparently that substantially raises your odds of being audited..
My nerves are shot. I don't keep very good records. And the more I've been researching, the more I'm finding things I could have been deducting and things I deducted incorrectly.
I just don't see how the same government that awards no bid contracts to Chaney's 'former' company can ask it's citizenry to be enthusiastic about paying taxes. ...
We all know how corrupt the system is including the IRS.
"Who are you going to believe, me or your lying eyes?" -Groucho Marx
Personally, I wouldn't go to their office. They get paid for their time and travel to come to yours, you don't. I really don't understand "I don't keep good records." If you are based from home, good records are essential. Surely, you have a tax man or accountant to tell you what deductions are allowed etc.? At any rate, I feel for you. Good luck with it.
Cheri
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Mar 6, 7:43 pm, "Cheri" <gserviceatinreachdotcom> wrote:

Exactly the reason I always file a hard copy return instead of electronically. They're getting paid to work so why make their work easier for them. And the old argument of getting your refund faster is nonsense also - they've had your money for almost a year anyway so what does waiting a few more weeks matter?
Red (If quitters never win, and winners never quit, what fool came up with, "Quit while you're ahead?")
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
And the old argument of getting your refund faster is nonsense also - they've had your money for almost a year anyway so what does waiting a few more weeks matter?
**************************
Refund? Why let them have your money for free anyway? I'd rather pay a few bucks than get a big refund.
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

On the other hand, getting even just a few dollars back each year protects you if you're self-employed (as many professionals in this group may be).
The IRS has something called "safe harbor": if you didn't pay the proper amount of quarterly tax payments this year BUT you did pay at least $1 (one dollar) more than you owed in the previous tax year, you have "safe harbor" and will not have to pay the stiff penalties the IRS would otherwise levy. This may also be true for the state in which you file.
At least, this is what my accountant told my wife and I when we met with him. As a pastor, I'm self-employed as are my colleagues, but apparently most of them have no clue as to how to fill out the forms for the IRS, the state and Social Security and make the appropriate payments and such, so I was never able to do mine in 2007. Now I have "a guy" who will set it up for me and explain it all to me so I know what the heck I'm doing...
As always, don't assume what I say is entirely accurate. Consult your accountant for the most accurate advice.
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
snipped-for-privacy@webtv.net (N O) wrote:

you didn't, then I would probably talk to one or the other to see what advice they can still give you.
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
How do you break 100k without good record keeping? Forget researching, use your, (or get a) CPA but quick. Oh, and regarding the no bid contracts: Never expect anything logical from the gub'mint.
gl with the audit.
jc

Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
joe wrote in message ...

Last week when I had my taxes done, I have a home office too, the CPA said that new for this year, most of the records and worksheets he keeps on file are privileged. He did say, if the IRS audits me and I decide to handle it on my own, without contacting him, all bets are off, and all of his records are fair game too. Whatever that means. :-)
Cheri
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
snipped-for-privacy@webtv.net (N O) writes:

Yeah, funny how the word "patriot" is NEVER applied to those of us that don't mind paying taxes.
Ok, there may be no "us", just me.
Well, ok "enthusiastic" may be overstating it, you win.

Based on what you wrote above, I think you may need a lawyer.
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
on 3/6/2008 8:56 PM Dan Espen said the following:

Yeah, why aren't they out catching real criminals? Oh! Never mind! That's what is said to the cops when one is caught speeding.
--

Bill
In Hamptonburgh, NY
  Click to see the full signature.
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
snipped-for-privacy@webtv.net (N O) wrote:

Sounds like you took a home-office deduction. Bad idea. As my CPA put it... "they get a hard on the second they see a home office deduction".
Well, unless you home office is a completely separate room with no "personal" stuff in it at all, I suggest you meet at their offices, if you can ;-) You'll also have some time if they ask for a document that you forgot to bring with you.
Otherwise, you may have to reorganize your home a little to comply with the applicable rules on home offices.
Consider consulting with a CPA or tax consultant.
Find all of the documents that you can which support the income and expenses you have declared on your '06 return. If your documents support the first 5 things they ask about, it will buy you a lot of credibility on the remainder. They might even terminate the audit at that point.
--
|~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~|
| Malcolm Hoar "The more I practice, the luckier I get". |
  Click to see the full signature.
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Malcolm Hoar wrote in message ...

