Posted on 06/18/2013 5:12:37 AM PDT by SeekAndFind
Being the subject of an IRS audit is enough to make anyone sweat, but knowing your rights and the type of audit your facing can help make the process a little less stressful and drawn out.
“There’s a lot of fear when you find out you’re getting audited,” says Mary Kay Foss, a certified public accountant. She suggests contacting a professional immediately after receiving the audit notice. “If you ignore it, it’s not going to go away.”
There are four types of IRS audits and you will prepare differently for each one:
1) Correspondence Audit: This is the least severe type of audit, according to Rocket Lawyer On Call attorney Mark Rosenberg and involves the IRS sending a letter in the mail requesting more information about part of a tax return.
For instance, the agency may have questions regarding charitable deductions and request you send in receipts to substantiate your deduction. “It’s the lowest level of the audits,” says Rosenberg. “If you have the receipts or information it’s generally not an issue.”
If your tax return is legitimate and you have the data to back up any claims on your return, tax professionals say you can normally handle the situation on your own. If you don’t have the receipts or information, then you may want a professional dealing with the IRS because you could face fines, penalties and interest if you end up owing money.
“If it’s small and not that much income, the audit is often done through the mail,” says Bill Smith, managing director of accounting firm CBIZ MHM.
2) Office Audit: If the IRS has more questions about your return, then you’ll get a letter in the mail inviting you into an IRS office for the audit.
(Excerpt) Read more at foxbusiness.com ...
bkmk
The other two:
3. Field Audit: This is the most serious type of audit and involves the IRS visiting you at your home or office.
4. Random Audits: IRS agents aren’t looking for anything in particular when they send out random tax payers to review their return, according to tax experts the IRS, but they will review the entire return.
The IRS conducts these audits to determine what areas are most likely to produce additional taxes
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There is a lot more to preparing for an audit than saving receipts. In fact, that is the last thing on my mind when preparing a client for response or audit. In very short terms, how do I convince someone who does not know what they are doing that the return is correct.
Then there is the not-mentioned “5th audit” type; the politically motivated full cavity search of ones political enemies. This audit is not intended to actually find malfeasance, but is a weapon of intimidation designed to silence opposition to the regime.
Are you sure, there are not 5 types of audits?
The TCMP (Taxpayer Compliance Measurement Program) is, or perhaps was, another type of very intrusive audit.
The mother of all audits is an audit conducted on a corporation or an individual because of their political position.
#1 happened to me a few years ago, the IRS claimed that I didn’t send in a form that I know I sent in. This was for my 2009 taxes that they were just then reviewing. Supposedly the transcript was missing this form and I was told I owed about 3500 bucks. I managed to convince them (by re-sending in the completed form) that I didn’t owe them anything, but I was a nervous wreck until the process was over (about 3 months of waiting).
As I think back on it, I wonder if there was some political motivation to it...
Actually the TCMP audit is the one designed to set the parameters of what is used to select future year returns for audit. It is how they set the formula for deductions which fall above or below a “normal” amount compared to total taxable income. It is what the prior writer numbered as 4.
The full cavity audit could be hidden in that group though if someone forced it into the “ramdom” selection process for TCMP audit. They are supposed to be machine generated.
There also used to be a group of audits conducted under the Federal Joint Strike Force Program. That program was eliminated some time ago with the disbanding of the Strike Forces designed to target organized crime.
IR Manual MT 9900-26, 1-29-75 as follows:
242.12 Books and Records of An Individual
(1) An individual taxpayer may refuse to exhibit his books and records for examination on the ground that compelling him to do so might violate his right against self-incrimination under the Fifth Amendment and constitute an illegal search and seizure under the Fourth Amendment. However, in the absence of such claims, it is not error for a court to charge the jury that it may consider the refusal to produce books and records, in determining willfulness.
