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Audits: IRS Agents’ Common Complaints

Audits: IRS Agents’ Common Complaints

Common Complaints of IRS Agents- And How You Can Use them To Your Advantage

1. “You Never Call Me!”
IRS Agents are required to make diligent, scheduled attempts to reach you to set up an appointment or get necessary information for your audit. If you hinder them from doing their job, you are creating a lot of problems for your case from the beginning. Whatever you do, DON’T HIDE. Don’t give them the run around, make multiple appointments and then cancel. Of course, we all have necessary and unexpected events that come up, but be courteous and prompt- it will go a LONG WAY for you. Respond to phone calls, respond to notices, follow up to make sure things are being handled correctly- they will appreciate it, and it may play a favorable hand in your case where certain choices are more to their discretion. Of course, if you hire Blue Tax, you will not have to worry about calling the IRS or speaking with them. WE DO ALL OF THAT FOR YOU.

2. “If YOU don’t know what you do, then I don’t know what you do.”
Sometimes, certain occupations and business activities are unrecognizable at a glance. For instance, if your business name is “John Wood Construction”, you can guess it is a Construction Business. But if you have a business called “Octofiber”, with no classification, no description, and no insight about your daily activities, then the IRS is already on shaky ground to set a foundation for what is considered an ordinary and necessary business expense. Our Audit Specialists are trained to write outstanding Business Profiles and Summaries of Duties.

3. “Sometimes it’s like finding a needle in a haystack.”
I know, I know- when you get the report from the IRS, you feel the same way! But consider this- if they don’t know about your role in the business, what you do, what your activities are, and the products or services you provide, then answer this- HOW are they going to find this information from bank statements with o other supporting documents, for instance? How are they going to know which vendors provided which services if you don’t tell them? Audit Documents need to be in a specific orderly format- Blue Tax Audit Specialists are familiar with a proven format the IRS appreciates. Don’t reinvent the wheel- give it to them how they want it, or better yet, let US give it to them how they want it, and let US argue why the expenses are ordinary and necessary.

“4. Save the attitude- it will only make me want to help you less.”
Disturbing, isn’t it? But guess what, it is so true in business, and in life. Just as a human (and yes, IRS agents are human!), people are likely to be less responsive to someone who is making the process harder for everyone. Answer the questions, don’t take it personally, and if the IRS Agent gets out of hand, then you definitely need some extra help, or it could prejudice your case. We are here to help you. Our Audit Specialists have a way of handling IRS Agents of various personalities resulting in favorable outcomes.

5. “I have pressure on me from my supervisor to close out your case.”
The typical scenario is this- the IRS Agent is breathing down your neck, asking for information, and rushing you to get it to them. That is because there is pressure on them to GET the information. Know this- they may not be as swift in reviewing the information as you were in getting it to them. We know this is not fair- but sometimes, that is life. You have to wait your turn. However, Blue Tax does an excellent job of following up with the IRS so that your case does not fall through the cracks.

6. “When you say you will do something, and you don’t, I notice! I also have the memory of an elephant- for all the things you DON’T want me to remember.”

Remember the expression “keeping score”? Well, you can bet that every time you extend a deadline, say you will show up and then fail to show up, or fail to respond, it will ALL BE DOCUMENTED and later, USED AGAINST YOU. This includes statements made during an audit. We had a client that told the IRS Agent “I was under a lot of stress, just had to take a little Vegas trip, it was totally personal”. Yikes. We managed to turn that around and STILL get her a partial deduction! Here at Blue Tax, we come PREPARED and FULLY ARMED to present your case in the BEST POSSIBLE LIGHT.

7. “I have SOME power to help you- if you take a few steps towards me, I can take twice as many steps to help you.”

Show some goodwill in providing information, in working with the IRS agent to decipher bank statements, ledgers or records. This will go a long way. Don’t get frustrated and throw your hands up in the air and screech “I don’t remember! Do YOU remember where YOU were in 2007, Mr. Agent?” Make a good faith attempt to find documents, make the necessary calls to get replacement documents, if applicable, and overall, be fair in the process. Remember, if you have representation, you only have to deal with US.

8. “It’s never really OVER- Audit Reconsideration is the last resort.”

Even if your audit was closed out, Audit Reconsideration is an option as a last resort. The reason that it is a last resort is because the Substantiation Packet goes to the IRS Main Service Center, the case is then assigned to an Agent, which takes more than a month alone, and then an additional 6-8 months for the case to close out completely. We follow up with the IRS to ensure your case doesn’t slip through the cracks. But remember, if it was done right the first time with someone reliable, you can get it all resolved with the assigned Agent from the beginning.

9. “I want to help you- but you’re being shifty and evasive, and under our procedures, that forces me to dig deeper into the tax return and other tax years.”
While talking too much at an audit can definitely dig you into a hole, being overly evasive or uncooperative can raise suspicion as well. To an IRS Agent, failing to provide documents, deliberately interfering with attempts to obtain information, and becoming hostile are all RED FLAGS that you may be HIDING SOMETHING. You want the buck to STOP at the conclusion of your audit, not spill over into later years.

10. “Before they hired you, your client gave me things I didn’t ask for- its like I asked for lettuce, and they gave me a potato!”
If you are handling your audit by yourself, please READ the letter (it is hard to decipher, which is why you may need a professional to help you with the audit) and RESPOND to the information being asked. For instance, if it says “Schedule E, All Rental Expenses”, then pull out your schedule E, list out every line, and provide attachments for each expense.

Remember, we can do ALL OF THIS FOR YOU, SO YOU DON’T HAVE TO!

We are not a law firm. We employ attorneys, enrolled agents, and CPA’s.

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