So I got the call a couple of weeks ago - followed up by a letter packet - that I'm being audited. Even though I've never experienced an audit before, I thot I had a pretty good idea what to do: Hire a professional, then make the auditor explain what exactly it is that they have questions about. Right?
Well, apparently there's a new, improved kind of audit out there called a National Research Program (or some-such), which is MUCH more invasive. In short, under the guise of "conducting research so that they can establish standard baselines for particular profiles of filers to store in their database against which to compare other similar filers", they are going to look at every single line item of every single form, as well as every single line of every single bank statement for the entire year. Sounds like a fishing expedition to me.
Major concerns:
1) While I truly have nothing to hide, I'm a terrible bookkeeper. So after my recent move (things still in storage) it's not going to be easy to find all these receipts, statements, etc). But I will have no choice but to re-create -from scratch - all the doco that I originally gave my preparer. I believe that I CAN support every single deduction. But can I really be expected to do that in 4 weeks?
2) My former tax guy is (I NOW know) not a registered agent. And since one of his young minions actually prepared / signed my returns that year, he's apparently the only one who can represent me (from that office). While they should know my business pretty well after doing my returns for the past 15 years, I'm a little apprehensive about being represented by a 26-yr-old green CPA who can't have too many audits under his belt - especially this kind of comprehensive audit.
3) I'm in the process of getting set up with one of DKA's people, but he is not yet familiar with my taxes (especially past years). I would feel much more confident being represented by someone of his stature, if he'd been working with me before and/or actually had prepared this return. But I'm not sure it would be worth the added expense (hrly rate and travel), considering he'd be defending someone else's return?
I think I know the answer already. But I just wanted to know if any of you have been through an audit like this and what to expect.
Oh yes, and one more interesting question... Can he insist on coming to my place of business for a "walk through"? It was a home based business, and I don't even live in that house any more!! What good would it do him to walk through my current house?
Not posting this on the general "public" forums for obvious reasons. But would love some insight. I'm a bit overwhelmed right now.
Well, apparently there's a new, improved kind of audit out there called a National Research Program (or some-such), which is MUCH more invasive. In short, under the guise of "conducting research so that they can establish standard baselines for particular profiles of filers to store in their database against which to compare other similar filers", they are going to look at every single line item of every single form, as well as every single line of every single bank statement for the entire year. Sounds like a fishing expedition to me.
Major concerns:
1) While I truly have nothing to hide, I'm a terrible bookkeeper. So after my recent move (things still in storage) it's not going to be easy to find all these receipts, statements, etc). But I will have no choice but to re-create -from scratch - all the doco that I originally gave my preparer. I believe that I CAN support every single deduction. But can I really be expected to do that in 4 weeks?
2) My former tax guy is (I NOW know) not a registered agent. And since one of his young minions actually prepared / signed my returns that year, he's apparently the only one who can represent me (from that office). While they should know my business pretty well after doing my returns for the past 15 years, I'm a little apprehensive about being represented by a 26-yr-old green CPA who can't have too many audits under his belt - especially this kind of comprehensive audit.
3) I'm in the process of getting set up with one of DKA's people, but he is not yet familiar with my taxes (especially past years). I would feel much more confident being represented by someone of his stature, if he'd been working with me before and/or actually had prepared this return. But I'm not sure it would be worth the added expense (hrly rate and travel), considering he'd be defending someone else's return?
I think I know the answer already. But I just wanted to know if any of you have been through an audit like this and what to expect.
Oh yes, and one more interesting question... Can he insist on coming to my place of business for a "walk through"? It was a home based business, and I don't even live in that house any more!! What good would it do him to walk through my current house?
Not posting this on the general "public" forums for obvious reasons. But would love some insight. I'm a bit overwhelmed right now.
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