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Audits
 
document What IRS publications deal with audits?
By Jason Watson (Google+) Here are the publications that deal with audits (examinations), appeals and payment options: Pub No. Title 1 Taxpayer Rights 3498 Examination Process 3498a Examination Process (By Mail) 556 ...
24 Oct, 2012 Views: 0 Comments: 0
document What types of audits could I face?
By Jason Watson (Google+) There are basically two types of audits: correspondence and field. Correspondence audits are simply mailed letters that the IRS sends to taxpayers requesting more information, adjusting tax returns, etc. Of the 1,564,690 examinations performed for fiscal year 2011...
16 Oct, 2012 Views: 0 Comments: 0
document What are my chances of being audited?
By Jason Watson (Google+) The IRS has recently released their enforcement and service results for fiscal year 2011 in their review of 2010 tax returns. They remain consistent in some areas yet have increased their visibility in other areas. Here we go- Income Examinations ...
16 Oct, 2012 Views: 0 Comments: 0
document What causes or triggers an IRS audit?
By Jason Watson (Google+) There are several reasons why an audit might fall into your lap: Random: The percentage of random audits is very low, but still exists. Computer Scoring: All tax returns are scored by the Discriminant Function System (DIF). Basically the IRS establishes a norm, and...
02 Jan, 2013 Views: 0 Comments: 0
document What is the period of limitations for an audit?
By Jason Watson (Google+) The statute of limitations starts on the day a tax return was due or the day it was filed, whichever is later. So, if you file your personal tax return on March 1, the period will start April 15. If you file your tax return late, such as October 1, then the statute of...
02 Jan, 2013 Views: 0 Comments: 0
document How should I respond to an IRS notice or letter?
By Jason Watson (Google+) Quickly. Do not blow these off or think you can beg for forgiveness after a deadline has passed. The IRS can be compassionate (really!), and will typically extend all deadlines only if you contact them and explain your situation. To the IRS’s credit, they provide...
02 Jan, 2013 Views: 0 Comments: 0
document What are some of the types of IRS notices and letters?
By Jason Watson (Google+) There are several notices that are the ‘lite’ version of a full blown audit or face to face examination. The IRS might send a notice adjusting child tax credit or earned income credit, correcting miscalculations or requesting a missing schedule or form from your...
02 Jan, 2013 Views: 0 Comments: 0
document Can I ignore an IRS notice or claim I never received it?
By Jason Watson (Google+) Good luck. The Tax Court recently ruled that a taxpayer had actually received a tax deficiency notice even though the IRS made a clerical mistake in addressing the notice. In this particular case and several prior cases, the taxpayer never physically touched the...
02 Jan, 2013 Views: 0 Comments: 0
document How does a joint return get handled during an audit?
By Jason Watson (Google+) Either spouse can respond, or both taxpayers can respond jointly. This applies to correspondence audits (mail) and field audits (face to face interview).
16 Oct, 2012 Views: 0 Comments: 0
document How can I prepare for my face to face or interview field audit?
By Jason Watson (Google+) Hopefully your recordkeeping skills are up to snuff. Please visit our KnowledgeBase at www.watsoncpagroup.com/kb/15 on recordkeeping to ensure you are doing a good job for the future. You can also download our article at- www.watsoncpagroup.com/Recordkeeping.pdf ...
02 Jan, 2013 Views: 0 Comments: 0
document Who can be with me at my IRS audit or conference?
By Jason Watson (Google+) Anyone can be with you at your face to face or interview field audit. They can act as witnesses, give you moral support, etc. What they cannot do is represent you. Typically only attorneys, CPAs and enrolled agents can represent you during IRS proceedings, audits,...
02 Jan, 2013 Views: 0 Comments: 0
document How much is interest and penalty on taxes owed?
By Jason Watson (Google+) There are three additional assessments the IRS can tack onto the taxes that are due- Failure to File Penalty: The IRS charges 5% per month for each month after the due date of the tax return up to a maximum of 25%. This includes extensions. So, if you extend your...
02 Jan, 2013 Views: 0 Comments: 0
document What is the appeals process?
By Jason Watson (Google+) If your audit was conducted an IRS field office, you can request a supervisor or manager review right on the spot. Remember, for a supervisor to find in your favor suggests that the initial agent is wrong, or is not interpreting tax law and your facts correctly. Office...
02 Jan, 2013 Views: 0 Comments: 0
document How can I pay my taxes or my notice of deficiency?
By Jason Watson (Google+) There are a handful of ways to pay your taxes, not only for back taxes but for any tax due: Check or Money Order: This is obvious of course, and the can be mailed or delivered in person. Make checks or money orders payable to United States Treasury, and write your...
16 Oct, 2012 Views: 0 Comments: 0
document What if I cannot pay my taxes?
By Jason Watson (Google+) The IRS is a business- they look at a risk versus reward utility curve. If they can have a guaranteed collection of an amount less than owed, the IRS might consider this a win. In other words, shooting for the proverbial moon from the IRS’s perspective might not be...
27 Nov, 2012 Views: 0 Comments: 0
document How does bankruptcy affect my unpaid taxes?
By Jason Watson (Google+) First and foremost, if you are considering bankruptcy and have unpaid taxes, you must contact an attorney specializing in bankruptcies. The rules are complex, and before you rely on the possibility of a fresh start from a tax perspective you need advice from an...
02 Jan, 2013 Views: 0 Comments: 0
document What can the IRS do if I don't pay my taxes- what is the collections process?
By Jason Watson (Google+) The IRS can do a variety of things during their collections of unpaid taxes.- Federal Tax Lien: A legal claim against all your current and future property, such as a house, car, wages, bank accounts, etc. The IRS uses this to establish their priority in your assets...
16 Oct, 2012 Views: 0 Comments: 0
document How do I appeal the collections of unpaid taxes?
By Jason Watson (Google+) There are two programs, Collection Due Process and Collection Appeals Program. IRS Publication 1660 Collection Appeal Rights details these two options in more detail.
16 Oct, 2012 Views: 0 Comments: 0