call from IRS questioning deduction

[taxdude71]

So I get a call today from an IRS office in Michigan (I practice in Wisconsin). Lady is questioning a deduction a client of mine has been taking on schdule C. Basically, client is a painter that travles around to different jobs. He takes a deduciton for meals. She is questioning my due deligence in allowing him to take this deduction. I told her that I asked all the appropriate questions and it appeared to justifiable. She asked me if I had a preparer checklist and I told her I'ld check my records. Phone call ended with her basically threatning me with penalties and she would talk to her supervisor and get back to me.

Anyone else had a simiallar experience? I know the due deligance standerds have changed recently, but she was talking about returns back to 2003.

[JohnH]

I'd ask her to put any questions she has in wiriting and I'll be glad to respond. Darned if I'd discuss something like this on the phone.

[S T]

How do you know

Are you sure it was from an IRS person?

Did you manage to get hisher name, badge/id number and phone number?

Do you have a power of attorney on file for this taxpayer?

Going back to 2003 even if you were indicated as third party designee on the return , that has long since expired.

Sounds suspect to me,

Sandy

[solomon]

Sounds like someone that recently read a portion of TD 9436 under the exceptions to §6694(a). From (e) of that section in TD 9436:

(4) Tax return preparer's normal office practice. The tax return preparer's normal office practice, when considered together with other facts and circumstances, such as the knowledge of the tax return preparer, indicates that the error in question would occur rarely and the normal office practice was followed in preparing the return or claim for refund in question. Such a normal office practice must be a system for promoting accuracy and consistency in the preparation of returns or claims for refund and generally would include, in the case of a signing tax return preparer, checklists, methods for obtaining necessary information from the taxpayer, a review of the prior year's return, and review procedures. Notwithstanding these rules, the reasonable cause and good faith exception does not apply if there is a flagrant error on a return or claim for refund, a pattern of errors on a return or claim for refund, or a repetition of the same or similar errors on numerous returns or claims for refund.

[Koss]

IRS Phone Call

I've never heard of the IRS initiating contact by phone in this manner.

Either you are dealing with some sort of scam, or...

Or...

If it's really legitimate, it is possible that the subject of the IRS investigation is you, and not the taxpayer. You may have somehow been targeted for review of certain returns that you prepared, due to a perceived pattern of some sort.

If I were you, I would start by trying to call the agent back, to confirm the authenticity of the original call.

You did get a callback number, right?

BMK

[BOB W]

I bet it is another preparer that has access to the return and is pulling a joke on you.

[Larmil]

I bet it is another preparer that has access to the return and is pulling a joke on you.

It could an actual IRS employee doing something unofficial. A number of my clients are IRS employees (mostly seasonal). I am not suggesting any of my clients would do such a thing, but they may know co-workers who would.

[David1980]

I bet it is another preparer that has access to the return and is pulling a joke on you.

Or the taxpayer's new preparer trying to determine how/why certain deductions were taken in prior years.

[taxea]

I agree with Koss.
First I wouldn't answer any questions on the phone unless I have a POA in hand from the caller signed by my client.
I have never known the IRS to call, out of the blue, like this.
If you have the name and ID of the employee I would attempt to verify her existance and speak with her supervisor.
If not, then do you have the phone number on caller ID? I would contact the IRS and report the call. taxea

[geekgirldany]

Yeah something is definitely going on. Just doesn't sound right. I hope you got all the person's information as suggested.

Here are a few I have encountered so far... not with IRS info though.

I receive strange phone calls from sales people lately. One called the other day wanting me to read the serial number off my printer. Just asked right out for me to read it to them. After asking what she wanted she asked to speak to the supervisor. I told her I am the owner. She hmmm around and finally said that I ordered toner from them and it was time to reorder. I told her no I did not and for her not to call again trying to trick me into buying it.

Today I got one from a guy that just said "let me talk to one of your partners". I asked him again and he said the exact same thing. I told him I was owner. He then said "you don't have any partners?". Told him no. He then said "I am setting up buy/sell agreements. Do you have any customers that need one?". I told him no and I wasn't even sure what he was talking about. He hung up. I guess he was trying to get customers that need buy/sell agreements?

Another one today wanted me to hire him to get business up for my company. He had called 8 times and emailed twice wanting to work with me. Well he fooled me today and called from a cell phone. Tried to tell him I was a small business, etc. He wanted to get customers for payroll/bookkeeping and then get a 80% commission.

I don't know where these people are coming from... really.

[BHoffman]

Agree with Koss. I think it's some sort of scam. If the IRS was interested in you, they will just show up at your door. It is way outside the realm of reason that they would call you about your client's records, but not impossible I guess. Maybe it was a "woman scorned".

I think in our dire economy scamming is going to become more common.

[LawrenceGR]

I had one once

an IRS agent called, caller ID showed IRS, I don't remember what the question was but it was more of a general question about a return. When that was over I thought it might be a hoax so I called the nunber and it was the IRS. I never heard any more about it.

[dkss]

IRS called me once

This past summer the phone rang with caller ID showing IRS. The lady was processing an amended return and told me I did not attach a form 1310. I said this is a joint return with a surviving spouse and shouldn't need a 1310. Also, it was a informational only amended return that claimed no refund amount. She insisted so I said OK let me get with the client and fax it to you. I had time to call and leave a message for the client to call me back when the lady called back and said "sorry I was wrong, I do not need the 1310. Once again I am sorry."
WOW that felt goooooooooooooood.