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wm030303
wm030303, Enrolled Agent
Category: Tax
Satisfied Customers: 112
Experience:  I am both a CPA and EA with over 30 years of experience in solving tax related issues.
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Im going to go through and audit next week. As Im getting

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I'm going to go through and audit next week. As I'm getting ready, I've found some mistakes--some in my favor, some not. Should I correct these or just let them stand as is since that's how they appear on my tax form?

This is for our corporate tax filing, 1120. Most of the stuff has to do with travel expenses (which is something that was flagged).

wm030303 :

Hello and welcome to Just Answer.

Customer:

Hello

wm030303 :

I would suggest you only prepare for the items that have been identified in the audit. If the auditor is satisfied with your documentation and accepts the proof you could always do an amended tax return at a later date if you feel that will correct any other issues.

Customer:

The error is in one of the identified areas, travel.

wm030303 :

Well then substantiate to the auditor what documentation you do have to support any travel expenses they will make adjustments in your favor too.

Customer:

for some of our work, we pass the expenses through to the customer on the invoice. I've been recording that, incorrectly, as income (instead of breaking it out as travel). So, I've been paying the income tax on it. Should i redo it now, or, just get through the audit as is and then re-evaluate it?

wm030303 :

go through the audit and then make adjustments.

wm030303 :

The IRS would prefer that you learn the proper way to record the transactions.

Customer:

Is this true across the board? Should I stick with what was reported, and, let them point out the error of my ways as we go through it?

wm030303 :

I hope this has helped. I have sat with the IRS on many audits and best thing to do is cooperate and then adjust.

Customer:

Ok, so, I go with what i reported and then correct based on the audit. Correct?

wm030303 :

yes

Customer:

Ok, thanks. We're done.

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