MLINDER -- the audit & the risk

[Black Bart]

I know from past posts that you do good work and are with a reputable outfit but wonder if just the volume alone of returns that your company does triggered that audit?

Didn't you say when you originally posted about it last year that your company did two or three thousand EITC returns?

What do you think? Thanks.

[taxxcpa]

Didn't you say when you originally posted about it last year that your company did two or three thousand EITC returns?

What do you think? Thanks.

Anyone who does that many EIC returns is almost a sure target for an investigation. With that many, even the most honest, well-intentioned preparer is bound to have a few bad apples for clients and get blamed for anything irregular about those returns.

[MLINDER42]

Mlinder

The preparer that was audited did 255 returns of which 185 had EITC 33 were Sched C returns .The other reason is that we are just out side DC and the largest in the area so we are easy to find to audit.

[JohnH]

I guess your firm fits the IRS definition of "low hanging fruit".

[Black Bart]

Okay, I

05-13-2010, 06:57 AM
MLINDER42
Senior Member Join Date: Oct 2008
Location: COLUMBIA MD
Posts: 242

Irs Visit

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I do not know the reg number but it came into effect 01/01/2009.It changes the due diligence requirements for EIC. It made the questions on the 8867 not able to have the answers defaulted in the software..It was suggested at a round table @ the IRS seminar in NY that you have some proof that you asked the questions on the 8867.Some preparers said they had clients fill out a a form with the same questions.I just thought that this was easier. We do over 2100 returns 85% are bank products and EIC returns.We are 50 feet from the DC line making us an easy target to audit.This auditor was totally out of his comfort zone.He had been doing corporate audits for 20 years.He did not drive a car and had to have his sister drop him off and pick him up.He was afraid to walk down the street to get a sandwich.Our neighborhood can be a little scary but after 10 years I am used to it and the money is good.

understand now that they were just checking one guy in your firm, but here's the post that I was thinking about and just now found. My reasoning is that since he was associated (I assume) with that 2100 volume firm, maybe IRS figured they would check out everybody else if they got real lucky with him.