Hire Former IRS Agents who worked out of the local South Florida IRS offices. We have over 60 years of direct work experience right here in the local IRS offices.
Stop your worry today. 954-492-0088.
After years of working at the IRS, Fresh Start Tax is one of the finest firms for tax representation anywhere. We are comprised of former IRS Agents, Managers, and Instructors. Call us today so you never have to speak to IRS.
IRS has put out a list of the most frequently asked questions about tax audits.
Audit Facts:
IRS Audits 1% of all tax returns under $200K
IRS Audits 2% of returns upward to $10 million
IRS Audits 6% of returns from $10 million and up.
IRS Audit FAQs
Does the IRS ever contact a taxpayer or the tax preparer via e-mail to initiate an audit?
Does filing an amended return affect the return selection process?
Why was my return selected for audit?
Where will the audit be held
Can you request the audit be conducted at the IRS office instead of at your place of business?
Can the audit be transferred to another IRS office?
How long should the records related to a business or other long-term asset be kept
How long should payroll records be kept?
After an auditor completes the audit, will the case be reviewed to ensure the audit results are correct?
It’s time for my appointment and I’m not ready. What do I do?
How far back can the IRS go to audit my return?
Answers to the FAQ’s
Does the IRS ever contact a taxpayer or the tax preparer via e-mail to initiate an audit?
The IRS does not contact an individual via e-mail for an initial appointment. Contact related to being selected for an audit will be made via telephone or mail only, due to disclosure requirements.
Does filing an amended return affect the return selection process?
Filing an amended return does not affect the selection process of the original return. However, amended returns also go through a screening process and the amended return may be selected for audit.
Why was my return selected for audit?
When returns are filed, they are compared against “norms” for similar returns. The “norms” are developed from audits of a statistically valid random sample of returns. These returns are selected as part of the National Research Program which the IRS conducts to update return selection information.
The return is next reviewed by an experienced auditor. At this point, the return may be accepted as filed, or if based on the auditor’s experience questionable items are noted, the agent will identify the items noted and the return is forwarded for assignment to an examining group.
Upon assignment to a group, the return is reviewed by the manager. Items considered in assigning a case are: factors particular to the area such as issues pertaining to construction, farming, timber industry, etc. that have specific factors and rules that apply. Based on the review, the manager can accept the return or assign the return to an auditor. The assigned auditor again reviews the return for questionable items and either accepts it as filed or contacts the taxpayer to schedule an appointment.
Where will the audit be held?
It depends on the type of audit being conducted.
Audits by Mail/Correspondence Audit: Some audits are conducted entirely by mail. If the audit is conducted by mail, you will receive a letter from the IRS asking for additional information about certain items shown on the tax return such as income, expenses, and itemized deductions.
In-Person Audits are audits conducted either at a local IRS office or at your business location.
Can you request the audit be conducted at the IRS office instead of at your place of business?
If the audit has been scheduled to be conducted at your location, it will generally be conducted where the books and records are located. Requests to transfer the audit to another location, including an IRS office, will be considered but may not be granted. Treasury Regulation 301.7605-1(e), Time and place of audit, discusses the items considered when a request for a change in location is made.
Can the audit be transferred to another IRS office?
You can request a transfer of an audit if you have moved. Several factors will be considered such as your current location, the location of the business and where the books and records are maintained.
If the audit is by correspondence, you can request a face-to-face audit because the books and records may be too voluminous to mail.
How long should the records related to a business or other long-term asset be kept?
In the case of an asset, records related to the asset should generally be kept for as long as you have the asset plus three years. If the asset was exchanged, the basis for the new asset may include the exchanged asset so the records for both assets will need to be retained until the new asset is disposed plus three years from the file date of the tax return for the year of disposition.
How long should payroll records be kept?
In general, payroll records should be kept for six years with a review of the file to see if any items relating to current employees should be retained with current records.
After an auditor completes the audit, will the case be reviewed to ensure the audit results are correct?
All cases may be reviewed by the auditor’s manager either during the audit or upon completion. If errors are noted by the manager, the auditor will contact you to advise you about the proposed correction and what impact this may have on the amount of tax due.
It’s time for my appointment and I’m not ready. What do I do?
If you do not have all the information requested, contact your auditor at the number reflected in the notification letter to discuss what information is currently available. It may be possible to begin the audit with the information available rather than postpone the appointment. The quicker the audit begins, the quicker it can be resolved. In addition, if the initial appointment is scheduled beyond 45 days from the initial action, managerial approval is required.
How far back can the IRS go to audit my return?
Generally, the IRS can include returns filed within the last three years in an audit. Additional years can be added if a substantial error is identified. Generally, if a substantial error is identified, the IRS will not go back more than the last six years.
