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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4027
Experience:  35 years tax experience, including four years at a Big 4 firm.
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IRS is auditing my taxes. One of the items they are auditing

Customer Question

IRS is auditing my taxes. One of the items they are auditing is "SchA - Mortgage Interest Expense: $4200 (2014)"
I don't have a mortgage. My tax consultant filed my taxes and I never reviewed it. What is my discourse?
Submitted: 7 months ago.
Category: Tax
Expert:  PDtax replied 7 months ago.

Hi from Just Answer. I'm PDtax.

Your recourse is to acknowledge the mistake, and pay the tax, interest and penalty for late payment of tax. Other penalties, like for fraud, won't be assessed. Mistakes happen.

Just own up to it. IRS respects honesty, and your audit will likely go much better as a result.

Thanks for asking at Just Answer. Positive feedback is appreciated. I'm PDtax.

Customer: replied 7 months ago.
Thanks. That is a relief. IRS is also auditing the following:Schedule A - Employee Business Expenses: $22599 (2013)
Schedule A - Employee Business Expenses: $29,628 (2013)They asked me to bring receipts and employer reimbursement policies. I don't think I can gather all receipts. What should I do about these items?
Expert:  PDtax replied 7 months ago.

Gather as many as you can before responding. When I represent taxpayers at audit, I ask the auditor if a test month is ok. I even let him pick, but lets say you had four full months available. I call the auditor, tell him I have four months available now, with more on the way. They are in a hurry, and he likely picks a test month. I bring the 100% month records he chose. No worries.

If you don't have all the records, you can support them with a calendar of your work appointments, car log for the mileage, credit card receipts for the meals and hotels, etc. Your employer must provide their policy so IRS can see that you are entitled to the deductions.

Please rate when I have answered your questions. I'm PDtax.

Customer: replied 7 months ago.
Thanks. That is very helpful. My audit is scheduled for 22nd of this month. I feel like there is very little time to gather much info.My main concern is to avoid any charges of fraud. Additionally, if possible, I want to avoid/ reduce additional penalties, and just pay the difference. If you have any suggestions for this, it would be very helpful!
Expert:  PDtax replied 7 months ago.

I always recommend having representation at IRS for audits. It's not emotional for the pro, and the interview techniques IRS personnel are trained to use have little impact on a tax pro with likely many years experience.

The areas you mentioned suggest to me a tax pro will be worth their fee if they can get you out of the missing records, for example. Use an enrolled agent, CPA or tax attorney. Their professionalism and experience are worth their fee. Coming from someone who gets called in for the toughest audits in my area, this is the best advice i can give to cut your total cost of the audit.


Expert:  PDtax replied 7 months ago.

You are likely not exposed to assertions of fraud. Mistakes happen. But if they have found a few 'soft areas' that might harvest some tax $$, then you are even more in need of a tax pro.

Customer: replied 7 months ago.
Thanks. Are you able to recommend me a cost-viable professional to represent my case to IRS?
Expert:  PDtax replied 7 months ago.

Sorry, we can't make specific service recommendations at the site.

Good luck, and thanks again from just answer. Positive feedback is appreciated. I'm PDtax.

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