Atlanta, Duluth, Tucker CPA: Preparation, Preparation, Preparation: Surviving an IRS Audit
Taxpayers who run afoul of the IRS and is dealing with seemingly overwhelming tax issues, there are words of wisdom to successfully resolve your tax problems, how to pay your taxes on a timely basis by properly utilizing withholding, estimated payments, and extensions. Though there are many things we can do to help you avoid tax problems and unnecessary penalties, we can also help you discover the general guidelines and rules of how to qualify for and process an Offer in Compromise. This is a process where both the Internal Revenue Service and the State of Georgia will reduce your bill to what you can afford to pay based upon detailed tax regulations, procedures, and careful compliance.
If you are facing an IRS audit it is time to Prepare, Prepare, Prepare for “failing to prepare if preparing to fail.” The below is a sample letter we might send to a client to get ready for an IRS audit. Is it time to upgrade your CPA/tax services today for there are some things “the software in a box” just cannot do!
It is my understanding that so far you have identified approximately $60,000 of revenue that has not yet been reported, which needs to be reflected on the books. Please note that in addition to normal IRS penalties that tax law allows when there is a substantial under-reporting of income to also assess under-reporting penalties. As an Atlanta CPA we have developed guidelines you can use to help you avoid and IRS audit http://www.hiscpa.com/avoiding-audits.html
It is my understanding that so far you have identified several thousand dollars of business expenses that has not yet been reported, which needs to be reflected on the books. It will be essential to bring all of these receipts to the meeting. I suggest recording all of these in one journal entry. Please be reminded that tax law requires the actual receipt for proper documentation and that a credit card receipt is not sufficient evidence. We have available for you 24/7 guidelines on what constitutes a valid business expense http://www.hiscpa.com/business-expenses.html
Please continue working on providing promissory notes for all of the loans they received and all loan payments. Promissory Notes to reflect all Debt that the company has. I recommend having a Promissory Note covering all of the detail (all individual loans received and all individual loans made by payment) for each year being sure to list each and every detailed item and then showing the year-end balance. For a sample promissory note see http://www.hiscpa.com/promissory-notes.html
As discussed in prior meetings please be sure to bring copies of all documentations for all years (corporate and personal) all items the IRS has requested including copies of all of the bank statements not yet provided that were originally not included in the data/returns.
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