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Tax Time! - 10 Major Trends In IRS Audits
[Zero Hedge] - What feeling do you have when you hear IRS? Is there a sick feeling in the pit of your stomach or do you just roll your eyes knowing that April 15th will be here all too quickly? Throw in the word audit and emotions and blood pressure can reach levels you never dreamed of.CPA Jim Buttonow has 30 years of experience in tax technology and representing people before the IRS. He’s written this article outlining 10 major trends he sees in IRS audits. This article is spot on and worth a read, but I'll quibble with two of Buttonow's points: 4) To me, the CP200 notice is not an audit; it's a notice saying there's something wrong (missing) from your filed tax return. An audit is verification of an existing tax return. 9) The IRS do love their penalties, don't they? Some tips for y'all - if the penalties are of the late file / late pay variety, they're waivable with a single phone call. If your three previous tax returns were penalty free (or not 'significant'), you'd tell them 'I request waiver of these penalties under the First Time Abatement (FTA) Program'. You can use this one every four years, by the way. 9) (cont'd) These other penalties (accuracy-related & substantial understatement) are more tricky, as you need to demonstrate (or just make it up) 'reasonable cause', which I won't get into here due to time constraints. I could write a few chapters on it. Suffice to say, I have one pending penalty request waiver that covers the FTA penalty and the two I just mentioned, and there's a total of $3,800 for two years. It's a masterpiece - the most concise letter I've ever crafted. If I get both of these waived, I'll basically be in black-belt status for this penalty waiver stuff, which is my niche now. Oh - and get rid of the Earned Income Tax Credit, for numerous reasons. Thx, Raj! Related: Tackling Our Retirement-Savings Crisis The SECURE Act is a good step forward, but much remains to be done. (New retirement withdrawal/tax rules) Posted by: Raj 2020-01-24 |
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