The IRS Audit Blog

Archive for the ‘Audit Letters’ Category

Question: Will filing an ‘out of business’ form for my small business trigger a tax audit?

I haven’t had any business to report in over a year (I have another full time salaried job) and want to file a going out of business notification to the dept of revenue, but I am afraid that it will increase my chances of being audited, and I have not been fastidious with my bookkeeping in the past few years. I don’t write anything off and have just been reporting ‘zero sales-tax due’, but if i dissolve the company, will this be an audit trigger?
What happens if, in the future, I sell merchandise to friends or family? (my business was jewelry repair.) I still would have my wholesale accounts, so how do I report that? What about sales tax? Also, I think the word ‘jeweler’, as a profession, is a red flag, correct? Will I be more likely to be audited?

Answer: Dear Kat26: I wish all my clients were like you “fastidious”. Bravo! Do not be afraid to report items you have maintained records on and have complied with the law. I believe many people go out of business and never report anything. Remember also this year many business’s will close their doors and will never be seen again.

This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provide. Click on my profile to read more.
Errol Quinn Enrolled Agent Master Tax Advisor

Huelskamp constituents want change in DC

U.S. Rep. Tim Huelskamp, R-Fowler, doesn’t plan to start impeachment proceedings against President B …

House Session 2011-02-18 (18:02:48-19:03:56)

APNewsBreak: Audit finds confidential data on NJ state computers sent to auction

TRENTON, N.J. – Taxpayers’ Social Security numbers, confidential child abuse reports and personnel reviews of New Jersey workers nearly went to the highest bidder after the state sent surplus computers out for auction.

Personal Financial Planning Tips : How to Avoid an IRS Income Tax Audit

Fortis Earns $285 Million in 2010 Delivers Record Earnings for 11th Consecutive Year

ST. JOHN’S, NEWFOUNDLAND AND LABRADOR– – Fortis Inc. achieved net earnings attributable to common equity shareholders of $285 million, or $1.65 per common share, up $23 million from earnings of $262 million, or $1.54 per common share, in 2009.

1099 C Cancellation of Debt Video

Question: The IRS audited me last year, all okay now. I just was notified that a certified letter is at the post office.

Any ideas? I just checked “Where’s my refund” and it is scheduled for a date in March.

Answer: Usually, when the post office provides you the certified mail notification, there is usually the person or organization listed from whom it is coming..

Now, since you were audited in the past, there is a good chance you will be audited in the future (you are considered a high risk).. Since you are receiving a certified letter, if it is from the IRS, this is serious.. Hopefully, you did nothing questionable or illegal on past tax returns..

Just to educate you real quick, I will provide you information on the three kinds of IRS audits:

1 – correspondence audit or OOPS, did you overlook something audit.. This letter is usually sent via regular mail, but also is sent certified mail as well.. Basically, they have conflicting information in their records compared to you.. If it is something which can be fixed by showing proof via a form or correction, they are not too concerned.. You should not be either..

2 – Office audit — the IRS will ask you to come to their local IRS office and request documentation from you regarding certain expenses or deductions.. Once again, while this is more serious than the correspondence audit, it is really nothing to be too concerned.. You should take along any relevant tax preparer or CPA who helped you prepare this..

3 – Field audit — If this is the case, you should seek out a tax attorney immediately. These are the worst and most far reaching of them all.. This is also called a “blood audit”.. Basically, they want blood because they know you have materially and willing fully misstated the facts on your tax return…

Just go by and pick up the certified letter.. Not picking it up means the problem will escalate and get worse.. Who knows.. you might be receiving a check from someone..

Hope that helps..

Nation’s Leading Tax Resolution Firm Defends Taxpayer Rights in IRS Audits

As the IRS enforcement budget reaches unprecedented levels, more Americans than ever will be audited. And taxpayers threatened by IRS audits will need to know how to increase their chances of qualifying for tax relief.

TRS Files: Getting Help with IRS Audit – Don’t Let the IRS Seize Everything You Own!

Question: How does the IRS decide who to audit?

We just got a letter saying we are being audited for 2007 taxes. I don’t know why the would pick us…we even ended up owing them that year. Do they really need to try and get more money out of us?!?

Answer: They must have some suspicion about your return, but if you have all of your documentation and are on the up an up, nothing to really worry about. Be able to prove your claim. The IRS can audit even over $1 if they feel like it, but they can also be mistaken so be meticulous with your paper work and things should be cleared up. Keep a small cushion of cash in the bank just in case because you don’t want penalty fees added on to what they may decide you owe. Best!

Gopal (The Musical Mad Scientist and Entrepreneur)

http://www.gopalonline.com

Liberty Tax Service is Ready For Internal Tax Preparer Certification Program

Its Internal Tax Preparer Certification Program Has Been in Place Since 2007 (PRWeb Jan 7, 2010) Read the full story at http://www.prweb.com/releases/20100106/taxpreparercertification/prweb3415784.htm

Irs Audit Letter