Audit Insurance

[Black Bart]

Joan,

Bart, we were a small company until a popular DIY tax program started selling our service. We do mostly correspondence audits or try to flip office audits to correspondence if we can, but we'll do office ones as well if they won't flip. We have contractors in most areas to handle office audits if necessary.

You're a civilian treasure trove of IRS "inside" information (it's almost like having an agent working for us here on the board).
Question: How do you get IRS to "flip" an audit from office to correspondence? I assumed that office audits were office audits and correspondence audits the same way -- never even considered that the more serious office audit could be converted. Can you advise how you do it (and never mind if I'm asking for "private" info that you aren't supposed to talk about)? Thanks.

[joanmcq]

You say, can we make this a correspondence audit?

I am in the middle of a miserable 2- year- we- are- auditing- everything-including-the-kichen-sink (literally; they lost everything in Katrina) Alabama audit. I thought there is no way this one will flip. All I did was say, can I mail everything? We compromised on the taxpayer taking in original receipts when asked for, but the auditor only talking to me, and me analyzing the reams & reams of stuff the taxpayer was gonna just dump on the auditor. Auditor is happy he doesn't have a huge pile of stuff to wade through because I make the taxpayer match it to spreadsheets I've prepared. Taxpayer will eventually be happy because if he just piled the stuff on the auditor, I'm sure it would have been disallowed (I'm approaching three reams of photocopies at this point). I get a paycheck and get to curse everytime I think I'm done with this mess and taxpayer sends me in more stuff (look, I had another mortgage I didn't report!) and another state under my belt.

[Black Bart]

For the sarcasm of paragraph one, I'm taking

You say, can we make this a correspondence audit?

back my compliment.

I am in the middle of a miserable 2- year- we- are- auditing- everything-including-the-kichen-sink (literally; they lost everything in Katrina) Alabama audit. I thought there is no way this one will flip. All I did was say, can I mail everything? We compromised on the taxpayer taking in original receipts when asked for, but the auditor only talking to me, and me analyzing the reams & reams of stuff the taxpayer was gonna just dump on the auditor. Auditor is happy he doesn't have a huge pile of stuff to wade through because I make the taxpayer match it to spreadsheets I've prepared. Taxpayer will eventually be happy because if he just piled the stuff on the auditor, I'm sure it would have been disallowed (I'm approaching three reams of photocopies at this point). I get a paycheck and get to curse everytime I think I'm done with this mess and taxpayer sends me in more stuff (look, I had another mortgage I didn't report!) and another state under my belt.

For the "inside information" in paragraph two, I'm giving it back again. Next audit, I'm giving them a 'flip it" call. Thanks.

[joanmcq]

I wasnt' trying to be sarcastic Bart! Its just sometimes that simple.

For example of simplicity. I'm filing my first OR tax court petition. I'm really nervous at doing this right; its COURT fer chrissakes and I'm afraid of not dotting every 'i' on a court doc. Figure if I was an attorney I'd know this. So, section 3 reads, "Plaintiff(s) request(s) the following relief:_______". So to make sure I'm doing it right, I read the instructions, "Section 3, Explain what you want the court to do for you".

Uh, find for my client? Change the assessment?

So I call an Oregon rep. Is it that simple? Duh, yep. So I put it into legalese: "reconsider previous determination"

[Black Bart]

Okay, and thanks again but

I wasnt' trying to be sarcastic Bart! Its just sometimes that simple.

For example of simplicity. I'm filing my first OR tax court petition. I'm really nervous at doing this right; its COURT fer chrissakes and I'm afraid of not dotting every 'i' on a court doc. Figure if I was an attorney I'd know this. So, section 3 reads, "Plaintiff(s) request(s) the following relief:_______". So to make sure I'm doing it right, I read the instructions, "Section 3, Explain what you want the court to do for you".

Uh, find for my client? Change the assessment?

So I call an Oregon rep. Is it that simple? Duh, yep. So I put it into legalese: "reconsider previous determination"

another question: About that Alabama client -- do you tell the auditor you're in California without mentioning the availability of your Alabama subcontractors so that you can plead distance? Or does that play a part at all? An excuse of inconvenience/impracticality of travel wouldn't work for me (only a few miles to IRS). Does it come down to whether or not it's more convenient or easier for the agent?

[joanmcq]

Well, we do have an IRS office within a few miles, but that probably isn't the office the audit is out of for a correspondence. If they insist on an office audit we try to get it moved to our local office. they all know us there! For the Alabama one, once the auditor got my POA, he knew I was in CA and even joked about 'you probably don't want to fly out here'. We compromised because he did want originals as far as reciepts went, so I said I would get everything organized & send in copies and the taxpayer (who lives in Mobile where the office is) would get the originals organized in the same fashion and drop them off.

Sometimes its easier to sit across from an auditor to explain stuff though.