Audit by Mail of Schedule C

[Nashville]

Hierarchy of Audit Venues

You can always ask to convert the examination into a face-to-face office audit...It is unlikely that they will say no.

Yes, but does not the client run the risk of such an audit being more aggressive?

I've been taught the severity of engagements are as follows (from best to worst):
1) Computer Audit (mail)
2) Audit in IRS facility
3) Audit at Client's facility
4) Visit by US Treasury officers

Does anyone feel differently?

[Snaggletooth]

Stop Them

...if you can. This hasn't happened to me yet, and I don't know what I'll do when it does. This is a bad trend, and is the ultimate in a long list of audit procedures which keeps them in the office instead of getting their butts out in the field and catching tax cheaters.

[Koss]

Audit

You can always ask to convert the examination into a face-to-face office audit...

It is unlikely that they will say no.

BMK

[WhiteOleander]

I had a client who had a mail audit this past summer of 2106 items. We didn't try to do the fax at all. We just sent by mail "certified return receipt". I told my client to get ready to pay some money because they could not substantiate(sp?) alot of their deductions. After about 6 weeks, they received a "No Change" letter. So, I have no idea what happened. Maybe a new examiner, or maybe no one ever looked at the info. Just rubber stamped it through.

[OtisMozzetti]

Examination of Schedule C was requested with everything due within 30 days from date on letter to contact person named Tax Examiner.

It seems to me that it is 2 to 5 times more time-consuming and expensive to nail down everything completely than to show up with well-organized files, substantiation, and summaries.

Is this what happens when the IRS budget isn't adequate? Will the procedure prove to be counterproductive in the long run for the IRS revenue objectives?

How can tax professionals best operate under such a regime? For one thing, the fax machine at Tax Examiner almost never answers.