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axkiker
12-10-2006, 12:31 PM
Well I go to the mailbox today and it looks like the IRS sent me a little xmas present. I got a letter which said they want to review my 2004 returns. I need to send them proof of all my business expenses for that year.
Ohh this is just wonderful considering I lost most of my records.
OK so I think I can contact my past employeer for alot of the things I wrote off. However if I cant how do you all think I should handle it.
We are not talking about a billion dollars here. Total business write off was around 15k. Any ideas what to do if im not able to find the records. Do I just have to bend over and take it or are their other avenues. My friend was audited and somehow he talked them down from having to pay 16k to a lil over 3k.
help help help. If I have to pay it will seriously tap into the future new boat fund and that is not cool at all.

YeLLowBoaT
12-10-2006, 12:39 PM
Well if you can't prove it, your out of luck( they should have a copy of your return... don't forget your state, most of them work off of the IRS returns, so there is anohter chance to find it.). I am pretty sure what your friend did was a "payment in compramise". its very commen, but you have to have the money right then.( 3k out of 16k does not happen... its more like you ow us 15k if you pay 10-12k now we will forget the rest) What ever you do, if you make a arangement with them to pay off what you ow, don't break it.

IT'SONLYMONEY
12-10-2006, 12:43 PM
we just had the same thing happen.
stand by, once you are in there they have the right to do you for three years consecutively. i got the latter stating they wanting to see the same stuff basically and proof of all my contributions over the year and when i went to see the irs they said, by the way we are going to do you for 03, 04, and 05. i owe them 3k at christmas time, wtf......
if you don't have reciepts get them any way possible. if you can't show proof of your ventures you are screwed. they will not negotiate because they plug all the crap into a computer and it tells them what you are going to owe. what ever reciepts you may have they will deduck it from what you owe and then the left over non provable write offs are your responsibility. ouch.
owing over 10k though you have more options in pay back and what you can afford and the irs will take money off just to get some money back.
i know this doesn't help but good luck and get your receipts

axkiker
12-10-2006, 02:54 PM
No I should not owe even close to 10k. I wrote off around 15k or so in 05. Thats what I wrote off as unreimbersed business expenses. Of course they dont give that whole amount back only the portion that was paid in tax for that amount. It was around 3k or so back. So I guess at the worst ill pay that back to them.
we just had the same thing happen.
stand by, once you are in there they have the right to do you for three years consecutively. i got the latter stating they wanting to see the same stuff basically and proof of all my contributions over the year and when i went to see the irs they said, by the way we are going to do you for 03, 04, and 05. i owe them 3k at christmas time, wtf......
if you don't have reciepts get them any way possible. if you can't show proof of your ventures you are screwed. they will not negotiate because they plug all the crap into a computer and it tells them what you are going to owe. what ever reciepts you may have they will deduck it from what you owe and then the left over non provable write offs are your responsibility. ouch.
owing over 10k though you have more options in pay back and what you can afford and the irs will take money off just to get some money back.
i know this doesn't help but good luck and get your receipts

IT'SONLYMONEY
12-10-2006, 03:30 PM
yeah for that year just cross you fingers that they don't go back two more years. they get you coming and going. they hold your money all year with no interest but they sure want their interest when you are paying them.

axkiker
12-10-2006, 03:32 PM
well actually if they go back to 2003 or earlier im safe. I have all that stuff. Its a long story but i lost all the 04 and 05 stuff.
so we will see.
yeah for that year just cross you fingers that they don't go back two more years. they get you coming and going. they hold your money all year with no interest but they sure want their interest when you are paying them.

YeLLowBoaT
12-10-2006, 03:36 PM
I'm just wondering, how do you lose 2 years of tax forms and stuff?( 2 recent years for that matter.)

ratso
12-10-2006, 03:48 PM
You could always tell them to just F#CK OFF...:D

Beer-30
12-10-2006, 03:52 PM
we just had the same thing happen.
stand by, once you are in there they have the right to do you for three years consecutively. i got the latter stating they wanting to see the same stuff basically and proof of all my contributions over the year and when i went to see the irs they said, by the way we are going to do you for 03, 04, and 05. i owe them 3k at christmas time, wtf......
if you don't have reciepts get them any way possible. if you can't show proof of your ventures you are screwed. they will not negotiate because they plug all the crap into a computer and it tells them what you are going to owe. what ever reciepts you may have they will deduck it from what you owe and then the left over non provable write offs are your responsibility. ouch.
owing over 10k though you have more options in pay back and what you can afford and the irs will take money off just to get some money back.
i know this doesn't help but good luck and get your receipts
You don't go to Lisa? Only about 3 people at my office DON'T go to her. One person at my office got audited (randomly) and she handle the whole thing. Told the person what receipts she HAD to have and that she would handle the rest. No problem. Over and done with.

