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Questions tagged [audit]

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13
votes
2answers
3k views

What does an IRS interview request entail when called in to verify expenses for a sole proprietor small business?

I received an IRS audit for the following: I had to call them within 10 days to confirm receiving the letter. And I've scheduled an appointment 2 weeks later. They basically said I just need to ...
24
votes
1answer
8k views

Why would the IRS ask for birth certificates or even audit a small tax return?

My daughter and her boyfriend live together, and he is the sole earner in the home. They each have a kid plus 1 together. H&R Block told them that he didn't make enough to do his return and now ...
0
votes
0answers
27 views

How to compute the “Total Adjustment Requested” when filing a dispute following a tax audit from Massachusetts?

I got audited by the state of Massachusetts, USA, due to a mistake I did when filing my 2015 Form 1 (mirror). The audit's conclusion was that I have to pay 1000 USD to Massachusetts, and in addition ...
1
vote
0answers
86 views

After checking a tax audit, Massachusetts is owing me some money: what interest should I claim?

I got audited by the state of Massachusetts, USA, due to a mistake I did when filing my 2015 Form 1 (mirror). The audit's conclusion was that I have to pay some amount to Massachusetts, which includes ...
1
vote
0answers
69 views

Goverment shutdown and the effect it would have on my current audit from where I filed my 2017 taxes in 2018

My husband and I were audited last tax season. We had been working with the IRS all year providing them everything they needed to prove our return was legitimate. About December 15th the take action ...
2
votes
0answers
95 views

What does “going concern” mean?

A local politician is spreading demeaning comments about a company that has its accounts done using a “going concern” basis. My understanding is that this just means that it is assumed that the ...
5
votes
1answer
334 views

During an IRS tax audit, are credit card charges without a receipt a valid proof of expense, or do you need a physical copy?

I'm contemplating if I should save my paper receipts or not. I charge everything to my business credit card. During an IRS audit, can you claim a credit card charge as a legal operating expense or ...
4
votes
2answers
1k views

Will the IRS ask for birth certificate and Social Security card of your dependents during a random audit?

If IRS does a random audit, will they ask for a birth certificate and Social Security card of your dependents, or does that mean they suspect something?
5
votes
1answer
177 views

Can I expect that an IRS audit will stick to specific questions?

According to an informational web page on the IRS's web site, when they conduct an audit, they will ask for a specific document and (presumably) ask specific questions relating to that document. Can ...
3
votes
1answer
46 views

Should I keep copies of my business's invoices for tax records?

As a sole proprietor in the U.S., is there a good reason to keep copies of the invoices issued to my clients? I do not personally benefit from invoices after they are paid. But is there any situation,...
5
votes
1answer
206 views

Are people who file their taxes correctly, still subjected to being randomly audited?

It is known that the IRS generally audits tax returns based on discrepancies, but are people (including those who file correctly) still subjected to being randomly audited? The National Research ...
4
votes
1answer
480 views

Foreign governments get access to details of bank account balances?

I have heard a rumor that due to the upcoming Common Reporting Standard the details of bank accounts, including all transactions, will be reported all around the industrialized world and want to know ...
5
votes
2answers
652 views

HSA distributions and tracking receipts

During a presentation regarding HSAs I was informed the IRS can audit one for an indefinite period of time. The presenter suggested we keep records of our claims for 10+ years in paper form. This ...
5
votes
1answer
152 views

Closing business bank account. What records should I download from my bank for record keeping?

We are about to close our small business bank account. I need advice on what information I should download from online-banking before I actually close the old account. I imagine that getting these ...
3
votes
1answer
90 views

How to chose EA or CPA to represent me in FTB audit (small business)?

I am considering to hire a EA or CPA to represent my small business during FTB audit. So what exactly to look for when hiring someone that would represent you in FTB case? Some criteria that comes ...
2
votes
1answer
86 views

FTB sent refund check for 2011 during audit; Does this really mean that whole audit is over for 2011?

