4 ms·

I was audited by the “tax police” at the IRS. We had a constructive conversation, I fixed the problem, paid some more taxes and was done. I don’t think this adv

I was audited by the “tax police” at the IRS. We had a constructive conversation, I fixed the problem, paid some more taxes and was done. I don’t think this advice applies to all government investigators.

luckylion 5y ago
You can always be lucky. I was audited a few years ago, they didn't find any issues. So, just for fun, they added a special audit 3 months later. Needless to say they didn't find anything that time either. Don't talk to the police or the IRS. They are never aligned with your interests, and whether you get a reasonable person or someone who just loves to ruin your day is random.
- only_as_i_fall 5y ago
  I've never been audited, but isn't it more a case of "you must talk to the IRS or they'll simply collect what they think you owe and leave you no recourse"?
  - luckylion 5y ago
    Sure, you have to provide the stuff they request, just like you have to comply with police officers in the moment, but you don't need to (and should not) talk "help" them or give them any information beyond what you're required by law, which is often your name and not much more. If our local IRS equivalent contacted me "to clear something up", I'd defer them to my tax consultant in all cases. Assuming good faith with state employees is often a costly mistake.
- jdavis703 5y ago
  Let me precise, I was audited because I forgot a 1099 form. It was a stupid mistake on my side. If you’re being audited just so they can root around and find a problems, then yeah be careful.
toss1 5y ago
Yes, multiple people that I've known have been audited by the IRS. All were small business owners who did their own taxes (vs having them done & submitted by a CPA). At the end of all the audits, the IRS ended up writing a check to the businesses. (If you can find more overlooked deductions the exceed the overlooked taxable items, they must make the adjustments in your favor.) One good friend got audited five years in a row; maybe the local bureau chief was just sure he was up to something. The last time they were writing a check to him, it was going to be for less than $2, and the agent asked if they really wanted it — "Of course I damn well want you to write that check!". I've had a career mostly in small businesses, and always had a CPA do it with never an audit. I strongly suspect that it not only likely gets me more proper deductions that I'd miss, but also gets a lot of points in avoiding an audit, since the CPA is also putting their license on the line by signing it. I'd recommend the practice, just find a good one who charges flat rate (they do exist, just takes some looking).

luckylion 5y ago

You can always be lucky. I was audited a few years ago, they didn't find any issues. So, just for fun, they added a special audit 3 months later. Needless to say they didn't find anything that time either. Don't talk to the police or the IRS. They are never aligned with your interests, and whether you get a reasonable person or someone who just loves to ruin your day is random.

only_as_i_fall 5y ago
I've never been audited, but isn't it more a case of "you must talk to the IRS or they'll simply collect what they think you owe and leave you no recourse"?
- luckylion 5y ago
  Sure, you have to provide the stuff they request, just like you have to comply with police officers in the moment, but you don't need to (and should not) talk "help" them or give them any information beyond what you're required by law, which is often your name and not much more. If our local IRS equivalent contacted me "to clear something up", I'd defer them to my tax consultant in all cases. Assuming good faith with state employees is often a costly mistake.
jdavis703 5y ago
Let me precise, I was audited because I forgot a 1099 form. It was a stupid mistake on my side. If you’re being audited just so they can root around and find a problems, then yeah be careful.

toss1 5y ago

Yes, multiple people that I've known have been audited by the IRS. All were small business owners who did their own taxes (vs having them done & submitted by a CPA). At the end of all the audits, the IRS ended up writing a check to the businesses. (If you can find more overlooked deductions the exceed the overlooked taxable items, they must make the adjustments in your favor.) One good friend got audited five years in a row; maybe the local bureau chief was just sure he was up to something. The last time they were writing a check to him, it was going to be for less than $2, and the agent asked if they really wanted it — "Of course I damn well want you to write that check!". I've had a career mostly in small businesses, and always had a CPA do it with never an audit. I strongly suspect that it not only likely gets me more proper deductions that I'd miss, but also gets a lot of points in avoiding an audit, since the CPA is also putting their license on the line by signing it. I'd recommend the practice, just find a good one who charges flat rate (they do exist, just takes some looking).