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Hello everyone.....well, I got the notice that we are being audited, and I am freaking out. I don't have receipts for much because I use my debit card for everything! They are auditing us for 2012 and 2013. My accountant likes to "up" all my expenses and apparently "charitable contributions." I feel sick. We are gathering all we can find, and I have an appointment with my accountant for Saturday morning to go over what we found.
My question is: Has anyone ever been audited? Is it bad? The IRS agent called me yesterday to set up the appointment, and I made him laugh, so I'm hoping he has a good sense of humor! I asked if my husband has to be there "because as you will see, he makes more money than me, so I'll take off that day." I wanted to ask, "Instead of candy, do you guys put out Xanax?" But I will wait until I get there to feel him out. I told my accountant that Orange is NOT the New Black for me!!
Any advice? Did you have to pay huge amounts? I didn't make a ton, I guess thankfully, haha.
Take this as a good lifelong lesson and hope it doesn't cost you too much. Credit cards and checks are the only way to go for most things, particularly charitable contributions. I don't even print the receipts anymore. Now I save them as PDFs and will print them if I get audited. (of course backed up to 3 external hard drives + Carbonite) All items are noted in my "taxes 2014" doc under whichever category. Only items with a receipt get counted in for the total of any category. If you don't have receipts, you're kinda scewed, whether the final numbers were upped or not. Your accountant needs to be fired. GOOD LUCK. And remember, if you're going to have to throw money down the toilet on whatever this ends up costing you, it's better than on a doctor. Be grateful for good health and learn a good lesson here.
The most that will happen is they will re-do your taxes. It will cost you some money in taxes. However, when you meet with him, make his job as easy as you can with your organization. Stay serious.
Thanks, ladies. I have highlighted all my bank statements and I have as many receipts as I could find. If you go to Best Buy and have a rewards card, they will print out all receipts. Also if you give them your debit card and credit card, they will print out receipts for you if you used them. Office Max doesn't have that capability.....yet. I told them they should since a lot of businesses use them.
Thanks, I'll go in and take my penalty, etc.
Do not show up with a shoebox full of receipts. Total up your receipts to get as close to the numbers on your tax return as possible.
Is your tax person going in with you? Sometimes they will take care of it for you.
What I do every tax year, I organize my receipts, either by date or by item (mail receipts go on one piece of copy paper, dated order; ink goes on another; dated order, equipment on another, by most expensive) etc.
Thanks, again. Yes, my accountant is coming with me. I do have receipts, etc., all in labeled folders, and I highlighted my bank statements with different colored highlighters, with a legend, and a total of everything. We are meeting with our accountant tomorrow morning to go over everything. I know I'll have to pay, I just hope it's not a lot. We shall see! I did learn a lesson to keep receipts for everything. If I go to Target and buy something business related, plus toilet paper, etc., I will now save that receipt.
Wonder why I've never been audited (knock on wood). Kelli, how did they ding you for more money? Did they disallow some deductions?
The home office expense is a huge red flag. They've never gotten more than an additonal 5,000 out of me. To some people that's a lot but I'm glad that's all they've gotten. Whatever. If they want to spend tons of hours going through all my receipts - not in order in any way, shape or form - then they can have at it.
no, sorry.. but id be terrifed (using fake name here) lol..
how did it go?
not too painful i hope
It didn't happen yet. My accountant is going for me and it's scheduled so far for Oct. 14th. I still have to give him my "mileage log." I was arguing with him about whether we can count the mileage from our driveway. He insisted I had to go to an office first. Well, I gave him the publication I saw it in, and he just left me a message that I was right. I think he was thinking we are like reporters, like news reporters! He also checked with IRS and I was right. I don't think he realizes that we are a home office.
I feel sick over this. We are being audited for '12 and '13. He said this year the IRS picked court reporters and real estate agents. He said they are ruthless! He has a bunch of reporters and real estate agents being audited. My friend who is a court reporter is being audited, too. He said I could be hit for $5,000 a year which makes me sick because I didn't make a lot in '12. I made more in '13. My daughter had an accident towards the end of '12 and also Hurricane Sandy hit, so not much work.
I just can't wait for this to be over!!!!!