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I have been audited for business property taxes for 2016 &

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I have been audited...

I have been audited for business property taxes for 2016 & 2017. How far back can the auditors go to gather information. Tennessee Sales and Use auditors are restricted to 3 years. These guys are looking at depreciation schedules and info as far back as 2009

Accountant's Assistant: Has anything been filed or reported?

Yes

Accountant's Assistant: Anything else you want the lawyer to know before I connect you?

Have received audit results and cannot figure what potential liability is. Don't know if total appraisal variance is in addition to what I originally filed.

Submitted: 8 months ago.Category: Tax
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11/17/2017
Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 8 months ago
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,613
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
Verified

Hello!

My name is ***** ***** I will be able to assist you today.

The IRS can generally, go back as far as they need to in order to assess the depreciation that was "allowed or allowable," but not taken.

"Generally, the IRS can include returns filed within the last three years in an audit. If we identify a substantial error, we may add additional years. We usually don’t go back more than the last six years."

https://www.irs.gov/businesses/small-businesses-self-employed/irs-audits#far-back

_____

You do have rights:

  • A right to know why the IRS is asking for information, how the IRS will use it and what will happen if the requested information is not provided.

Publication 1, Your Rights as a Taxpayer, explains your rights as a taxpayer as well as the examination, appeal, collection, and refund processes.

____

"Don't know if total appraisal variance is in addition to what I originally filed."

If you are unable to obtain the original depreciation schedule you used in 2009 then you will want to find your documentation which proves your cost basis when will be the starting point for your depreciation .

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 8 months ago

Your original purchase price is generally, your cost basis for which you start the depreciation schedule.

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Customer reply replied 8 months ago
this is not IRS, This is shelby county Tennessee tax Appraiser!
Customer reply replied 8 months ago
Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 8 months ago

The same general guidelines apply to state auditors.

Are they proposing a reassessment of your property ?

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Customer reply replied 8 months ago
make sure the lawyer has knowledge of Tennessee law. Is there a statute of limitations on collecting property tax information in Tennessee.?Tennessee Sales & use auditors can only go back 3 years.
Tax Professional: Shan-Nel Simmons, Enrolled Agent replied 8 months ago
Shan-Nel Simmons
Shan-Nel Simmons, Enrolled Agent
Category: Tax
Satisfied Customers: 43
Experience: Tax Pro and Founder at Nel's Tax Help,LLC
Verified

Tennessee statute of limitations to assess (add) additional taxes is three years (See here for the actual state law https://law.justia.com/codes/tennessee/2016/title-67/chapter-1/part-15/section-67-1-1501/) which is the same as the IRS.

However, since this is property taxes, the appraiser is probably attempting to see the original value of your business assets. Therefore, although additional taxes cannot be assessed on tax years older than 3 years back, auditors of any level of government are allowed to look at whatever documents (regardless of how old) if those documents will help or impact current assessments. I would ask why the appraiser need the documents.

All the best to you! Please leave a 5 star rating and enjoy the rest of your day.

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