Help with 2006 Income Tax Return Examination

[newbie]

On this reasoning, perhaps you should consider performing your own dental work when it involves something as basic as filling a cavity.

They just came out with a book on how to do this. It's part of that series. You can get it at any Barnes & Noble.

Dentistry for Dummies


Burton M. Koss
koss@usakoss.net

LMAO - it fits so well.

[needintaxhelp]

Thank you for your responses. There are a few details that I left out.
The biggest issue is that I am having to do research after the fact to try and figure out why my tax preparer did some of the things he did. He did some pretty stupid thing on my tax return without me asking him to do so. He asked all of the questions that I would normally get asked if I used H&R Block, Turbo Tax, etc. This guy was a customer of mine and it was the first time I used him.
I do have a mileage log. I am in sales and I spend a tremendous amount of time on the road meeting with clients and visiting jobsites. My company did not start reimbursing me for gas until very late in the year. I ended up with a little over 20k in business miles (not counting to and from work). My mileage is all documented in my schedule book.
One of the problems comes in Employee Business Expenses. He asked the questions, "do you use a cell phone for work", "dry cleaning", etc to which (among a couple other quesitons) I answered "yes". I dont have proof or receipts of these expenses. He, on my answering "yes" made up numbers for 5 different expenses totalling about $5k.
The biggest issue comes in Contributions. He greatly exaggerated the contributions numbers. I did keep track of my donations to church and Goodwill but did not have receipts to back them up (I kept a spreadsheet). I gave the spreadsheets to him and he arrived with a number that was almost double.
There's no doubt this guy did some pretty stupid things which got me flagged, but I do realize now that its MY fault. I should have more closely looked over what he had prepared for me. I basically looked at the total and everything seemed in line. I still ended up oweing about $3300. I had never owed in my life. The biggest reason I owed was because I received a K-1 from my business turning a profit which cost me about $4500 in taxes. If you take that out, I would have received, roughly a $1200 return. That was completely normal, so the bottom line of the return seemed normal to me.
Again, I realize now that I should have combed over the return and will carefully examine them in the future.
I'm in a tough situation because this guy has just disappeared. One phone has been cut off and the other line just rings and rings. I have tried to contact him for the last 2 months without success. His email gets bounced back. His office (although the sign is still there) is empty.
I will gladly forward his info to anyone who wants to beleive that I am making this up and trying to cover a return I prepared.
I was just looking for some advice. I guess I should hire someone.

[myerstaxes]

Wow, sounds like my new client...His preparer did some of the same things! Inflated contributions, and EBE that is clearly not allowed since his employer fully reimbursed him...The sad part is when he went to the preparer with the audit notice, the preparer said...WOW how did I let you get away with such large deductions...
By the way, I am an EA, and retired IRS Revenue Agent...I know how engaging and friendly they can be, while they take you apart...My advice is to get a reputable EA or CPA to represent you. In my experience, taxpayers talk to much and talk themselves into bigger tax liabilities...

[bertrans]

Exam

Thank you for your responses. There are a few details that I left out.
The biggest issue is that I am having to do research after the fact to try and figure out why my tax preparer did some of the things he did. He did some pretty stupid thing on my tax return without me asking him to do so. He asked all of the questions that I would normally get asked if I used H&R Block, Turbo Tax, etc. This guy was a customer of mine and it was the first time I used him.
I do have a mileage log. I am in sales and I spend a tremendous amount of time on the road meeting with clients and visiting jobsites. My company did not start reimbursing me for gas until very late in the year. I ended up with a little over 20k in business miles (not counting to and from work). My mileage is all documented in my schedule book.
One of the problems comes in Employee Business Expenses. He asked the questions, "do you use a cell phone for work", "dry cleaning", etc to which (among a couple other quesitons) I answered "yes". I dont have proof or receipts of these expenses. He, on my answering "yes" made up numbers for 5 different expenses totalling about $5k.
The biggest issue comes in Contributions. He greatly exaggerated the contributions numbers. I did keep track of my donations to church and Goodwill but did not have receipts to back them up (I kept a spreadsheet). I gave the spreadsheets to him and he arrived with a number that was almost double.
There's no doubt this guy did some pretty stupid things which got me flagged, but I do realize now that its MY fault. I should have more closely looked over what he had prepared for me. I basically looked at the total and everything seemed in line. I still ended up oweing about $3300. I had never owed in my life. The biggest reason I owed was because I received a K-1 from my business turning a profit which cost me about $4500 in taxes. If you take that out, I would have received, roughly a $1200 return. That was completely normal, so the bottom line of the return seemed normal to me.
Again, I realize now that I should have combed over the return and will carefully examine them in the future.
I'm in a tough situation because this guy has just disappeared. One phone has been cut off and the other line just rings and rings. I have tried to contact him for the last 2 months without success. His email gets bounced back. His office (although the sign is still there) is empty.
I will gladly forward his info to anyone who wants to beleive that I am making this up and trying to cover a return I prepared.
I was just looking for some advice. I guess I should hire someone.

