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I'm getting a field audit, but feel like it's an irs fishing…

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I'm getting a field...

I'm getting a field audit, but feel like it's an irs fishing expedition. I've been honest with my numbers, but he's asking for all oersona l and business and savings acct info for 2015, plus December 2014 and Jan 2016

Accountant's Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?

He also wants to physically inspect my business

Submitted: 7 months ago.Category: Tax
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12/15/2017
Tax Professional: Tax.appeal.168, Tax Accountant replied 7 months ago
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,759
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
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Hello. Happy Holidays!! Thank you for choosing this Q&A service for assistance. My name is***** will be assisting you. I am prepping my response, I will respond to you shortly.

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Tax Professional: Tax.appeal.168, Tax Accountant replied 7 months ago

In brief, a field audit is the most serious type of IRS audit. Yes, you can say that they are on a fishing expedition of sorts, and yes, they are looking for something in specific. SEE BELOW:

---------------------------------

Field Audit: This is the most serious type of audit and involves the IRS visiting you at your home or office.

“The reason the field audit is more serious is the IRS auditor will ask to see other things,” says Rosenberg. “They don’t want to limit it to particular items.” While there are much fewer field audits than office or correspondence audits, Rosenberg says he wouldn’t let any client go into a field audit without representation. “It’s the most serious level of audit. If they are coming out to you, they are looking for something.”

REFERENCE SOURCE:

http://www.foxbusiness.com/features/2013/06/17/4-types-irs-audits-what-to-know-and-how-to-prepare-for-each-one.html

As suggested in the information, provided, you might want to hire representation, such as a Tax Attorney to assist you with this matter.

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Tax Professional: Tax.appeal.168, Tax Accountant replied 7 months ago

To have a clear idea as to what your rights as a taxpayer are, I would suggest that you read over Publication 1 (Your Rights as A Taxpayer) SEE BELOW:

---------------------------------

What are my rights?

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

  • A right to professional and courteous treatment by IRS employees.
  • A right to privacy and confidentiality about tax matters.
  • 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.
  • A right to representation, by oneself or an authorized representative.
  • A right to appeal disagreements, both within the IRS and before the courts.

Link to IRS Publication 1:

https://www.irs.gov/pub/irs-pdf/p1.pdf

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Customer reply replied 7 months ago
Can they ask for bank statements outside the year audited? I just don't get why I'm being audited to this degree. And, they haven't said why I'm being audited or what they are looking for. Also asking for personal each statements which have no other income besides transfers from my biz acct. Should I redact things that are personal?
Tax Professional: Tax.appeal.168, Tax Accountant replied 7 months ago

I will check on this to see if I can locate specific information relating to the field audit. I will get back to you soon.

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Tax Professional: Tax.appeal.168, Tax Accountant replied 7 months ago

What type of business do you operate?

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Tax Professional: Tax.appeal.168, Tax Accountant replied 7 months ago

IRS Field Audits are the most in-depth and detailed level of IRS audit examinations. Unlike other audit types, field audits are conducted only by IRS Revenue Agents — the most highly trained type of auditor used by the IRS. Revenue Agents typically have an accounting degree and have completed substantial tax related course work. Many are even licensed CPAs. In addition, many Revenue Agents “specialized” on a particular industry and therefore have a great deal of familiarity with the normal ranges for income and expenses for your specific type of business.

It’s not unusual for the field auditor to immediately request your bank statements and accounting records. If you do not provide them, the auditor will summon them from your bank or accountant. The auditor will then use these statements to reconcile your tax return, looking for errors and discrepancies that may lead to an expanded audit. In the case of closely held corporations, this may even lead to an audit of all the individual owners of the corporation.

Another common method for the auditor to use in a field audit is to compare your lifestyle with your reported income. If the auditor believes that you are living a lifestyle that cannot be accounted for by your income or debt, he or she will assume that you have unreported income.

Due to the invasiveness of field audit, as well as the possibility for things to spiral quickly out of control, we strongly advise that you hire a tax attorney to represent you during this type of audit. IRS Revenue Agents can seem friendly, but their pleasant demeanor is often used to garner your cooperation in order to obtain information that can be used against you later. Even innocent sounding questions are often just part of an overall attempt to get you talking and possibly paint yourself into a corner.

Contrary to popular belief, hiring a tax attorney is not a sign of guilt. Instead, it shows the agent that you take this matter seriously and are not one to be pushed around. Revenue Agents are less likely to take aggressive or unreasonable positions as a result. Furthermore, many Revenue Agents actually prefer to work with a tax professional instead of the taxpayer due to the ease of communication.

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Customer reply replied 7 months ago
I don't understand why I'm getting this degree of audit. Does this audit come from local level irs?
Tax Professional: Tax.appeal.168, Tax Accountant replied 7 months ago

Sorry for the delayed response, I was away from the computer all afternoon. As for why this type of audit is being conducted, I can't tell you that. I have provided you with all the information that I can regarding a Field Audit. Respectfully, ***** ***** nothing more that I can tell you.

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