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Tax Audit advice

Posted on 8/5/21 at 11:54 am
Posted by deuceiswild
South La
Member since Nov 2007
4165 posts
Posted on 8/5/21 at 11:54 am
I am being audited over my 2017 returns. My paid preparer sent them some additional documentation, and the IRS refused to accept (as he said they would likely do). And a couple months later I got another letter saying I owe money and I could face wage garnishment, etc etc. I'm bored right now and don't have the exact details in front of me, as to exactly what they want. Something regarding come "Schedule C" documents of some sort.

The amount owed is approx. 7K. It's costing me about $100/qtr in interest.

Tax guy says keep fighting and let it drag on, thinking they will go away. I do have the money to simply pay them, but of course I'd prefer to not send the govt a check for $7K and would prefer working out a plan of some sort.

I'm just wondering what the money board would suggest. Any COVID related excuses/ situations that can be taken advantage of? Other tactics?

For the record, I openly ask my tax guy to "walk the line" but not to be stupid. I don't mind being audited and if I end up having to pay some of it back then so be it. I feel I pay too much in taxes and I'm not afraid to try and get back every last dime I can from them. And if the IRS doesn't agree, then they can do a little work to come and get it. I am their favorite type of person to go after. I make good money but far from rich enough to fight them past a certain point. I'm the shmuck who keeps going to work every day to support them and who more often than not will just pay in order for them to go away.

Posted by Mingo Was His NameO
Brooklyn
Member since Mar 2016
25455 posts
Posted on 8/5/21 at 12:08 pm to
You want advice but gave no details about your actual situation other than your philosophical thoughts on taxes.
Posted by LSUFanHouston
NOLA
Member since Jul 2009
37007 posts
Posted on 8/5/21 at 12:17 pm to
What specifically are they looking for?

I'm assuming they are questioning the validity of some Sch C deductions and you/your preparer (are they a CPA?) have not yet provided sufficent documentation to justify the deduction?

If your tax guy telling you to fight alone or does he have a plan to challenge this with additional documents, going to appeals, etc?
Posted by Gorilla Ball
Member since Feb 2006
11646 posts
Posted on 8/5/21 at 7:08 pm to
I went through an audit several years ago and it seemed like it started out for example 2001 was being audited, then they decided to audit 2003 and 2002. The original amount due was about $45,000. We had received a large tax return of about $15,000 and that’s what’s started the audit.
I remember the original IRS auditor was local out of Baton Rouge- we had to appeal to the New Orleans office. I think we ended up settling for around $12,000.
I didn’t have a problem paying it- but it was the exhausting hours involved in the audit itself.
Posted by Bill Parker?
Member since Jan 2013
4468 posts
Posted on 8/6/21 at 1:15 am to
Tell them to go see your tax guy.

And then tell your tax guy to put them in an un-air conditioned broom closet with all your records and have at it and ignore them.

That's what my tax guy does.
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