The IRS tries to audit tax returns as soon as possible after they are filed. Accordingly most audits will be of returns filed within the last two years.
If an audit is for an older year, you may be requested to extend the statute of limitations for assessment of your tax return. The statute of limitations limits the time allowed to assess additional tax. The statute of limitations is generally three years after a return is due or was filed, whichever is later. There is also a statute of limitations for making refunds.
If the audit is not resolved and the statute of limitations date is nearing, you may be asked to extend the statute of limitations date. This will allow you additional time to provide further documentation to support your position, request an appeal if you do not agree with the audit results, or to claim a tax refund or credit. It also allows the IRS time to complete the audit and provides time to process the audit results.
You do not have to agree to extend the statute of limitations date. However, if you do not agree, the examiner will be forced to make a determination based upon the information they currently have. Therefore, the examiner may not be able to consider additional adjustments, such as expenses, that could lower the amount of tax due.
The information is taken and extracted form the irs.gov site.
Hire Former IRS Agents who worked out of the local South Florida IRS offices. We have over 60 years of direct work experience right here in the local IRS offices.
Stop your worry today. 954-492-0088.
After years of working at the IRS, Fresh Start Tax is one of the finest firms for tax representation anywhere. We are comprised of former IRS Agents, Managers, and Instructors. Call us today so you never have to speak to IRS. IRS has put out a list of the most frequently asked questions about tax audits.
Audit Facts:
IRS Audits 1% of all tax returns under $200K
IRS Audits 2% of returns upward to $10 million
IRS Audits 6% of returns from $10 million and up.
IRS Audit FAQs
Does the IRS ever contact a taxpayer or the tax preparer via e-mail to initiate an audit?
Does filing an amended return affect the return selection process?
Why was my return selected for audit?
Where will the audit be held
Can you request the audit be conducted at the IRS office instead of at your place of business?
Can the audit be transferred to another IRS office?
How long should the records related to a business or other long-term asset be kept
How long should payroll records be kept?
After an auditor completes the audit, will the case be reviewed to ensure the audit results are correct?
It’s time for my appointment and I’m not ready. What do I do?
How far back can the IRS go to audit my return?
Answers to the FAQ’s
Does the IRS ever contact a taxpayer or the tax preparer via e-mail to initiate an audit?
The IRS does not contact an individual via e-mail for an initial appointment. Contact related to being selected for an audit will be made via telephone or mail only, due to disclosure requirements.
Does filing an amended return affect the return selection process?
Filing an amended return does not affect the selection process of the original return. However, amended returns also go through a screening process and the amended return may be selected for audit.
Why was my return selected for audit? When returns are filed, they are compared against “norms” for similar returns. The “norms” are developed from audits of a statistically valid random sample of returns. These returns are selected as part of the National Research Program which the IRS conducts to update return selection information.
The return is next reviewed by an experienced auditor. At this point, the return may be accepted as filed, or if based on the auditor’s experience questionable items are noted, the agent will identify the items noted and the return is forwarded for assignment to an examining group. Upon assignment to a group, the return is reviewed by the manager. Items considered in assigning a case are: factors particular to the area such as issues pertaining to construction, farming, timber industry, etc. that have specific factors and rules that apply. Based on the review, the manager can accept the return or assign the return to an auditor. The assigned auditor again reviews the return for questionable items and either accepts it as filed or contacts the taxpayer to schedule an appointment.
Where will the audit be held?
It depends on the type of audit being conducted.
Audits by Mail/Correspondence Audit: Some audits are conducted entirely by mail. If the audit is conducted by mail, you will receive a letter from the IRS asking for additional information about certain items shown on the tax return such as income, expenses, and itemized deductions.
In-Person Audits are audits conducted either at a local IRS office or at your business location.
Can you request the audit be conducted at the IRS office instead of at your place of business?
If the audit has been scheduled to be conducted at your location, it will generally be conducted where the books and records are located. Requests to transfer the audit to another location, including an IRS office, will be considered but may not be granted. Treasury Regulation 301.7605-1(e), Time and place of audit, discusses the items considered when a request for a change in location is made.
Can the audit be transferred to another IRS office?
You can request a transfer of an audit if you have moved. Several factors will be considered such as your current location, the location of the business and where the books and records are maintained.
If the audit is by correspondence, you can request a face-to-face audit because the books and records may be too voluminous to mail.
How long should the records related to a business or other long-term asset be kept?
In the case of an asset, records related to the asset should generally be kept for as long as you have the asset plus three years. If the asset was exchanged, the basis for the new asset may include the exchanged asset so the records for both assets will need to be retained until the new asset is disposed plus three years from the file date of the tax return for the year of disposition.
