How Audit Representation Can Save You Time and Money
If you remember, in another article, we talked about how to avoid a full blown income tax audit: respond in a timely manner in the beginning, be prepared, satisfy the sampling requirements, and there is a good chance the IRS may be satisfied.
Although some cases require more intense examination from the beginning, it is more common for the IRS to use the “sampling” technique in the initial interview.
This is USUALLY where things go wrong- people think they can handle it, they get comfortable, talk too much, or realize that they did not keep enough records, and then BOOM, they get hit with an examination report, and come to us.
Instead, stop the headache before it starts- contact Blue Tax as soon as you get the Initial Audit Letter. You an STOP the audit from moving forward in most cases, by satisfying the “sampling” technique.
In cases where it is more involved, one of our experienced Audit Specialists can do ALL of this:
• Draft a Persuasive Audit Report with Exhibits, Summaries and Attachments
• Be PROACTIVE and put together the requested information in an easy to understand and digestible format so that the IRS has no choice but to consider it
• Argue how your expenses are ordinary and necessary under the Internal Revenue Code
• Extract expenses from credit card statements and bank statements
• Aid the Taxpayer in creating a Reconstructed Ledger or Mileage Log
• Follow up with the IRS for Document Requests
• Reduce your balance to the lowest amount possible, or in many cases, ELIMINATING THE BALANCE ALTOGETHER
• Reopen a Closed Audit
• Deal with some of the most NOTORIOUS and DIFFICULT IRS Agents- get their cooperation now!
• Create a solid foundation with the IRS so that they can use their discretion to the highest possible amount in your favor
Can YOU do all this?
Do you have the TIME to do all this? Do you feel good about walking away from your business or family, walking away from what you are good at, and devoting your time to work that could take the average person WEEKS to complete?
And more importantly, do you WANT to do all this?
If you can handle organizing your business expenses corresponding to your schedule C and indexed by each category, then by all means, go ahead. Use this knowledge to guide you. But chances are, most people are a little lost when the categories on their Schedule C do not match up exactly to the categories on their Accounting Software, and then they start guessing, then the IRS asks more questions, and THEN… the DANCE begins!
This is an absolute nightmare. Usually, a taxpayer tells the IRS what they remember, some categories overlap, or are counted twice, and others are not even counted at all! What taxpayers don’t know is that the IRS will not make concessions for things that may be in your benefit if you don’t give it to them in a format they can recognize.
For example, if you hand the IRS your bank statements and give them a few clues on what to look for, they will not find all the possible deductions for you. In addition, they may calculate all deposits as income when in fact some deposits are not income!
This is why you need Audit Representation:
Your Audit Specialist will interview you about the business, ask you about the normal expenses you have, where you buy the goods or services from, and then retrace your steps. Of course, it helps if you kept a General Ledger and have Profit and Loss Statements. But if you don’t have those things, don’t worry, we won’t abandon you. Instead, we will retrace your steps, set up a conference, and WORK WITH YOU TO MAKE SURE YOU HAVE COUNTED AND DOCUMENTED ALL YOUR EXPENSES.
The money you spend for audit representation could easily be substituted with paying the IRS TWICE the same amount, and doing all the work yourself. THINK OF EVERYTHING YOU HAVE TO LOSE- This would include balances owed as a result of disallowed expenses, penalties assessed by the IRS, along with your valuable time and energy spent answering questions about your activities where your mind draws a blank (Most of us don’t remember where we parked a half hour ago, let alone what we were doing in June 2008).
Most of our clients went into the audit, made all the mistakes described above, wasted a lot of time and even money (days taken off for IRS appointments and for gathering information). We were able to help people who already dug themselves into a hole- how about you let us help YOU BEFORE the damage is done?
It doesn’t matter if your audit is about to start, open, or closed- call us for a free consultation, send us your IRS notices, and get a free evaluation of your case SO YOU CAN HAVE PEACE OF MIND!