The IRS Audit Blog

Archive for the ‘Audit Process’ Category

Question: I filed my taxes from 2009 on Jan.17th, I owed about $20,000 from 2006-2007 .?

I am on a payment plan and have the taxes directly taken from my paycheck. I am expected a refund of about $55,000 this year. I e-filed with no problems, but on the day of Direct Deposit Feb 12th the site says “Delay with a code 1201″. Is this an audit or just the normal procedure when you owe back taxes. FYI they are still taking the taxes out of my paycheck. It’s over 2 months already. Any help would be appreciated.

Answer: What is likely happening is that your return was pulled aside for review due to either the large refund, the fact the you have past due debt or both. It is likely that the IRS will hold the portion of the refund necessary to settle the past tax debt and send you the remainder. With such a large refund there likely will be a delay while they verify the correctness of the return.

Bulgarian Audit Office Sends Registry Agency to Prosecutor

Bulgaria’s National Audit Office (NAO) had discovered public procurement orders’ violations at the Registry Agency. NAO had conducted an audit for the period January 1, 2008 – December 31, 2009, and part of the report has been sent to the Prosecutor’s Office.

How To Avoid an IRS Tax Audit

Question: Is there a possible penalty if I screw up my tax return?

I’m trying to figure out how to claim forex losses on my ‘08 tax return and I’m not certain. Filling out schedule D would take longer than it would be worth. I’ve read in many places that I can just write the losses on line 21 of 1040.

I plan to do that and attach a copy of my brokerage statements along with a sheet showing the ‘Performance Record Approach’ of figuring the loss.

My question: If I screw this up and the IRS ends up auditing me or working on the return themselves to fix it or something else, can I be penalized?

I’m not trying to ‘cheat’ or anything and I do not think it would be viewed like that. Just perhaps a screwup since I did not have a professional do the job.

Answer: Your method will not work. You assume that a person will be reviewing your return, which isn’t the case. It’s a computer. Your brokerage sends the IRS a form which states all your sales of stock for the year. When the computer doesn’t have a Schedule D to go against, it assumes all those sales were ALL GAINS (which is rarely the case). You then will receive a notice in the mail stating that you owe the IRS an outrageous sum of money. Then the IRS will ask you to file a Schedule D to show the gains and losses.

So just file the Schedule D to begin with. It will be much easier in the long run.

WORK PRODUCT PROTECTS INTANGIBLE CONTENT

The first and obvious argument of the Government was that the Deloitte memorandum as a threshold matter could not be protected work product because Federal Rule of Civil Procedure 26(b)(3) requires that work product must be created by a party or party representative.

IRS Problems Houston IRS Harassing You? Get FAST Pain Relief!

Question: on parole and have an IRS audit that cannot prove?

I know someone that is on parole on drug related issues and they have an IRS audit that they just received from their taxes last year. They claimed someone elses children and gave that person money when the check came in. Now they do not have any proof of supported these childred financially. What will happen???

Answer: Say hello silver bracelets.

PRIMARY 2010 – 13TH CONGRESSIONAL DISTRICT: REPUBLICANS

Crowded field of six is competing for nomination as 13th District’s rep What is the most important issue facing the district right now and how would you address it? Brihan: Once Congress passed Obamacare, repealing it became the most important issue. Currently, you, the patient are in charge of selecting the course of action regarding your health [...]

Tax CPA in Houston – Tax Solutions for You and Your Business!

Question: irs audit before i can amend my return?

I made number errors that will trigger red flags in my schedule c returns but it was too late to amend. the irs has already ask me the come in for an audit.

Answer: Carefully and clearly document your income and expenses. Have all your bank statements and receipts for expenses together. The audit should focus on a limited number of items. You should document each number and if you can’t backup the number you put on your return be prepared to explain why. If you are honest and upfront with the auditor they may decide not to expand the audit into other areas/years. If the errors are large (15% of income or more) then you may wish to spring for the EA or CPA to represent you.

IRS tightens rules on prep

New regulations for paid preparers.

Ashram Mugen Videos : The IRS Audits MC2 Inc. (Part 4)

Question: How long does the IRS have to come after you if you did not file a return at all?

My fiance did not file his tax returns before he met me and I started making him do it. The last one he did not file was for the 2005 tax year, he would have gotten a refund anyway, so he doesnt owe anything. Is there a risk that we may get audited at some point later in our life and he would face penalties? Does the IRS have only a certain number of years to make a claim or can this come up at any point in our life? Thank you

Answer: The IRS has 3 years from the filing deadline or when the return is filed, whichever is later, to assess any tax. Technically an open tax year is open forever. However the IRS does not go back more than 6 tax years where a return was not filed as a matter of standard policy so basically anything from 2001 to the present that is unfiled is open for assessment and 2000 and earlier is effectively closed.

Most taxpayers have a refund coming and if that’s what it looks like the IRS will not act at all. They’ll happily keep your refunds if you don’t file within 3 years of the filing deadline. So, tax year 2004 closes for refunds tonight at midnight and tax year 2005 still has a year to go on it.

There are no penalties for late filing as long as you don’t owe any tax when you file so there’s no worries there. However the IRS will still have 3 years from the date the return is actually filed to audit it.

They don’t audit returns merely because they’re filed late. The vast majority of audits are for a single item or class of items on your return. Such as a specific charitable donation, or charitable donations in general, for example.

Few Loopholes in New Payment Rules?

In today’s Federal Register, USDA published final regulations disqualifying wealthy farmers from receiving government payments and redefining the “actively engaged in farming” rules that outlaw passive investors and silent partners from collecting farm benefits, as DTNAg Policy Editor Chris Clayton reported.

How To Bluff Your Way Through an IRS Audit