LET’S discuss 10 strategies as you meet face-to-face with the Appeals Officer: 1. Learn how the appeals process works. Learn how to gather, research, file, and prepare adequately. Get a coach to guide you through the survival process. 2. First address issues that are easiest to resolve and hope to establish a pattern that will…

AFTER losing an IRS audit, you can either pay or fight. If you choose peace and quiet—pay. If you choose to fight—go to appeals. Here are 10 tips on how to prepare for the appeals conference: 1. Research the issues at hand. Read the most current cases to counter older cases that the agent may…

AFTER an audit of your tax returns by the IRS, pay if you are happy with the results or don’t want to extend the agony of dealing with the IRS. Appeal if you are not happy or feel that you have not been treated fairly. Let’s explore the benefits & drawbacks of going to the…

IF you are not satisfied with the results of your IRS audit, go to Appeals. You have a choice of either ending your misery by paying up or by continuing to fight at the Appeals Office. The appeals process is an administrative means to resolve your problems without resorting to legal action. It’s a good…

YOU’LL be happy to note that the IRS also gets audited. It’s audited by the Treasury Department to determine whether tax compliance officers conduct required filing checks in accordance with IRS policies and procedures. In particular, the Treasury Inspector General for Tax Administration (TIGTA, an agency that oversees the IRS) instructed the IRS to expand…

WHILE my audit tips usually focus on how you—the taxpayer—should conduct yourself, let’s look at how IRS agents are trained to conduct themselves when they interview you. Let’s change roles and learn how they work you over, I mean, work with you—from the agent’s perspective. IRS auditors are trained to: • Maintain a friendly and…

MUST you attend your own IRS audit? You don’t have to. This is always a tactical question that should be discussed at the early stage of an audit. I have a feeling that you’d rather not go. I don’t want you to go either. So, let’s discuss why you should not attend your funeral… I…

FIELD audits are more challenging than office audits. They are conducted at your place of business. Audits are performed by Revenue Agents who have many years of experience. They may hold advanced degrees. Many are CPAs and attorneys. Revenue Agents are the elite of the crop. They undergo intensive audit training to act as detectives…

NEITHER one, actually. You see, IRS conducts field audits where the books and records of a business are maintained. This, of course, is your office, home, warehouse, factory, or store. But I don’t like any of these locations. What I like is my own accounting office. After representing taxpayers in IRS disputes for decades, I…

There are three basic types of IRS audits: correspondence, office, and field examinations. A. Correspondence audits are generally used for specific questions that can easily be verified. B. Office audits are conducted at the various offices of the IRS and tend to be structured. C. Field audits are geared toward businesses whose books and records…

THERE are three basic types of IRS audits: correspondence, office, and field examinations. Let’s discuss correspondence audits. 1. Do not be afraid to open mails from the IRS. If you are, here’s an antidote to your dilemma: imagine that it’s a refund check. I have seen unopened mail with 30-day letters and 90-day letters (Stationary…

1. DON’T volunteer information. A typical agent is a low-key, friendly agent. They get your guard down by playing a nice guy role. Don’t be deceived by it. Remember that he (includes her) is not on your side. He may appear to be, but he is not. 2. Don’t be a blabbermouth. Taxpayers are scared…

“ Avoid low gross receipts and few but unusually high expenses.” 1. DO not hide interest and dividend income from the IRS, even if your spouse may not be aware of some savings and stock brokerage accounts. Remember Murphy’s Law—your bitter half will learn about it at a worse time later when IRS sends notice…

BE conservative with deductions if you want to avoid audits. Be aggressive and you increase your risk of IRS scrutiny. Play the odds and you invite an audit. The question then is—is it worth the risk? No, it’s not. Saving a few dollars compared with what could be a disastrous experience of dealing with the…

“ Trump’s plan will help more low-income workers to avoid taxes, not to pay income taxes.” ACCORDING to the Tax Foundation’s Taxes and Growth Model, the Trump tax plan would increase the long-run size of the economy by 7% under a higher-rate assumption, or 8% under a lower-rate assumption. The larger economy would result in…

A MAJOR thrust of the Trump Tax Plan is to bring back jobs to America. Large multi-nationals left and set up operations in foreign countries to avoid our corporate tax rates – the highest in the developed world. We need tax incentives to get them back. Corporate Tax Rates: Trump wants to cut corporate income…

HERE are proposed tax changes that could affect individuals like you and me. Individual Tax Rates: President Trump plans to simplify the tax code by condensing the current seven rates into three – 12%, 25%, and 33%. Most Americans will go down in bracket but a few will go up to a higher tax rate….

