Help-IRS Audit

[Bird Legs]

An acquaintance called awhile back and asked if I could handle an audit on their
tax return. So the individual brought all paper work and copies of several years
returns. We visited for a few minutes then she left.
Started going through all the info and looking at the returns. They prepared them
themselves.
Here is what I saw:
The couple, married, living together, 2 children.
Filing status on return: Head of Household.
No. of dependents: 3 Father and 2 children.
When I called the wife and asked why HOH instead of Married filing Jointly and
why her name was not on there, response was, I do not have a social security no.
This is Texas, community property state. She, the wife, does not work.
They cannot file married filing separately, because she does not have S S #.
He cannot file Head of Household because they are all living together.
Where do I go from there?
Thanks

[Jiggers]

Itin

Have the spouse obtain an ITIN. See TaxBook 3-1.

[taxmandan]

First, get your fee up front, make it a good one, then POA. If they can't/don't want to pay you, send them to the TAO office for help, they may help them.

Work thru the return and identify all the other 'errors' that you can and prepare the return as it should have been done. Contact the RA and let them know that you are working on some of the issues with the return. Ask what specific issues theIRS is looking at on the return

I would send her (wife) to get an ITIN.

When you meet with the RA you should have everything figured out and offer the adjustments to the RA to straighten out the mess.

And, not to presume anything, are they actually, legally married in the eyes of the law? Is there a marriage certificate signed by an authorized person or perhaps this is a living arrangement where they call themselves "married" but in fact are not. Might have a bearing on the way to approach it.

Daniel

[jainen]

go to the audit

>>Where do I go from there?<<

You write up an engagement letter and collect a non-refundable retainer for the first 5 or 10 hours. Then you fax a power of attorney to the auditor, determine what issue is being questioned, and schedule a reasonable time and place.

Then you confer with your clients to develop an audit strategy, which in this case probably doesn't include the clients being directly exposed to the auditor. After analyzing the return and the records, you explain the possible outcomes and decide what they want and what they will accept.

Then you go to the audit.

[Bird Legs]

Addit. Info. re Soc. Sec. #

for the spouse. She does not have a S S # based on the religious beliefs of the
religious group she belongs to.
Did not ask her what group or denomination it is.
The wife was very emphatic about the fact that before husband filed HOH
she called IRS and told the representative over the phone all the facts and circumstances.
She said that the IRS representative told her that the correct way to file in her situation
was for the husband to file as head of household claiming the children as dependents
and leave her off the return.
Asked her if she had anything in writing regarding this and she said she did not think
so but would look.
She and her husband are legally married and living together fulltime.
Thanks for any help recommendations.

[jainen]

I was in the mood

>>the IRS representative told her that the correct way to file in her situation
was for the husband to file as head of household claiming the children as dependents
and leave her off the return<<

I was in the mood this morning for one of my snippy sarcasms, but I can't beat this. Apparently there is still some hope for the IRS!

[jainen]

What I mean is

What I mean is, suppose I were that IRS agent. I get a phone call from a religious zealot who refuses to bear the mark of the beast (but doesn't mind bearing children who carry the mark). Sure I'd tell her that the husband is the head of the household and must file even if she won't. She'll think I said just what she wanted me to, and it's not my fault if she is wrong.

[Bird Legs]

Thanks

Jiggers, Taxmandan, Jaine, now, if one of you would care to come on down and
handle this for me, I would be much obliged. Might even take you out for lunch.

[jainen]

Love to

Love to, but it seems the only thing that will be achieved in this sad case is to collect the fee in advance, and I dare say you can handle that on your own.

[Jiggers]

Free lunch

Jiggers, Taxmandan, Jaine, now, if one of you would care to come on down and
handle this for me, I would be much obliged. Might even take you out for lunch.

I might take you up on the lunch, on 6th Street, during Mardi Gras!

Lots of beads and lots of sights!

[Bird Legs]

Jiggers, you are so right

especially with all the refugees from New Orleans that are still here.
There have been about 4 new cajun restaurants opened up here since they have
been here. Talk about authentic cajun food. It is for real. Jambayala, crawfish
pie, gumbo. It is here.

[taxmandan]

especially with all the refugees from New Orleans that are still here.
There have been about 4 new cajun restaurants opened up here since they have
been here. Talk about authentic cajun food. It is for real. Jambayala, crawfish
pie, gumbo. It is here.

Wish some of the refugees would open a cajun restaurant here!

Daniel