Discussion:Todays IRS audit

The return took me about 30 minutes to prepare including a coffee break and he was in my office for 6 hours, took lunch and wants a rescheduled meeting when I get the above documents.

YET!!!!! My client took 25K in salary and 50K in distributions but he doesn't care about that since this is a 1040 audit.

Our government tax dollars at work!!!

Thought I would share this.

Secondly, I think you all are being a little harsh. IRS auditors are human beings just like anyone else. They can't just slam a return together like many of us do in 30 minutes. They have procedures to follow which include doing a T account of the entire bank account for the year which can add up to that six hours of time in the office. Ya sometimes on random audits they come up with very little but the scare of being audited in general keeps many people honest. Furthermore, hell, i've had one IRS audit where the taxpayer's return was complete BS and the IRS found about 25k in tax in one day. I would call that efficient.

The bottom line is I have met enough IRS auditors to know they are more reasonable than most of the trash talking that others do about them.

Not all IRS personnel are bad.

We always use to say that Field Agents were the gems of the Service; many of them would do their time and go into private business on their own, so while they could be tough, they could also understand the problems at this end.

Just consider all these examinations the cost of having an effective tax administration system. Besides, who's gonna keep you people and your clients honest? ;) Somebody's gotta fight for the government.

I've learned difficult lessons about similar subjects.

First, if someone has an accusation to make, do it through the Treasury Inspector General for Tax Administration. Second, if someone did post a real name, seek legal counsel immediately. Making unfounded accusations against an employee of the IRS on a bulletin board could seriously jeopardize their ability to practice before the IRS.

And as for digging - we make a decision whether not looking into an issue will produce any results compared with the time it will take to develop the issue. We even have a stupid name for it.

Southpark - looks like you might have a trainee and the trainee is working a training case with small issues. If those are the only issues and there is no Sch C or F, then it's definitely a training case and the issues HAVE to be worked, regardless of the potential for adjustments.

You violated the Terms of Use and I am certain you knew that removing the posts of others is absolutely forbidden.

http://www.taxalmanac.org/index.php/

TAXALMANAC.ORG_WEBSITE_USE_AND_CONTRIBUTION_TERMS

'You shall not contribute or edit any information, unless You have the legal right to submit your contributions or edits (e.g., without limitation, You are the author or licensee of any copyrighted content that You provide, and You are legally permitted to contribute it in accordance with a license or arrangements with Your employer or third parties, and in accordance with Your professional duties, which might prohibit You from providing or promoting tax or legal advice on the Site);'

HOWEVER, I will admit that I have edited out a few cuss words from other poster's posts because they added nothing to the discussion (and violated the TOA).

Did he feel that you could have done a better job? No one is perfect, but the per diem thing most of us would have appealed, I'm surprised you didn't.

The auditor just called and asked that I send a copy of the corporate tax return to his office. Looks like someone above him actually saw the "low wages" of the officer.

Anyone remember the Honeymooners. "Norton, if everything was fine they'd send me a letter saying Don't come down tomorrow morning"

I'll keep everyone posted.

This thread.

   Your saving grace is that you're a very smart guy and that you appeared on the Oreilly Factor, for which I take my hat off to you if I am wearing one, but you have turned this thread into nothing more than a bashing party, so just because I made a mistake mentioning someone by name on this thread doesn't really give you the right to act like a complete jerk. Last time I checked this site was to be an informative and learning website, not for a bunch of blowhards to toot their own horns and look down their noses at other preparers. That being said, I hope one day to have even half as much to offer as you do for your clients, I do what I do well which involves wage earners, small businesses, small payroll services, a few partnerships and S corporations but also know my limitations and when to send clients to someone else, and would like to have you on that list for more complex situations. Let's apply the one minute manager and spend 10% on the problem, I shouldn't have mentioned the Las Vegas terror by name and that of COURSE I know she doesn't get a commission, and 90% on the solution, which is.....

I did meet her boyfriend once.

Who were you playing for on the show?

Donnie - Steve and everyone are just trying to be helpful. We are all under a bit of stress right now. Hang in there. You made a mistake in mentioning the name. Just relax, we want you here and we welcome your input.

Tom

Sorry, reclassing an expense that has no effect on the tax is inefficient. Instructing the preparer and the taxpayer the proper way to go mivig forward is fine, but hey, let's inject common sense.

