Field Audit

[D'Artagnan]

Client receives an audit notice from the IRS. He believes he has been "turned in" by a business enemy.

He decides to represent himself in the audit. I believe he is honest and very hardworking. He doesn't have much money and does not want to pay me to represent him.

The agent informs my client that this is a field audit. After two days of field audit, and finding that IRS owes my client a refund for 2004, the audit year, the auditor asks for pretty much the same truckload of info: bank statements, receipts, etc for 2005. Client is given 1 week to produce the info for 2005.

Is this a kosher practice?

According to the client, the auditor has said that "no one works as many hours as you claim to" and denied that the motor home he purchased and uses to sleep in on hay purchasing trips is actually a business use. The auditor, according to my client, says the motor home is "for pleasure" and that my client "ought to understand his point of view." Last I looked, Bakersfield was not a popular pleasure destination.

I am of course regretting that I did not more strongly urge client to allow me to represent him. As I hear these reports, admittedly after the fact, the have a very sureal quality to them.

Any feedback?

and thank you very much for the benefit of your experience.

[jainen]

the RV circuit

>>Last I looked, Bakersfield was not a popular pleasure destination<<

I'm pretty sure Bakersfield has more motor homes than hay. It's a major stop on the RV circuit.

[Black Bart]

...client..."turned in" by a business enemy.

...decides to represent himself...he is...honest...hardworking...doesn't have much money...does not want to pay me...

auditor asks for...bank statements, receipts, etc for 2005...Client is given 1 week to produce...info...Is this a kosher practice?

auditor...said..."no one works as many hours as you claim to"...denied...motor home...is...business use...client "ought to understand his point of view."

His (your) main obstacle seems to a lack of "proof" that he was in Bakersfield doing business. A log (reconstructed if necessary) would help, plus something written from co-workers/associates stating he worked there. Dated (and hopefully signed) invoices from Bakersfield vendors would prove he was in town. I haven't fought IRS about travel, but many here have ferociously debated methods and proper procedure. One suggestion was to simply have the client write out and sign a statement that he was there and did work those long hours. Then, if the agent turned it down, to say that oral evidence is valid and ask if they are calling the client a liar (some said this tactic is hogwash).

Yeah, the agent's either unreasonable/inexperienced/naive to say nobody works long hours (I know people who work 19 and sleep 5). Too, the client could ask the agent to "understand his point of view." Still, agents have lots of discretion and there's no law against being a jerk or being unreasonable. The one-week is a little quick, but not far-out (the records should be in a box at the house). "Turned-in" is irrelevant -- agent won't tell/"enemy" won't admit it.

But...the one big thing that stands out in this question is...why be concerned? Other than a natural instinct to assist clients and our fellow man in general, it doesn't seem to me that you should involve yourself. This "self-represented" client said he "doesn't have much money" (although things can be paid in installments; I know -- and so does Sears), then has the bodacious gall to say he does not want to pay you, but is now back for pro bono advice. Maybe he is hardworking, but as far as honest...well...you might ask his reaction if his buyers said "I want your hay/cow/whatever, but if you don't mind, I'd just rather not pay you for it."

Here's an analogy: Reverend Ike, a noted flim-flam TV preacher of yesteryear, once answered this question from the audience at a revival/fund-raiser:
Q: Rev. Ike, I owe the bank ten thousand dollars and they're after me. I'm worried to death and don't know what to do. Can you help me with this problem?
RI: I see. Do you have ten thousand dollars?
Q: No sir.
RI: Well then, my son; you don't have a problem. The bank has a problem.

In your situation, it seems to be that: client = bank.

[Jiggers]

Field Audit &amp; refund

If 2004 audit resulted in a refund, what flagged the auditor to look at 2005?

And it seems that you are doing lots of work for a client that doesn't want to pay you.

Don't give away your expertise for nothing, not even for a friend. Think about it. What if you were to use the services of your friend, would he not charge you?

[OldJack]

>>According to the client, the auditor has said that "no one works as many hours as you claim to" and denied that the motor home he purchased and uses to sleep in on hay purchasing trips is actually a business use. The auditor, according to my client, says the motor home is "for pleasure" and that my client "ought to understand his point of view." Last I looked, Bakersfield was not a popular pleasure destination.<<

You don't need to try helping this client as he probably wants to deduct things that are clearly personal. Yeah sure, the motor home is for business? Maybe one or two days a year. The IRS will probably audit all open years as the deduction of the motor home is probably in all open years. With a taxpayer like this, the motor home is probably just the tip of the iceberg. As taxpayers we should thank and reward his enemy for reporting him.

[Unregistered]

Ask

You should always ask-why was I selected for audit???? They will give you an answer, not names.

[Black Bart]

Hmmm...well, D-man,

we're not much help, are we? I'll move it back to the top and maybe you can get a new perspective from three different musketeers (I still think it's that dadgum "no-fee" that's ticking off the group).