Jax Tax : The first thing you do not do is tell the auditor what you just told me. You are to never make a statement that the inncorrect information was put on the return regardless of who did it.
Jax Tax : You signed the return, you are responsible and the last thing you want to do is tell the IRS that you knowingly filed an incorrect return.
Jax Tax : You need to get proof of every expense you can regardless of whether it was on the return or not, order copies of all bank statements and checks written for that year so to prove some expenses, pull all credit card statements for that year, and if you had any mileage deduction pull out your daily mileage log. This is needed to prove mileage. A daily mileage log.
Jax Tax : If all of your expenses are bad and you have no proof, just don't do anything. You will get a bill in a few months.
Jax Tax : If you have expenses you need proof of purchase and proof that they were business related.
Jax Tax : For example a expense on your bank statement for Lowes for $100 is not enough to prove the expense. You need to be able to provide what was purchased and to what extent it was used in the business.
Jax Tax : You also need to be prepared to be audit for all tax years that have been filed in the last three years and every year going forward if you lose the audit. It will not stop at one year. Customer:
Thank you, XXXXX XXXXX have all my receipts and bank statements and are going over them now to present at the audit. I'm not sure that the numbers are wrong but my accountant has gone missing...
Jax Tax : You also need to prepare yourself for a substaintial bill.
Jax Tax : 1. Start keeping perfect records of income and expenses.
will I have to pay all the amount a one time or over a few years
Jax Tax : 3. Complete form 433f request for installment agreement.
so basically I may have gotten ripped off by the preparer
Jax Tax : 4. If you plan on financing something, so it now. A tax lien will follow the debt if not paid in full plus penalties and interest.
Jax Tax : Can you have penalties removes? Not likely. Can you settle the debt? Not likely. You will likely pay the tax in full with it doubling in the first 2 years from the filing date then about every 5 after that. There is a 10 year statute of limitations so depending on the 433f and accepted payment, the longest you will pay is 10 years.
Jax Tax : Do not file an offer in compromise without a LOCAL attorney or CPA.
Jax Tax : If your preparer commuted mal practice, the IRS does not care
Thank you, XXXXX XXXXX helpful
Jax Tax : Sue him. That is all you can do. These auditors here that story all the time. Don't waste your breath. Provide the expenses you can and if you don't have to give bank statements, don't especially of they show $100k in deposits and your gross income is $50k.