(2) The privilege against self-incrimination does not permit a taxpayer to refuse to obey a summons issued under IRC 7602 or a court order directing his appearance. He is required to appear and cannot use the Fifth Amendment as an excuse for failure to do so, although he may exercise it in connection with specific questions. He cannot refuse to bring his records, but may decline to submit them for inspection on Constitutional grounds. In the Vader case [U.S. v. Vader, 119 F.Supp. 330], the Government moved to hold a taxpayer in contempt of court for refusal to obey a court order to produce his books and records. He refused to submit them for inspection by the Government, basing his refusal on the Fifth Amendment. The court denied the motion to hold him in contempt, holding that disclosure of his assets would provide a starting point for a tax evasion case.
Note, in particular, where this IR Manual uses the phrase “in the absence of such claims”. In general if you do not assert your rights, explicitly and in a timely fashion, then you can be presumed to have waived them.
I don’t know how far I could get with this plan, however, it would be interesting to try it...
If I were being audited I might try to:
Tell them I have done nothing wrong and plead the 5th.
Refuse to comply in any audit activity and tell them that the audit is politically motivated since I am a conservative.
Tell them they have no controlling legal authority over me.
Force them to provide a search warrant as they are violating my 4th Amendment rights to be secure in my person, place etc.
In other words IRS, go jump yourselves.
RE: Tell them I have done nothing wrong and plead the 5th.
And you can tell them that Lois Lerner of the IRS did JUST THAT. And she’s still receiving her 6 figure salary after going on leave.
RE: In other words IRS, go jump yourselves.
You might be able to get away with it temporarily as long as the current hullabaloo is still on FEVER PITCH. But you’ll get your audit yet as soon as the fuss dies down.
We HAVE TO CHANGE THE SYSTEM OR THE STRUCTURE OF THE IRS.
A re-org if you will.
The IRS must be eliminated. It is too disdainful of American mores, and it is too powerful. Neither of those things will change with a new commissioner and whatever is the final disposition of Lois Lerner, and you’ll be back where you are when the fuss dies down.
Of course, the nation must have a revenue collection agency.
Here’s a re-org proposal...(Tell Ted Cruz to work on it ).
As a first cut, perhaps the new agency would have six regional and independent divisions. They would be located in offices around the country, and there would be no single IRS commissioner in Washington.
The six agency heads would report to Congress every six months on the activities of their agencies on penalty of perjury. There would be new offices of ombudsman for each regional agency. The ombudsmen would testify to Congress along with the agency heads every six months as to the number and type of complaints they had received and what had been the disposition of those complaints.
All salaries in the new six agencies would start at 10% below the equivalent levels in the current IRS. There would be no union in the six agencies, because the agencies must represent the interests of the country and that alone.
Something like that.
This is why I spend the $200/year to have a CPA do my taxes.
I was audited last year for 2009 & 2010. I thought it was mostly because my wife’s business runs at a loss. Maybe it was because of my political contributions, Tea Party membership, etc.
However, with the exception of creating a log to justify the mileage we wrote off, my CPA handled the rest. We did not even step into the IRS office. IMHO, going to an audit with the IRS without representation of a CPA is like going into court without a lawyer.
the type of audit your facing
MY FACING? WTF?
Targeted This is politically motivated and directed by members of the obummer administration against anyone who disagrees with them. This audit is usually conducted in conjunction with a media blitz that involves accusations of racism.
This is the type of audit I will get after thiis posting.
This is the audit that I received. The guy spent months and even interviewed my neighbors about me.
Fortunately for me, the one person I contacted at the IRS was very helpful and told me exactly what to do to alleviate the situation. The main problem I had was the sword of Damocles hanging over my head if they didn’t agree with my assertion. By the time I got a response it would have been too late to go to tax court because of their processing time, I would just owe the amount they asserted plus penalties and interest from the initial date of their claim.
I never set foot in an IRS office, just snail mail correspondence.
I’ve been considering getting hooked up with a CPA, problem is, most people guard their info when it comes to good CPAs - it’s like they think they have personal ownership in them and wouldn’t dare let you in on their secret lest you somehow spoil the well. Even my brother is like this...
If you are directed to an office audit, what are the distance limitations?
I would be surprised if there was an IRS office withing 300 miles of me.
I will recommend mine, but he is in NH.
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