axkiker
12-10-2006, 04:09 PM
I'm just wondering, how do you lose 2 years of tax forms and stuff?( 2 recent years for that matter.)
In the process of remodeling it got tossed. The lesson of the day kids dont make that mistake

IT'SONLYMONEY
12-10-2006, 06:03 PM
You don't go to Lisa? Only about 3 people at my office DON'T go to her. One person at my office got audited (randomly) and she handle the whole thing. Told the person what receipts she HAD to have and that she would handle the rest. No problem. Over and done with.
no i don't go to lisa. she also charges you 400 bucks to handle an audit where my guy does it for free. lisa is good at what she does but i have a feeling her well none getting 5 to 10k is going to blow up on people some day. i hope not. my wife practacally tripled her income from o3 to 05 and i think that is what got us flagged. my fault, i didn't keep the reciepts and the ones that i did keep i lost when we moved to the new house. everything got thrown out, making a new start "you know?" bad idea. oh well live and learn.

NashvilleBound
12-10-2006, 06:19 PM
Never, EVER, which ever one is longer, go to an IRS audit yourself. Send your CPA.

Beer-30
12-10-2006, 06:26 PM
she also charges you 400 bucks to handle an audit where my guy does it for free.
She told us $150 to handle the audit, if it ever happens. That's what she charged in the previously mentioned incident. All came out fine, as it was just a "random" audit. Nothing was out of line, so it was all good.
Her neck it out just as much as the client, so I have not doubt she knows what is safe and what is not. Sounds like you have a good CPA anyway - or I guess you'll find out now, eh?
Good luck with that.

4DAY4PLAY
12-10-2006, 09:00 PM
No I should not owe even close to 10k. I wrote off around 15k or so in 05. Thats what I wrote off as unreimbersed business expenses. Of course they dont give that whole amount back only the portion that was paid in tax for that amount. It was around 3k or so back. So I guess at the worst ill pay that back to them.
You hope you only owe them the 3k back....if you wrote off 15k in business expenses, you need to prove with reciepts the 15k. If you wouldnt have wrote off the 15k, you probably would have ended up owing them like 10k(for that tax year) instead of getting back 3k...get it? Ive been audited before, and its a pain in the ass. You have to prove almost every penny, they wont take your word for anything, and stuff that you thought were write-offs and business expenses, they determine if its legitimate, not you. Good luck, and be prepared to owe more than you got, seems like they always win.

ROZ
12-10-2006, 09:25 PM
Never, EVER, which ever one is longer, go to an IRS audit yourself. Send your CPA.
You got that right. You can sign power of attorney to your cpa and he can handle the whole thing. Likely offer and compromise if you do in fact owe, but this does seem like a relatively small case.
Incidentally people, 400.00 seems ok charge for a CPA handling a case like this. A couple of the last cases my dad was working on took many hours of work. One was just shy 20k billing, and the other was around 9k. Then again, what's 5-15k when the IRS is comming after you for nearly a mil(+) :hammerhea It's all relative, I guess...
A good CPA rate is between 185-250 per hour....(IRS defense, Valuations, and Forensic work)

axkiker
12-11-2006, 05:52 AM
OK so how do you all think I should handle this. I filed my taxes online myself so a cpa was not used. Should I go find one to handle all this or deal with it myself.

NashvilleBound
12-11-2006, 06:30 AM
Find a CPA through a friend or a tax attorney that can help you.

THATJEFFGUY
12-11-2006, 03:43 PM
OK so how do you all think I should handle this. I filed my taxes online myself so a cpa was not used. Should I go find one to handle all this or deal with it myself.
I just went thru an IRS audit last year. My CPA told me that she had done many audits and it was no biggie, just make sure I had everything organized for them. And trust me, "organization" is definitely the key ! It took me 3 months to get everything ready, but I had all my shit together for the audit and separated it all for each month. After looking thru the first 3 of months of records, the agent laughed and told me it was the most organzied records audit he had ever seen, and then said it all looked fine. He had a question about my excessive mileage that I claimed (uh oh). Although I had a written log (BS), which is all that's required, he asked for maint receipts to prove the mileage. Luckily I was able to come up with some "genuine" oil change receipts. So the repair shop owner (my buddy) calls me a couple weeks later and said the agent showed up and wanted to see the recipts for my vehicle to make sure they were genuine. Luckily he had them logged in the computer with the "correct" mileage, so everything added up. So after sweating the audit for a few months, the IRS finally sent me a letter of "no change". I would suggest coming up with some receipts and most of all, make sure it's all ORGANIZED and easy for them to go through !! Walking in the agents office with a box of receipts isn't gonna score many points ! I'd still contact a CPA too ! Good luck

