Plentybooks | IRS Tax Audits
Business Education Personal / Individual
Unreported income. There is a relatively high potential for unreported income from cash transactions with sole The IRS will examine your bank records to detect deposits that are unaccounted for, compare revenue and expenses of similar businesses, and in some cases will perform a “lifestyle” audit to reconstruct income based on changes in the sole proprietor’s net worth.
Significant losses reported on Schedule C, or losses continuing over two or more years, may increase the chance of audit. If the IRS is successful in reclassifying an activity as a hobby instead of a for-profit business, losses will be disallowed.
The fair market value of products and services received through bartering can be considered business income if the products or services rendered are associated with the sole proprietorship. If the sole proprietor trades through a barter exchange program, the program will issue Form 1099-B, Proceeds from Broker and Barter Exchange Transactions.
To agree with all the proposals.
To partially agree with the changes.
To dispute all the changes proposed by the IRS.
You are allowed to sign an authorization that enables another party to represent you in connection with the Notice CP 2000. The authorization is part of Notice CP 2000, and a separate power of attorney is not required. If you are needing assistance with this notice, please contact us!
The best way to prepare for an audit is to put oneself into the auditor’s shoes. Take the perspective that you are looking for anything possible to increase the tax liability on the return. This is an area where a qualified tax preparer can be invaluable.
Ask yourself tough questions and be prepared to support any questionable deductions. Make sure any issue raised during an audit is something that has already been considered. If the preaudit function is performed properly, the actual audit will be more comfortable, and you will be prepared for any negative adjustments.
Audit Video.
For examinations taking place in an IRS office, you can request an immediate meeting with the examiner’s
Appeal to the local IRS Appeals
AuditsIRS AuditIRS Tax AuditTax Resolution