About audits

[Black Bart]

Regarding the just-posted thread on health insurance wherein we discuss heavy fines, penalties, and assorted dire consequences from not handling SEHI and EIC properly; of course we want to and should "do it right," but I don't think we should buy into the scare-scheme IRS is pushing to us and taxpayers at large.

While it's in our interest to keep taxpayers scared of the IRS boogeyman (thinkin' they're ready to jump 'em at the drop of a hat) 'cause we want 'em to give us the straight/complete info; there's so sense deluding ourselves that IRS is omnipresent and raking over everything with a fine-tooth comb.

That widely-proclaimed practitioners' "office-visits" routine last year (and again this year) is a good example. While they claimed to be hittin' our offices right and left, I'll bet very few actually were.

How about a show of hands?

[erchess]

They wrote me a form letter

but I don't remember the details. During the period when they were making the visits I made a point of taking my laptop with nearly all my files whenever I left the house. As for what paper files I do have I defy anyone to find them unless I get them for you. For a variety of reasons by the end of tax season I plan to have everything I keep relative to clients on that laptop and of course on off site backup.

[oceanlovin'ea]

Referred him to someone else

He found him someone who specialized in audits. I thought this was best for several reasons:
1. I was going to be leaving town for a couple of weeks and very busy before that. I did some preliminary work and receipts didn't add up to the deduction he claimed. So I knew this was going to be involved. He didn't have all the receipts to back up the deductions he claimed.
2. He lived in another town and so it was difficult for him to get to me to bring me things.
3. His first language is not English so on the telephone I had a hard time understanding him.

I found someone....an EA who used to work for IRS and does mostly audits to take care of him. Of course, he paid a lot more than he ever would have paid me.

He ended up having to pay some back to IRS. Plus pay for representation. I am assuming that the audit took place at the office of the EA.

He didn't come back the next year...but that was okay. I replaced him with other new clients.

Linda, EA

[kpangelinan]

I got a visit.

I got the letter than the call and shortly after the visit....it was with a local RO that does field audits whom I already had a good relationship with. She explained everything and the real reasons behind the visits.....it went great....we joked and laughed about the recent fraud cases that have come across both of our desks in the past years.

I still work with her on clients who come to me for examinations/audits.

None of my clients have ever been audited, but I've done dozens upon dozens of audits in the last couple of years where the client came to me specifically for that reason, then stay as a client after.

[taxxcpa]

I found someone....an EA who used to work for IRS and does mostly audits to take care of him. Of course, he paid a lot more than he ever would have paid me.

He ended up having to pay some back to IRS. Plus pay for representation. I am assuming that the audit took place at the office of the EA.

He didn't come back the next year...but that was okay. I replaced him with other new clients.

Linda, EA

It is much better to lose a client like that rather than to spend endless hours on something like that unless you have a lot of clients that need representation. I've only had one such client and I referred her to a friend who was both an attorney and CPA.
She did not quit coming to me and continued as a client until her death, but if she had quit, it would not have been a major dent in my practice.

If it was a $ 10,000-a-year client, then it would hurt to lose her.

[BP.]

I've done dozens upon dozens of audits in the last couple of years

As you posted, not prepared by you, but were they mainly self prepared? Or by another tax pro?