axkiker
12-11-2006, 05:59 PM
well my problem is that I dont have any of it. ANY ANY ANY of it. I called a cpa today and he said that really there was nothing that a cpa could do. He said that if I called the irs and explain what has happened that they would give me some direction and what I could do. He said that if I was up front with them that it usually ends up ok.
So anyways I did call the irs. They said first get a letter from my past employeer stating what they would and would not reimberse. So thats no biggy cause they dont pay for crap. They said for mileage I could mapquest out routs etc. For cell phone I could use an average or something.
They were not total pricks about it. However im sure ill end up paying something. Hopefully just not too fokin much.
anyone been through an audit where they lost it all.
HELP

xs ultra
12-11-2006, 06:35 PM
One way and only way to look at a audit.Thru the eye of the IRS
you are guilty and till you can prove your not.You need copys of all in
question. I just been thru a audit.Remember they are auditing you to get more money and they will get some. Get a cpa or just write them a check for
what they want. Good luck you will need it.

YeLLowBoaT
12-11-2006, 06:38 PM
what state are you In?

HM
12-11-2006, 06:47 PM
Never, EVER, which ever one is longer, go to an IRS audit yourself. Send your CPA.
I agree and will suggest a step further....NEVER EVER EVER EVER go to an IRS audit period. You don't need to be there. Send a CPA or lawyer in your place. I got audited for 2003 and I never talked to the IRS personally.

HM
12-11-2006, 06:49 PM
One way and only way to look at a audit.Thru the eye of the IRS
you are guilty and till you can prove your not.You need copys of all in
question. I just been thru a audit.Remember they are auditing you to get more money and they will get some. Get a cpa or just write them a check for
what they want. Good luck you will need it.
You need a better CPA. My CPA got me a bigger refund as a result of my audit - although, my CPA went thru my tax return that I prepared via Turbo Tax and was why she was able to find more money - even after the IRS disallowed a few things.

SJP
12-11-2006, 06:53 PM
well my problem is that I dont have any of it. ANY ANY ANY of it. I called a cpa today and he said that really there was nothing that a cpa could do. He said that if I called the irs and explain what has happened that they would give me some direction and what I could do. He said that if I was up front with them that it usually ends up ok.
So anyways I did call the irs. They said first get a letter from my past employeer stating what they would and would not reimberse. So thats no biggy cause they dont pay for crap. They said for mileage I could mapquest out routs etc. For cell phone I could use an average or something.
They were not total pricks about it. However im sure ill end up paying something. Hopefully just not too fokin much.
anyone been through an audit where they lost it all.
HELP
True story - I received one of these letters requesting an audit and a day before Christmas they sent me a cancellation notice of the audit. :shift: Do you feel lucky??
Assuming you're going into the audit - how did you pay for GAS, CELL, ETC. Some had to be on Debit, Credit, or Check. Get these statements from the bank and CC company.
Build yourself a mile log, did you take clients to any football games? Ask around for ticket stubs, receipts from friends. Dinners with your old lady -- write them off - just have a rap and like some others have listed be organized - fabricate a calendar. Sell yourself on everything first, go over it with the CPA and quite possibly come in over after you spent all this preparing for the reaming they think they are going to give you. Hey IRS actually you guys won on the original 04 submissions- maybe I need to resubmit 05 returns...
LASTLY - sub the returns out moving forward - you are going to be way further ahead and they would actually have their sh!7 together...
just .02 from a punk USC kid

Scream
12-11-2006, 07:08 PM
1. Get a CPA if you're itemizing much of anything. You get audited, they go to bat for you. If the IRS finds an error and it's the CPA's fault, it's usually thier dime...an investment well worth it IMO.
2. Most IRS auditors are fresh out of college and we're not necessarily in the top 10% if you get my drift. Working for the BIG 8 (when I was an accounting student it was the BIG 8) or whatever it is now is reserved for the top notch graduates. Private practice is way more lucrative than working for the gubment, as long as you're willing to put in the time and effort.
Those that work for the government are usually just looking for a stable income and decent bennies. They don't necessarily understand the standard deductions or more complex transactions, which can be to your advantage. Sometimes when you baffle them with a seemingly rational transaction and show that you have some form of backup documentation (original or re-created) then you've got it made. If they seem to not "understand" the transaction and if they waste any of your time (and time is money) then ask to talk to the supervisor and any issues usually go away...
We get audited for our business about every 4 years and we have our CPA's handle most of it, but for the initial interview I get a crack a them and give them a tour of our facility. Most of them cannot grasp the concept of using chickens and turkeys in a manufacturing environment and get totally lost. That's when they just shrink back to the office, never to return.
Good luck, and remember you should never feel threatened or intimidated by them...if you do you can use that to your advantage as well.
Scream