The Schedule C IRS Tax Audit, we can take the pain out of this IRS tax audit.
On staff are former IRS agents, CPAs and tax attorneys. We have handled thousands of cases. If you have any questions we are happy to answer about any tax audit you are going through.
Schedule C audits can be easy or very painful and believe it or not at all depends on the agent who works the case and how picky, sticky or how much they want to delve into the case.
Some IRS audit agents want every last piece of documentation and others are much more relaxed & understanding about the situation and may just want averages.
The agent you have is in a control of the case and the volume of information that they want.
Also, keep in mind the auditor can go back three years if they choose and ask for the current year to be filed to review that as well.
WHAT IS IRS ASKING FOR?
If your notice lists Schedule C (Form 1040 or 1040-SR) (PDF) income, look at Form 11652, Questionnaire and Supporting Documentation, Form 1040 or 1040-SR Schedule C (Profit or Loss from Business).
It lists the documents you must send that support the income and expenses claimed on your Schedule C. Documentation is king.
You should eview each line of this form and make sure you correctly answer every question.
Return the Form 11652 with the requested supporting documents, such as copies of your business records, Form 1099-MISC and your business license.
It is important to keep all documents used to complete your tax return.
The documents kept should include:
1.records supporting the income,
2.expenses, deductions or credits you claimed, such as invoices, receipts, mileage logs, and,
3.checking account statements showing amounts paid, and any other proofs of payment.
Make sure your records should be well-organized to answer any questions when your return is selected for audit.
The records supporting items on your tax returns should be kept for at least three years after filing your return. IRS can go back 3 years if they chose.
You must send copies of your records that show the gross receipts and business expenses claimed on your Schedule C.
What are Gross receipts? They are the total income from your business.
Proof of your gross receipts includes cash register tapes, bank statements, bank deposit slips, receipt books, sales invoices, credit card charge slips, and Forms 1099-MISC.
IRS will want all Business expenses. Business expenses are the costs paid to carry on your business and proof of your expenses includes canceled checks or checking account statements which clearly show the expenses paid, cash register tapes, account statements, credit card sales slips, and invoices.
After you complete your response, look at the Form 11652 to make sure you included all the necessary information.
Need help, call us today.