Estate Tax: AMERICANS pay taxes throughout their lives, then pay again after death. This is wrong. The death tax itself should be terminated. Yes, there are two things we can’t avoid – death and taxes. But it should not mean that taxes paid during our lives resurrect to haunt us again… after death. Alternative Minimum…

ARE you a U.S. citizen or resident working in a foreign country? Did you declare your foreign income? Did you even file a tax return? Or are you hiding from the long and lovely arms of the IRS? Can the U.S. government reach you on the other side of the globe? Unfortunately, yes. But is…

HERE are 10 tips to pull you through an audit: 1. Bring the right attitude with you.  It could spell the difference between winning and losing. 2. Be on time. Some auditors get irritated with taxpayers who come in late for an appointment. 3. Bring in only what is asked for. You might be inclined…

THERE are two approaches to prepare for an audit: organized and shoebox. Organized means arranging your records. Shoebox means simply being you—your naturally disorganized you. Let’s discuss each method so you can determine which one is best for your next audit. Why You Should be Organized: 1. This approach of presenting data in a structured…

(Part 3 of 3) 11. Your case is referred to an Automated Collection System (ACS). The ACS is a nameless, faceless computerized collection system that utilizes telephones. IRS personnel at various “call sites” have little authority to help you by way of compromise or installment but have great authority to harm you. If I may…

(Part 2 of 3) 6. YOU first receive a contact letter advising you that your return has been selected for examination. It spells out the preliminary areas for audit. You are required to contact the IRS office within 10 days. An appointment is made and you or your rep proceeds to the nearest IRS office….

(Part 1 of 3) WHILE audit penetration has, decreased, the quality of audits has improved. Auditors undergo specialization training. They conduct economic reality audits that involve looking at issues beyond your tax returns into how you survive with the amount of income that you report. This intrusion into the lifestyle of taxpayers has become disturbing….

THIS is the second of three articles on how the IRS selects tax returns for audit. Our first article discussed how tax returns are received, verified, and reviewed. This article deals with how your tax returns are stored into master files. The next and last article will discuss how the IRS scores your tax returns…

DID you ever wonder how the IRS selects tax returns to be audited? Here’s a three-part series on how tax returns are received, stored, and chosen for audit: • How e-filed and paper-filed tax returns are verified, validated, and reviewed for accuracy. • How tax returns are stored into master files. • How IRS scores…

REPUBLICAN president-elect Donald Trump unveiled a new framework for his revised tax plan. Basically, his plan simplifies the tax code – reduce tax rates, simplify provisions, and reform business taxation. His fellow Republicans control both the House and Senate so he’ll probably deliver on most of promised tax reforms that we have not seen since…

1. TAX Day is April 18, 2017: While we are accustomed to a filing tax deadline of April 15, this day falls on a Saturday so the deadline is moved to Monday April 17, but the District of Columbia observes this day as Emancipation Day, so this year’s tax deadline is pushed further back to…

“ Workers in ‘substantially similar’ jobs but of different races or ethnicity will need to be paid equal wages.” (Part 2 of 2) TEXTING While Driving: Texting is already forbidden, but new law further prohibits drivers from using smartphones for other purposes while behind the wheel — unless they’re in hands-free mode. The state’s ban on…

WHILE my columns usually focus on the serious subject of IRS audits, let’s end this year with more somber versions of Murphy’s Law: Law of IRS Audits If you are a rat pack who keeps lots of tax records, you get an IRS audit letter as soon as you discard your records. Keep your records…