Our business was under audit by FTB for Tax Year 2011. Few months ago we sent them corrected Tax return for Tax Year 2011. And, finally, yesterday we received check with refund. The refund is less ...
3
votes
0answers
100 views

If my business is under FTB audit, can I close my old bank account?

We plan to switch from Bank A to Bank B and we are currently under Franchise Tax Board audit. We also recently realized that account in Bank A is with outdated EIN that we forgot to update to SSN when ...
0
votes
1answer
131 views

Why does IRS propose to add in 1099-MISC income I already reported on Schedule C?

I received several 1099-MISC and reported this income on line 1 of Schedule C plus a bit more for which I did not receive any 1099-MISC. Now I'm getting a letter from the IRS proposing to change my ...
2
votes
1answer
99 views

Are there any guidelines for having a low risk of getting audited by IRS? [duplicate]

I know the question might be too broad. But maybe top 5-10 guidelines will suffice.
2
votes
1answer
211 views

Lost receipts in move… what if I'm audited?

I just moved and somehow the box of receipts I use to document expenses in case of an IRS audit was lost. I have looked and looked, but it's gone. I have no reason to believe I will be audited, but ...
0
votes
1answer
101 views

Can I avoid an audit by submitting documents early?

I make a lot of charitable donations every year (I donate 10% of my net income to my church), lots of people in my church get audited every year. Is there a way I can avoid getting audited by just ...
7
votes
1answer
3k views

What scrutiny to expect if making large purchase with physical cash? [duplicate]

I tried googling this but most answers that came up were regarding "cash" as bank deposits that a check is normally issued against. Not "cash-cash" or physical cash, as a bunch of bank notes. Say ...
1
vote
1answer
467 views

How do I get audited in India and what happens after that?

I have not filed my tax returns for 5 years. However I have a few FD's in my name and I was wondering what would happen if I were to get audited and how do these audits take place. In the bank they ...
6
votes
1answer
4k views

When does the IRS generally decide whether or not to audit your tax return?

I've never been audited by the IRS, but I was just curious if the fact that I received my tax refund in any way indicates that I am less likely to be audited this year. My presumptive theory is that ...
26
votes
6answers
106k views

Found an old un-cashed paycheck. How long is it good for? What to do if it's expired?

I just found a paycheck from my old work that is dated August 5th, 2013. It's for over $300 and I'm wondering if it will still go through. I'm worried that it will bounce or there will be some issue ...
11
votes
4answers
40k views

If someone gives me cash legally, can my deposit trigger an audit for them?

I understand that making a large cash deposit can trigger an IRS audit. I have about $75K to deposit. It's a mix of a loan I made to a friend by check that he paid back in cash, and a cash gift from ...
6
votes
1answer
3k views

How do banks prevent fraud in international wire transfers?

How does the international banking system prevent fraud in wire transfers? Specifically suppose a wire transfer from a bank in China to a bank in the United States is done. How does the bank in the ...
5
votes
1answer
1k views

How to dispute a balance transfer that never posted with other creditor?

Three months ago, I did a credit union credit card balance transfer at 0% to pay down three student PLUS loans. In the payments, the account number and sequence number for the three loans were given. ...
4
votes
2answers
13k views

Is it necessary to file taxes if you've made less than $15,000 for the year?

I'm asking on behalf of a friend, who, last year, worked 5 weeks through a temporary placement agency earning ~$400/week after taxes (~$550/week before taxes), and also worked 6 months at an ...
8
votes
1answer
652 views

Which side has burden of proof to reopen a US income tax return after three years?

This came out of a discussion with someone over how long to keep returns and backup documentation... As (layman) I understand it, in the first three years the IRS can go after a return for any reason....
9
votes
2answers
606 views

What increases your chance of being audited?

What increases your chances of being audited? Having a home office? Small business? what decreases your chances? Does hiring an accountant do your taxes makes it look more credible to IRS agents?
14
votes
1answer
566 views

If I were to get audited, what would I need?

I've been an independent contractor for about 2 months now. I'm saving receipts for all my business-related expenses, and I use Mint.com to track all my personal finances -- Everything business ...