How long should payroll records be kept?
In general, payroll records should be kept for six years with a review of the file to see if any items relating to current employees should be retained with current records.
After an auditor completes the audit, will the case be reviewed to ensure the audit results are correct?
All cases may be reviewed by the auditor’s manager either during the audit or upon completion. If errors are noted by the manager, the auditor will contact you to advise you about the proposed correction and what impact this may have on the amount of tax due.
It’s time for my appointment and I’m not ready. What do I do?
If you do not have all the information requested, contact your auditor at the number reflected in the notification letter to discuss what information is currently available. It may be possible to begin the audit with the information available rather than postpone the appointment. The quicker the audit begins, the quicker it can be resolved. In addition, if the initial appointment is scheduled beyond 45 days from the initial action, managerial approval is required.
How far back can the IRS go to audit my return?
Generally, the IRS can include returns filed within the last three years in an audit. Additional years can be added if a substantial error is identified. Generally, if a substantial error is identified, the IRS will not go back more than the last six years.
The IRS tries to audit tax returns as soon as possible after they are filed. Accordingly most audits will be of returns filed within the last two years.
If an audit is for an older year, you may be requested to extend the statute of limitations for assessment of your tax return. The statute of limitations limits the time allowed to assess additional tax. The statute of limitations is generally three years after a return is due or was filed, whichever is later. There is also a statute of limitations for making refunds.
If the audit is not resolved and the statute of limitations date is nearing, you may be asked to extend the statute of limitations date. This will allow you additional time to provide further documentation to support your position, request an appeal if you do not agree with the audit results, or to claim a tax refund or credit. It also allows the IRS time to complete the audit and provides time to process the audit results.
You do not have to agree to extend the statute of limitations date. However, if you do not agree, the examiner will be forced to make a determination based upon the information they currently have. Therefore, the examiner may not be able to consider additional adjustments, such as expenses, that could lower the amount of tax due.
The information is taken and extracted form the irs.gov site.
Topic 431 – Canceled Debt – Is it Taxable or Not?
In general, if a debt for which you are personally liable is canceled or forgiven, other than as a gift or bequest, you may have to include the canceled amount in gross income. Depending on the circumstances by which your debt was canceled and the nature of any property associated with the debt, the canceled debt may qualify for an exception to inclusion in gross income, or the canceled debt may result in gross income but the income may be excluded.
A debt includes any indebtedness for which you are liable or which attaches to property you hold. If property is associated with a debt, a cancellation of all or part of the debt may occur as a result of foreclosure proceedings on the property, repossession of the property, your return of the property to the lender, your abandonment of the property, or a principal residence loan modification. Regardless of the factors relating to the cancellation, you must report any taxable amount as ordinary income from the cancellation of debt on Form 1040 or Form 1040NR and associated sub-schedules as advised in IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonment’s.
If a federal government agency or an applicable financial entity cancels or forgives a debt you owe of $600 or more, you should receive a Form 1099-C (PDF), Cancellation of Debt, showing amounts and other information relating to the cancellation. The amount of canceled debt is shown in Box 2 of the form.
Canceled Debts that meet the requirements for any of the following exceptions or exclusions will not be taxable.
Canceled Debt that Qualifies for Exception to Inclusion in Gross Income:
1. Amounts specifically excluded from income by law such as gifts or bequests
2. Cancellation of certain qualified student loans
3. Canceled debt that if paid by a cash basis taxpayer is otherwise deductible
4. A qualified purchase price reduction given by a seller
Canceled Debt that Qualifies for Exclusion from Gross Income:
1. Cancellation of qualified principal residence indebtedness
2. Debt canceled in a Title 11 bankruptcy case
3. Debt canceled due to insolvency
4. Cancellation of qualified farm indebtedness
5. Cancellation of qualified real property business indebtedness
The exclusion for “qualified principal residence indebtedness,” enacted by the 2007 Mortgage Relief Act, now provides additional canceled debt tax relief for many American home owners involved in the mortgage foreclosure crisis currently affecting much of the country. The Act allows taxpayers to exclude up to $2,000,000 of “qualified principal residence indebtedness.”
Generally, if you exclude canceled debt from income under one of the exclusions listed above, you must also reduce your tax attributes (certain credits, losses, and basis of assets) by the amount excluded. You must file Form 982 (PDF), Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), to report the exclusion and the corresponding reduction of certain tax attributes.
Refer to Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonment’s, for more detailed information regarding; taxability of canceled debt, how to report it, and related exceptions and exclusions. Additional information can also be found in Publication 525, Taxable and Nontaxable Income.
