How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Megan C Your Own Question

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15587
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
23669918
Type Your Tax Question Here...
Megan C is online now
A new question is answered every 9 seconds

We used a CPA to file our returns for 2011 and 2012 for our

Resolved Question:

We used a CPA to file our returns for 2011 and 2012 for our LLC.
Our CPA had deducted costs (instead of capitalizing). The amounts were really huge - $40K/member for 2011 and $80K/member for 2012.
Since our LLC is a partnership (flow through entity) this reduced our taxable income on our personal tax returns.
This year, my co owner checked the tax returns with another CPA who said the original returns were not correct and he should have capitalized them instead of deducting.
I then asked my co owner to amend the LLC returns for both the years and we filed the amended tax returns in July 2013.
IRS didn't audit or send any notices for these LLC tax returns.

We then amended our individual tax returns which resulted in a huge tax bill (due to the amended K1s which showed far less losses). I paid the tax owed and also penalties and interest. I used another CPA (3rd CPA) to amend my personal tax returns. He requested for abatement since the errors were caused by the CPA who prepared our original LLC tax returns. IRS didnt' audit or send any notices for my personal tax returns.
My questions are:

1. Will IRS accept my abatement request and refund the penalties paid?
2. Will IRS audit the original LLC return or my personal tax returns?
3. Will IRS audit the amended LLC return or my amended personal tax returns?
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

How are you today?

Customer:

Hi. Good and hope you are doing fine

Megan C :

Yes, in most cases the IRS will refund your penalties that are a result of relying on professional advice that was not sound.

Customer:

That's good to know. I filed my amended tax returns on Aug 10th. How long does it typically take for IRS to process returns

Megan C :

As for the audit, there's no formula that would tell you for certain whether or not you will be selected for audit. It's a crap shoot

Megan C :

It takes the IRS 12 weeks typically to process an amended return.

Customer:

When you say audit, do you mean my personal tax return or LLC tax returns? Would they also audit the original tax returns or just the amended ones?

Megan C :

Typically just the amended ones once they are processed, but the original return could be selected for audit

Megan C :

And they could audit either or

Megan C :

either your personal or your LLC

Megan C :

There's nothing out there that can help me say whether or not you will be audited

Customer:

If we have already amended tax returns, I am not sure why would IRS audit our original returns as they know there were errors which triggered amending of our returns?

Megan C :

It's happened before. But if you have amended the returns typically you tell them, give them the amended returns, and then they look at that

Customer:

Our 2nd CPA who amended our LLC tax returns took the most conservative approach - capitalized all costs. So, I am less concerned if this gets audited.

Megan C :

Yes, I understand

Customer:

Another question regarding the LLC tax returns is that my co owner is blaming me for signing the original LLC tax returns and is threatening to take action against me.Can he file breach of fiduciary duty against me?

Megan C :

I am not an attorney so I couldn't tell you if he had a legal case against you, but I wouldn't think so because you relied on the expertise of a CPA

Megan C :

why go to a CPA if you automatically understand all tax rules etc

Customer:

Yes, I thought so. Any chance IRS would investigate me since I signed the erroneous LLC tax returns? Or would IRS let me off since I amended LLC tax returns anyway?

Megan C :

I would not worry about the IRS. You made a mistake - you did nothing wrong

Customer:

OK. That's good to know. If IRS doesn't accept my abatement request, can I file an appeal to reconsider?

Megan C :

Yes you can! I don't think there will be a problem though. This is fairly common

Customer:

Even considering the amount of errors? I paid penalties and interest of around $10K. How do I file an appeal?

Megan C :

If they deny your request they will send you a packet that gives you the forms to appeal

Megan C :

You should be alright though

Megan C :

Is there anything else that I can assist you with today?

Megan C :

If not, please rate my response as "excellent" so that I may receive credit for assisting you today

Customer:

One final question. I applied for a installment payment plan that scheduled to start on 15th Sep. Will IRS confirm this before 15th? If my abatement request is accepted will they cancel my installment payment plan?

Megan C :

You will receive a letter from the IRS confirming the payment plan, yes. Also, when your account notes that no tax is due, the payment plan will be canceled

Customer:

Thanks for all your answers.

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15587
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 3 other Tax Specialists are ready to help you
Expert:  Megan C replied 1 year ago.
Thanks, for your positive rating. Please come back and visit MyVirtualCPA for any of your tax, finance, or social security needs. It was a pleasure working with you today.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
 
 
 
Chat Now With A Tax Professional
Megan C
Megan C
Tax Professional
15587 Satisfied Customers
Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level