The IRS Audit Blog

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Question: Are well noted bank statements sufficient to base a self employed taxable income off of?

I’ve ran every dollar that I’ve made/spent (self employed) through my bank account, and have noted on my check image statements what every check was for. I also have books of invoices and some receipts, though some have faded badly, or are missing or deteriorated. I’m working with a reputable accountant. I’m scared that should I ever be audited, I may not have everything that the IRS may want. I’ve filed late in the past, and paid penalties and interest for doing so. Guess I’m just wondering if that would be a big red flag, or major trouble down the road. I’ve always been 100% honest on my returns, but how does someone prove that if needed?
I’m just feeling anxious about it.

Answer: Dog, the IRS loves honest taxpayers. Don’t worry. That’s why you have an accountant. When they tell you to worry, well…The very first thing I did after starting a Company is to set up a Company bank account separate from my personal funds, but I don’t know anything about your business plan, so this may irrelevant.

Hiring preparers can be taxing

Amid complex laws, it pays to probe paid filers As the U.S. tax code has become increasingly complex, roughly 80 percent of the nation’s taxpayers have turned to paid preparers and computer software to complete their returns. But paying a professional won’t necessarily make your return accurate — and it won’t absolve you of liability.

Turbo Tax – The Way To Get It Done

Question: loan officer has client with tax challenge?

Client wants a cash out refi but has to bring tax filings current first…on order to hav all the documentation needed to apply for the refi
Long story short…the client went through hardship the last 5 years …was able to keep his house.
But tax filings fell through the cracks.
Personal tax records are sketchy.
I suggested contacting the IRS for a copy of the master file going back 5 or 6 years …in order to file accurate information and bring the filings current.
The penalties adn interest should be minimal because previous filings always got a refund.
The client’s concern is …triggering a red flag and an audit by talking in person to the IRS.
Is there a way to make a request using some standard bureaucratic paperwork procedure that is least likely to draw attention.
Is there a form used for such a request

Answer: His concern for an audit is real but there is a legal way around it. Have your client contact a Tax Attorney who can explain the process of taking care of the past tax records. This should be done as a consultation and your client should not be charged.

5 Things You Should Do Before You Have Your Taxes Prepared

Last year was a prosperous year for some, while a struggle for others, but one situation remains certain: it is time to prepare for tax season. Getting your small business taxes prepared can be a chore.

Tax Tips & Advice : How to Get Your Financial Statement Audit Started

Question: If gambling, does all winnings get reported to the irs?

i havent had a job yet so ive never had to fill an irs form out. will i have to if i join a betting site?

Answer: No, these are off-shore companies that report nothing at all to the IRS. If you cashout sums greater than $5,000 directly to your bank account, then your bank will report that activity to the IRS. Keep your withdrawals small or offshore as well and you will have no problems. If you do make a huge withdrawal then simply claim is on your taxes at the end of the year, but you can claim your losses against it.

Rife with myth

People believe in some pretty incredible things when it comes time to pay federal taxes. (Don’t be one of them.) The U.S. tax code is massive and complicated – the perfect fodder for myth-making.

Question: Can the IRS take money out of your checking account to settle what u owe them? Without your permission?

I owe the IRS about $5000 from when I got audited one year. I have $3000 in savings and $1000 in checking and I’m in fear that they will take it one day. I’ve called the IRS and put a hold on my debt because I’m not working right now. I’m currently collecting unemployment and that money in the bank is all I have.

Answer: Yes, they can. It is called a levy and they will send you a letter notifying you. The interest will continue to accumulate at 1/2 % per month.

Creating jobs from my ‘home office’

As I sat across from the IRS person, my right eye began twitching.

Preparing for an IRS audit, Part 3 of 3

Hamburg Board Finalizes Security Systems, Discusses Reorganization

Hamburg School Board vice president Bryan Hollis, left, listens as Superintendent of Schools Max Dyson makes a point during the board’s regular meeting on Thursday night. Hollis presided in the absence of Dane Weindorf, the board president.

IRS Presentation on 403(b) Final Regulations – pt 10