Caution: If you have property that is security for a debt and that property is taken by the lender in full or partial satisfaction of your debt, you will be treated as having sold that property and may have gain or loss as a result. The gain or loss on such a deemed sale of your property is a separate issue from whether any canceled debt also associated with that same property can be included in gross income. See IRS Publication 544, Sales and Other Dispositions of Assets, for detailed information on reporting gain or loss from repossession, foreclosure or abandonment of property.
Received a 504 Notice from the IRS?
Have you received a Final Notice from the Internal Revenue Service and do not owe the money? Certified Mail? Make no mistake about this, the IRS will be sending out levies to your bank and to your employer within the next 6 weeks. You have several options available to you to stop this action. If you call Fresh Start Tax, we can stop the IRS today! Our guarantee to you, immediate results.
Just so you know, the IRS must first issue a formal Notice of Intent to Levy, and that is the next step after this notice. You should therefore call Fresh Start Tax immediately, or the number on the notice, to discuss this situation and your payment options.
Your case is closed as far as any determination about how much you owe, so there is nothing for you to appeal at this point. However, you do have three options to get your case re-opened so the IRS can consider whether you owe any additional amounts:
Pay the amount due in full and file a claim for refund. If the IRS disallows your claim you will have the right to appeal at that time.
Follow the instructions in Publication 3598 and request an Audit Reconsideration. Note that you must submit new information the IRS did not previously consider in order to have an audit reconsideration.
Follow the instructions in Form 656 and file an Offer in Compromise, Doubt as to liability.
Call Fresh Start Tax today at 1-866-700-1040. Let our team of tax professionals resolve and close your case. We have former IRS agents that can walk you through this process and stop the stress and worry immediately.
www.freshstarttax.com
We can get you set up on a payment plan today and close your case for good!!! Never speak to IRS
We are IRS former agents who have offices located in Ft. Lauderdale and have been resolving tax issues in South Florida for the past 28 years. We have the highest BBB rating available. www.freshstarttax 1-866-700-1040.
We can also attempt to settle your tax case or place it in hardship. If you already have an installment agreement from a previous tax debt and your financial situation has changed, we may be able to modify or restructure your installment agreement to include additional amounts owed into one agreement. Additionally, a Collection Information Statement may have to be completed to further illustrate your financial situation.
If an installment agreement is modified, reinstated or restructured, a $45 user fee may be charged.
Are looking to make a part pay agreement to IRS? Call Fresh Start Tax. There are 3 different types of installment agreement that can be made to the IRS.
Our group of tax professionals are former IRS agents who have placed thousands of people in to payment status. We can get you started today and get your case resolved right now.
“Where’s My Refund?” Common on IRS, what your problem!!!
What information is Available on Where’s My Refund?
Refund information for the most current tax year that you filed will generally be available 72 hours after we acknowledge receipt of your e-filed return, or three to four weeks after mailing a paper return.
What information is Not Available on Where’s My Refund?
* Amended Tax Return (Form 1040X) Information
Where’s My Refund? doesn’t track refunds that are claimed on amended tax returns.
Amended/corrected returns may take 8 to 12 weeks, or longer, to process.
If it’s been more than 8 weeks since you filed your amended return and you haven’t received your refund, please contact a customer service representative by calling 800-829-1040. From outside the U.S., call 215-516-2000. TTY/TDD: 800-829-4059.
* Business Tax Return Information
If you need refund information on federal tax returns other than U.S. Individual Income Tax (Forms 1040, 1040A, and 1040EZ) please call us, toll free, at 800-829-4933. From outside the U.S., call 215-516-2000. TTY/TDD: 800-829-4059.
* Prior Year Refund Information
Information on Where’s My Refund? will be for the latest tax year that we have on file for you.
Example: You filed your 2009 tax return on January 1, 2010 and then filed your 2008 tax return on February 1, 2010. The information available on Where’s My Refund will be for the 2009 tax return even though you filed your 2008 return after your 2009 return.
How Long Will My Refund Information be Available?
For U.S. Individual Income Tax Returns filed before July 1:
Your account information will remain available on Where’s My Refund? until around the second or third week in December.
If your refund check was returned to us as undeliverable by the U.S. Post Office, your refund information will remain available on Where’s My Refund? throughout the following year until you file tax return for a more current tax year.
For U.S. Individual Income Tax Returns filed on or after July 1:
Your refund information will remain available throughout the following year until you file a tax return for a more current tax year. Should you have any question call Fresh Start Tax 1-866-700-1040
Hire Former IRS Agents who worked out of the local South Florida IRS offices. We have over 60 years of direct work experience right here in the local IRS offices.