I have done much work with non profits and have dealt on a regular basis with this government efficiency you talk about. When DOH <state and Federal Level> waste taxpayer dollars because of stupidity, it irks me. It irks me when government employees <not workers, employees> talk about efficiency. Run your ship like a real business, deal with possible going out of business, then you will run lean and mean.

I've submitted budgets to DOH with a payroll wage line of 100,000 and a fringe benefit rate of 17% let's say. The dollar amount of the payroll fringe benefit was actually $17,038. I got a call from the so-called efficient budget analyst asking why the payroll fringe percentage did not come out properly. Can you say helloooooo, friggin fraggin hello. Wasting my time because on a $500,000 budget, the efficient analyst couldn't round. Wasted $'s requesting me to submit a new budget. Wasted my time. You have any idea how I screamed at that person. I actually had to resubmit. I changed the fringe bene % to actual of 17.3498279303 and resubmitted. The decimal places were actually calculated to 10 + spots when i sent it in.

Want another example of efficiency? Here ya go, DOH again, WIC program. If you go over your budgeted amount by $1. Yes $1, you have to spend the time to request a line item interchange, submit it, “tell the story” and then discuss with the program person who is completely uneducated in finance and then hope they approve it. No leeway, no 10% or $1,000 differential. Budget mean budget, not prediction of actual expense.

More you say, how bout this, I had a cost allocation plan because it afforded me more flexibility to be legally creative. DOH/WIC didn’t like that. I used the federally recognized <from the circulars> indirect cost rate methodology as one of my allocation methods. I did not have an approved indirect cost rate because I did not want one. Made allocated costs indirect and not direct as regular allocation methodologies do. They fought me and fought me and told me I had to follow the circulars for recording payroll expense. I did, I asked them to show me what circular reg I am not following. Couldn’t do it. They just wanted me to file for an indirect cost rate because they can cut that amount from budget without question. I didn’t accept their just because I said so. Anyway to keep a long story long. They flew someone in from Washington to meet with me in Albany. I had pool night the night before and I was sooooooooooooooo hung over it was ridiculous. This was back in my younger days. Anyway, I go in and they tell me I can’t use my methodology. I say why. I can’t. I literally ask them this way. Is the method I am using the same exact one as prescribed in the circulars? Yes. So, if I wrap my methodology in a pretty pink ribbon and submit for indirect cost rate, then I can use it. Yes. But, if I keep it wrapped up in my blue ribbon, I cant, right? Right she said. Wanna know what I said? I said Frig you federal person. Until you can legally show me I am in noncompliance I will continue to use this method. Have a nice day, hope you enjoyed your flight/drive at taxpayers expense.

Not a week later a memo was issued to every single WIC agency in the state telling them that they must be in compliance with the OMB circular and they printed out the payroll lines from within indicating that payroll must be based on time sheets/ time studies, etc must be after the fact and not on budgeted allocations, blah blah blah. The same exact 4 items that they could not say I was violating. They mailed it out strictly as a scare tactic to these other agencies and it was all because of me. I’m actually proud of that part.

You want more stories of government efficiency? I can go on. I have many friends employed by the government. I know things.

Whoever thinks national healthcare will work is delusional!

Funny, but apparently no one here deals with companies like Verizon, Bank of America (where no matter how early you post your credit card payment, they manage to receive it late) or too many others I can think about. The truth is that any bloated organization has certain inefficiencies built into it, and unless you are someone like Warren Buffet or a big celebrity, you can do little about it.

If I hang out with a bunch of losers, does that make me a better person. No, i'm me and should be judged solely on my credentials, I'mnot better because I am the best pick of the bunch.

We too often select our leaders because they are the lesser of two evils. We are too educated here to fall for that. US Government at all levels are overbloated and underproductive.

We have regulated cable, telephone utilities in the past and present, yet why no clamor to regulate the oil companies and the multi-billions of profits they receive. hmmmmm,

There are things they do and do well, but they are a repository for people who would otherwise be on the welfare dole.

Governments, like unions should stick to protection and delivery of services. The basics and that is it.

One of the most wonderful human beings I ever met was an IRS agent and became a relative by marriage.

But I'm ashamed to say that sometimes I can't resist the temptation to demonize them a bit to build myself up as the clients' protector.

Nevertheless, when there's a bad egg working at the IRS, the impact can be quite troubling due to the power issue.