IRS field visit, not part of the paperwork audit

[Soterik]

Note that we owe no back taxes, never have, and always file on time.

E

[masraum]

Very weird. It's like they REALLY want YOU.

Assuming that everything is as above board as you say, and you can find no reason to legally put them off or require them to get a "warrant" or whatever the IRS equivalent would be, I say let em come. If you push back, that may make them want you more and push harder which ultimately, is more of a pain in your backside than theirs. If you cooperate, and they find nothing, then maybe they'll leave you alone for a while.

[mistertate]

You don't mess with 1990C4S

[Por_sha911]

A friend of mine had a BIL who was an IRS agent. After my buddy got divorced, he was audited for every year for 3 years and was found to be 100% each time. The fourth time he called a supervisor and said to either back off or I will get a lawyer and go to the media. They backed off and he hasn't heard from them again.

In light of that, are you a conservative, Tea Party supporter, or strong Christian?

[rwest]

Have you verified it is actually the IRS and not some scam?

[rcecale]

Wouldn't hurt to consult with a tax attorney...

Randy

[dafischer]

Have you consulted your tax accountant yet? He or she may want to be present, and it may behoove you to have them there.

[Porsche-O-Phile]

You'd be nuts to let an IRS auditor anywhere near your home or business without a lawyer present. There's that whole thing about unreasonable searches and seizures that they're trained to know the nuances of...

[motion]

I personally feel that involving an attorney for something as benign as this would possibly put the OP on the 'hit list' for further harassment. I would just cooperate nicely and feel confident that the audit would go away quietly.

I was audited a couple years ago. Thought about hiring an attorney to represent me for the interview but thought better about it in the end. I'm glad I didn't. My auditor was highly aggressive and combative in my interview, but I was able to escape relatively unscathed after the audit (a few thousand dollars for stuff I was too lazy to document). I believe that if I would have had an attorney present, things would not have gone as smoothly and affordably.

[pwd72s]

Originally Posted by rcecale

wouldn't hurt to consult with a tax attorney...

Randy

bingo! More people have gotten in deep doo-doo by thinking they didn't need a lawyer present than the other way around.

[Porsche-O-Phile]

It seems like he's already being harassed. Having counsel present is a right. He absolutely should not be penalized for it. It needn't become hostile, but he should act to preserve his rights. I would NEVER trust the IRS to do the right thing. They're not your friends and they are most definitely not there to help you or give you an easy time.

[dentist90]

I've been told that for early interviews not to worry about having your accountant present, but be careful about what questions you answer. They have your reporting info already, so if they ask you a question about how or why you do something a certain way just say 'not sure, I'll have to ask my accountant about that'. If they just want to verify that you are actually using a home office or your storage deduction is actually being used for business you may not have to say a word (hopefully).

[legion]

It seems very unusual to me that the IRS, which has had its budget cut after harassing conservative taxpayers, would spend the time to verify that a home office is a home office.

[dafischer]

Fishing expedition.

[Rick Lee]

I started a thread on this a few years ago, asking what happens if you just blow them off or what rights you have during an audit. Seems to me, the worst they can do, absent your cooperation, is decide to redo your taxes for the year(s) in question for you, and then it'd be on you to dispute them. But why would you ever help them when they're trying to build a case against you? I'm not aware of any special powers they have when it comes to search and seizure. They can ask for consent, just like your local cops or even nextdoor neighbor can. You don't have to give it and they'd need more than your refusal to constitute PC for a warrant. Or is there a current audit going on and this "visit" is a part of that?

[mikehinton]

I'm a CPA in private practice, and have been involved in dozens of IRS audits over the years. The request by an agent to inspect business premises is quite common. My advice would be to have your representative present at that meeting, and have him or her answer all of the questions posed by the IRS agent. If you do need to answer any questions, you should treat the situation the same as a deposition. Namely, just answer the question asked, and provide no additional background information.

[jwasbury]

I was going to ask if you're reporting any of these businesses on Schedule C, but I see you mention multiple LLCs, so unless these are single member LLCs you likely file 1065s and then K-1s flow to your 1040.

It does seem strange that they are coming around to you again for an audit of relatively small businesses.

I'm CFO of a multinational financial services organization of roughly 700 employees. Every single year of my companies existence in its present tax incarnation (the result of a merger/acquisition transaction in 2005) has been audited. Some of the constant IRS presence has been partially self inflicted...where we filed an amended return covering a couple years (almost instant audit on those for a company our size). The most recent examiner started asking questions about an issue that was raised a few years ago that we had to go to Appeals level to resolve. When he started poking around there, I had my tax director call a meeting with me and the IRS examiners boss. I gave them the riot act...the issue had been adjudicated previously and I wasn't going to take our time (or hire attorneys and outside tax advisors) to litigate it again. He understood and shortened the leash on his youthfully exuberant examiner.

Probably worth it for you to politely say "WTF" to this examiner when he shows up for the field visit.

[berettafan]

did you take that damn stupid home office deduction?

are the offices for the businesses in your home?

they are looking for personal expenses masquerading as business expenses.

[Brando]

I agree with dafischer. Sounds like a fishing expedition. Keep your tax lawyer/CPA close on this one.

[Rick Lee]

Originally Posted by berettafan

did you take that damn stupid home office deduction?

You know I take that one. I have desks and shelves built into two walls in my home office and I visit my company's HQ in FL twice a year, while attending trade shows every month or two in between. My home office is a legit as it gets. What's the problem with taking that deduction if you can back it up?