Discussion:Taxpayer agreed to flawed audit?
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Discussion Forum Index --> Advanced Tax Questions --> Taxpayer agreed to flawed audit?
Discussion Forum Index --> Tax Questions --> Taxpayer agreed to flawed audit?
| 22 October 2009 | |
| Taxpayer walked into my office after going through an audit. There are many adjustments that I will not get into because I wasn't present during the audit. However, there are some very obvious problems with the audit that are simply wrong (example SE tax calculated on Rental Income). Taxpayer signed the report and claims to not have realized what they were signing. Is client out of luck now that they have signed? Can the return be amended for such an obvious error? I am having flash backs to the 80's if you know what I mean.... | |
Death&Taxes (talk|edits) said: | 22 October 2009 |
| The auditors were better in the 80s, IMO. Have they been billed? If not, take a POA and call the audit group manager. | |
| 22 October 2009 | |
| If the audit completed in the last few days, the auditor or group manager likely has the case file. Get a POA and call the auditor first and then the group manager. Assert taxpayers' right to representation.
Taxpayers can always request an audit reconsideration, file a 1040x, or Form 843 Claim, even after signing a report. An amendment or claim will generally result in the case going back to the original examiner for review. | |
PHIL MOODY (talk|edits) said: | 23 October 2009 |
| Before you jump the gun, you need to have a very detailed talk with your client and an analysis of the records, and exactly what your client told the agent.
Some rentals are subject to SE tax. | |
Death&Taxes (talk|edits) said: | 23 October 2009 |
| And with a POA you can obtain copies of the auditor's work papers using a FOIA request, if needed. This helped me once or twice when clients tried to save a buck by not telling me of the audit and going in themselves. In the one case, I came to the conclusion my client would not shut up and said too much that confused many issues. | |
| 24 October 2009 | |
| You folks are great and have help me a bunch. Trust me, there are tons wrong with this audit and what I see is CRIMINAL. | |
| 24 October 2009 | |
| I have had some success using another way around the problem of the decline in the quality of the auditors. If the law is pretty clear and the problems are a lack of understanding or lack of desire on the part of the IRS to analyze the situation, let things go to the point where you can file a tax court petition. The govt lawyer will file a non-responsive answer that denies everything and it will get kicked back to appeals to see if a settlement can be worked out. You can request a face-to-face meeting which will result in the case being sent to your town or nearby. Then you'll get a much better qualified (and experienced) appeals officer, often a lawyer and for those of use who are older than dirt one you already know and who knows you. In that situation, you can likely reach a satisfactory result. My comment is not directly on point because your client may have fouled his post toasties by trying to handle it himself. | |
| 28 October 2009 | |
| There is a glitch in the IRS program regarding SE tax. If the auditor did not pay attention, that can inflate the amount calculated as due. | |
| 28 October 2009 | |
| My suggestion ... Put together an amended return. Provide detail and authority for everything that is being changed. At the top of the amended return, IN RED, write AUDIT RECONSIDERATION. Send the return with a cover letter to the address provided in the final audit report. You can expect that this will be a slow process, put eventually your changes will be considered (I'm assuming we are within 2 years of when the redetermined liability was paid). If you hear nothing at all within 3 months, submit everything once again and mark the return "AUDIT RECONSIDERATION - SECOND REQUEST". If you still have heard nothing within another month, get the Taxpayer Advocate involved. | |
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