So......just how bad are Audits?
 

I've never had one? Does the IRS take everything?

IRS audits aren't that bad; I had one a few years ago. I owed .85 (eighty-five cents) and they let it slide.

Scientology audits are a different story; fail one of those and you end up dead.

I was audited while a student in college. That year I made around $5000. I had to go sit in front of two auditors at the federal building in Seattle. They found I had transposed a number and ended up owing $125. What a waste, it probably cost them a couple thousand dollars as they clearly put in some time into gathering my info.

Sometimes you simply have to mail in supporting documents. If you can make a convincing argument with the supporting documentation, cased closed. I never had to make a personal appearance.

I've only had one, and it wasn't bad. I had failed to report the sale of some stock, so they assumed that I had merely been given the stuff and charged me the full taxes (as opposed to just taxing the gains) when I sold it. I showed paperwork documenting my purchase of the stock in question and only had to pay some admin fees.

Scary, but, in my case, not overwhelmingly bad.

Dan

+1
Happened to me twice.
Post office audits are a different story. Holy Schnikeys do they put it to you.

Far worse than Audis I hear.......

Good one!!!
:D

Ex g/f, who was self-employed, got called in.
An unmarked building, unmarked entrance, unmarked rooms.
She came out clean.

Rev. agency I believe is looking for obvious discrepancies. As long as you have proof that you have done nothing wrong then there is nothing to fear. For many years in the UK my mother had her rental house rented out and the rent was declared for income tax purposes.

The audit came about because a new tenant paid the first months rent and damage deposit and for the rest of the year paid no rent. He was a drug addict. Uk tax dept. jumped on her and asked where was the rent. My mother explained the situation with the tenant and the Govt. auditor said no problem. As long as there is proof of no wrongdoing on your part then there is no problem.

Cheers, Guy.

Older brother (self-employed photographer) was called in for an audit. Ended up that the Feds owed Him $850. He made money on the deal.

Audited once. A real hassle, but they paid me $2,200 for my time.

Every year since I donated money to the Republican Party about 6 years ago. Always triggered by a mistake on their part. Cost me nothing but a hassle so far.

The key to remember is a lack of records is a BAD thing.