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Tax audit

Discussion in 'Off Topic' started by KENOC, Feb 28, 2010.

  1. KENOC

    KENOC Portland area Member

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    Well just what I need. Our business is on VERY hard times, about to go belly-up, to the point i took a full time job last year, and just running the business part time.
    Yesterday i get a letter, that the state wants a full blown field audit on our business. And of course i am honest, but I stink at record-keeping and receipts, so am sure i am going to get screwed by them.
    Anyone here been through one of these and have any experience/advice?
  2. longcolt

    longcolt Zephyrhills, FL Active Member

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    If you have an outside CPA that prepares your tax returns, I would suggest that you consider engaging him/her to help. It helps to have someone that is experienced dealing with the IRS auditors.

    Never chat with them and volunteer anything. Simply answer questions with short direct truthful answers.

    They may have noticed a large drop in tax proceeds from your business due to the economic downturn. Plus they are attempting to dig up as much money as possible at the state and federal level right now to help balance the budget.

    Remember always, always, pay your payroll taxes first, before yourself if you own/run a business, your personal assets are exposed if you own the business, sign checks and fail to pay the Fed.
  3. Sawz

    Sawz Aurora OR. Member

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    Have your CPA do the talking, turn the air conditioning down to 55 and offer them an uncomfortable chair in a dark room. Good Luck Kenoc
  4. NWPilgrim

    NWPilgrim Portland area Member

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    Get your CPA and/or a tax attorney to represent you. Probably won't hurt to let them know if they squeeze too hard you will go bankrupt, close down and go on welfare and they won't see a penny more from you (since all side business will be cash only for the next seven years).

    It is in their interest to find a way that you can stay in business and make token payments and from now on you will keep perfect paper records.

    +1 on payroll taxes. I had a friend in roofing that got behind on payroll taxes. He was able to settle everything else but $75K in payroll taxes. He went underground for seven years and even at that they managed to recover about $20K from him (nice guy but horrible at managing a business and money).
  5. Starship

    Starship NE Portland Active Member

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    if you have a CPA you can request that the audit take place in his/her office.
    They ask for paperwork and you will bring it to them but the audit stays in the CPA office.
    There is nothing wrong with this and it is often done. Will limit what they ask for as if it isn't a big deal they may let it go due to the hassel of asking and waiting for everything.
    Also it keeps you out of the loop of talking (chatting) with them and saying soemthing you didn't mean to.

    Good Luck