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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4488
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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IRS audited a client of mine (Sch. C expenses) for 2009; I

Resolved Question:

IRS audited a client of mine (Sch. C expenses) for 2009; I appealed the audit and won; a no change audit.
Now IRS is auditing the same client the same Sch. C expenses for 2010.
2009 audit was with the Memphis office; the 2010 audit will be with the Cincinnati office.
Are they allowed to audit the same expenses even with a no change for the prior year?
If not, please site a reference.
Thank you
Submitted: 1 year ago.
Category: Tax
Expert:  Anne replied 1 year ago.

Anne :

Hi

Anne :

Thank you for using justanswer

Anne :


Can the IRS audit me two times in two years?


Chicago Small Business Accountant


Under the rules of double jeopardy, The Internal Revenue Service cannot audit the same income tax return a second time, if the initial examination was actually completed. That means that you would need to have received a final findings report from The IRS. They can certainly look at two different years in that time span, but if completed, they cannot look at the same year a second time.

Anne :

See below for more in depth information

Anne :

https://accountingsolutionsltd.com/accounting_articles/irs-audit/irs_audit_two_times_in_two_years

Anne :

 


I truly hope this information is helpful but please do not rate until you are satisfied. If you want to click on 1 or 2 just click on the continue to work with me button instead. You will then be able to add any other info or respond to what I have posted so far. Rating 3-5 gives me credit and a good rating but you can still converse with me.

Anne :

Here's some more information that states that the IRS can audit you for up to 5 years

Anne :

http://voices.yahoo.com/the-irs-audit-five-years-row-5152979.html?cat=3

Expert:  Lane replied 1 year ago.

Hi ... different expert here with a different answer.

If you;ll look at IRS publication 556, you'll see on page 4 this statement:

"Repeat examinations. The IRS tries to avoid repeat
examinations of the same items, but sometimes this hap-
pens. If your tax return was examined for the same items in
either of the 2 previous years and no change was pro-
posed to your tax liability, please contact the IRS as soon
as possible to see if the examination should be discontinued-
."

(...Bottom left side of the page).

I would contact them and reference this statement.

This seems to be NOT ONLY your exact situation, but yet another example of the IRS' right arm not knowing what the left arm is doing.

http://www.irs.gov/pub/irs-pdf/p556.pdf


Lane

Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4488
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 2 other Tax Specialists are ready to help you
Expert:  Anne replied 1 year ago.

The above expert is correct. IRS should not audit you 2 years in a row for the same situation.

 

However, the IRS has been concentrating on certain forms (Schedule C is among them) especially if there is an Earned Income Credit involved.

 

So while they can't audit for the same situation, they can audit your friend for another reason (such as itemized deductions, Earned Income Tax Credit, etc)

 

I suggest that you accept the above expert's answer, but please come back here and ask for myself (just put "for Anne" in the question bar) or Lane if the IRS, after being notified of their rule stating they can't audit for the same situation if they audited it within the last 2 years, they (the IRS) decides to audit for a different reason.

 

I hope this helps.

 

 

Expert:  Lane replied 1 year ago.

Thanks much.

Once you get past the front lines,this one is a no-brainer.

...both Tax Court and Supr court have held that this is not acceptable.

With the front lines, however, pointing them to p.4 for Pub. 556 will get them moving

Lane

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Lane
Lane
JD, MBA, CFP, CRPS
3628 Satisfied Customers
Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986