You have bared your soul, and that is admirable. You describe a textbook example of the
Jiffy- Tube- Super- Duper- Pooper Scooper -One -Stop- Shopping -Tax- Preparation- Service, whose proud motto - loudly displayed in the window of the place that becomes empty on April 15 - is; 'We Handle ALL Tax Credits And Then Some'.
I truly wish you well, as I am certain all of us do. As others here have observed, you need a CPA, EA. And even then, may the good lord have mercy on you.

[BOB W]

Curious> did the tax preparer sign the return? You appearently went to him with a specific purpose in mind since you have used HRB in the past and appearently knew HRB could not solve you problem. My guess is you let it happen intentionally. Also, You probably ran you tax return on Turbo tax first but couldn't move your fingers to put in any large amounts> or didn't know where to put the large deductions. So you opted to use someone else to do it for you.

With that said, you may not of known where the preparer did his special touch for you but you should have. Yes you can put the blame on the preparer and it will probably help you, somewhat.

When all is said and done you will owe.

[needintaxhelp]

Curious> did the tax preparer sign the return? You appearently went to him with a specific purpose in mind since you have used HRB in the past and appearently knew HRB could not solve you problem. My guess is you let it happen intentionally. Also, You probably ran you tax return on Turbo tax first but couldn't move your fingers to put in any large amounts> or didn't know where to put the large deductions. So you opted to use someone else to do it for you.

With that said, you may not of known where the preparer did his special touch for you but you should have. Yes you can put the blame on the preparer and it will probably help you, somewhat.

When all is said and done you will owe.

I understand that I will owe. There's no question about that. I used this guy not because I felt like I was in trouble but because he was a customer of mine. I felt like he was pretty sharp and since this is what he does for a living, he could do a better job than I could.
He did sign the return. His social is on it and his EIN is also.
I spoke to the IRS agent and asked for more time and told her that I still could not reach my preparer. She verified who it was and said that she had another person in last month that used the guy and they too couldnt reach him.

[JohnH]

Take a picture

Sounds as though the IRS is already familiar with him, but before you go in you might want to take a picture or two of the empty storefront where his office used to be, especially if the address is visible. That doesn't prove or disprove anything, but it shows you're trying to give them whatever info you can to verify that the person you relied upon has skipped out. You'll still owe the tax and interest, maybe even some penalties, but the addtional documentation might help you avoid some other nasty problems. (They like pictures)

[dodgedipduck]

First you said:

"I have documentation on the majority of the items in question."

Then you said:

"He, on my answering "yes" made up numbers for 5 different expenses totalling about $5k.
The biggest issue comes in Contributions. He greatly exaggerated the contributions numbers."

If I was an auditor I'd be real curious to see documentation of "greatly exaggerated" contributions.

If you are for real you need to run not walk to an EA or CPA. If your story is true, you're telling it in a way that doesn't add up. You don't have your story straight and that's not a good outcome at an audit. I'm not trying to be mean, but if you go in with the story you're telling here, you might as well kiss it goodbye.

[BP.]

Under contributions, I have non-cash donations (clothes) to Goodwill that are itemized and less than $5k and non-cash donations (furniture) to Goodwill that are itemized and less than $5k also. Finally, I made cash (actual cash in the offering plate) contributions weekly to my church of $200/week for a total of 45 weeks during 06. This gives me cash contributions which each are less than $250 but total $9000.

The above quote is from the original post. Now, the facts are starting to fall apart.

The biggest issue comes in Contributions. He greatly exaggerated the contributions numbers. I did keep track of my donations to church and Goodwill but did not have receipts to back them up (I kept a spreadsheet). I gave the spreadsheets to him and he arrived with a number that was almost double.

[Jesse]

needintaxhelp, if it indeed was your preparer that did all the inflating I truly do sympathize with you and wish you the best of luck.

However, BP your thread was what I was thinking. And it really irritates me when a taxpayer blames their preparer for all their woes and claims total innocence.

[bertrans]

needintaxhelp, if it indeed was your preparer that did all the inflating I truly do sympathize with you and wish you the best of luck.

However, BP your thread was what I was thinking. And it really irritates me when a taxpayer blames their preparer for all their woes and claims total innocence.

An innocent question about the above: what is BP? Thanks.

[BP.]

An innocent question about the above: what is BP? Thanks.

Hey you, from Philadelphia! I'm in Chester County. BP is my initials- Barb

[Jesse]

An innocent question about the above: what is BP? Thanks.

I was responding to BP's thread. I'm assuming you are thinking it was some type of abriviation like IMHO, OMG or LMAO. That's about the only one's I know. Sometimes I have a very hard time trying to firgure out my kids messages.

[bertrans]

Bp

All rightee!

[bertrans]

Bp-ii

Thanks for the info!