The criteria here in CA where I am, is no personal stuff, and no clothes closet, so it can't be construed as a bedroom or family room etc., you can store files and things, but no clothes.If he goes there, he should be prepared to run back and forth at least fifty times to get the documents he didn't think about. I'd sooner trap them in my home, and chain smoke. JK, I don't smoke in my home.;-)
Cheri
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Cheri wrote:

It doesn't matter *where* one resides; the IRS rules for home office deduction are the same wherever one lives.
State taxes are a different matter; since I live in Washington State where there is no state income tax, I have no idea if home office deductions would even apply on a state return.
--
Dave
www.davebbq.com
  Click to see the full signature.
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Dave Bugg wrote in message ...

That makes sense since it's federal. I'm just so used to everything being different in this strange place I guess. :-)
Cheri
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On Mar 7, 1:40 pm, "Cheri" <gserviceatinreachdotcom> wrote:

re: I'd sooner trap them in my home, and chain smoke.
My wife and I once made an insurance salesman give us his pitch at our picnic table...in October...at sundown.
We were dressed for it, he wasn't. That was fun!
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
One book I speed read at Borders says to approach it like some on this board. It says to turn a field audit into a mail audit. The author says to say you have used up alot of time and money gathering records and cannot afford any more time to come to their office and spend an entire afteroon, and you aren't leagally compelled to allow them in your home.
He says the average adjustment is in the 2500 dollar range when you do this. He goes on to say the average for a field audit in which you cooperate and do alot fo their leg work for them is 10k or so..
I read another book that said the GAO's audit of the IRS in 2003 and 2004 was failed by the IRS! They could not account for millions of dollars of their own expenditures etc. That in itself shrinks them down to size for me.
The more I read both here and in books, the more I am prepared to defend my 14 year old business and myself. And I , like another poster, during my research have found several things I should have been deducting.
Thanks
"Who are you going to believe, me or your lying eyes?" -Groucho Marx
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

OTOH the IRS is not compelled to give you an audit. They can simply disallow all your deductions and send you a bill.

Who is the author of this book? Do you know whether or not he/she went to the federal slammer in 2005/2006?

A home repair newsgroup is such a great source of tax advice! As is reading self-help tax books! When the auditor disallows your deduction, just say "I read it on the Internet" or "This book says different."
Do not get into a Tiger cage unless you know how to defend yourself from a Tiger who is behind on quota.
Dick
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
N O wrote:

consulting and take a lot of business deductions. When the program reviews your return it will tell you if there are any high visibility items that might trigger an audit.
Many years ago, I responded to their mail inquiry by mail and I had made an accounting mistake but it did not cost me anything. Also got fined once by the state for not filing quarterly which must be done if you owe more than $800. Most annoying is that they waited 2 years to tell me and I had to pay interest. The IRS audit was also after 2 years and I made mistake of not noting the date and sent in that year's files and they corrected me.
I believe you only need to save your tax records for 7 years. I toss mine at that point.
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

The audit should take place at your accountant's office. Don't have one? Get one. If you are honest and made a couple of simple errors, no big deal. File an amended return and pay a small penalty. If you are attempting out and out fraud, it is a big deal.
Our tax laws suck, big time. Good accountants don't cost you anything, they save you money. Get one. No different that paying a plumber or auto mechanic, they specialize.
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Re: IRS Audit..! Group: alt.home.repair Date: Thu, Mar 6, 2008, 9:23pm From: snipped-for-privacy@snet.net (Edwin Pawlowski) The audit should take place at your accountant's office. Don't have one? Get one. If you are honest and made a couple of simple errors, no big deal. File an amended return and pay a small penalty.   If you are attempting out and out fraud, it is a big deal. Our tax laws suck, big time. Good accountants don't cost you anything, they save you money. Get one. No different that paying a plumber or auto mechanic, they specialize.
------------------
One of the problems I'm having is the timing. All the tax people are too busy to take this on now.
Can I file an amended return while this is going on? If so I will, as I've found almost as much good I can do as I have errors I can correct.
She sent me a copy of my return. I could not find mine to even see what she was addressing. Now that I see it I see some are just plain data entry errors, while others are explainable.
"Who are you going to believe, me or your lying eyes?" -Groucho Marx
Add pictures here
βœ–
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Site Timeline

Related Threads

HomeOwnersHub.com is a website for homeowners and building and maintenance pros. It is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.