Well, Irvin I actually have a bit of good tax news for you today.The number of Correspondence Audits conducted by the IRS will dropby some 10-15% this year due to smaller budgets.
WHAT ARE CORRESPONDENCE AUDITS?
“Correspondence audits” are conducted by mail, rather than in person.
Typically, they’re also “limited scope” audits, which means rather than
looking into your fulltax return, a correspondence audit letter will request
answers to specific questions about just 1 to 3 tax deduction categories.
HOPE YOU KEPT GOOD RECORDS
Typically, they’re also “limited scope” audits, which means rather than
looking into your fulltax return, a correspondence audit letter will request
answers to specific questions about just 1 to 3 tax deduction categories.
HOPE YOU KEPT GOOD RECORDS
These letters also require you to mail-in copies of records that prove you
qualified for each of the named categories. (This is why I keep harping on
the importance of keeping adequate records.)
qualified for each of the named categories. (This is why I keep harping on
the importance of keeping adequate records.)
The #1 category questioned is the Earned Income Tax Credit, because
a large number of taxpayers who claimed this tax credit, didn’t qualify.
a large number of taxpayers who claimed this tax credit, didn’t qualify.
AND IT’S TAKING THEM LONGER
The IRS is not only cutting back on the number of correspondence
audits, but they are also taking far longer to process them. They used
to promise to close your case within 30-45 days of receiving your reply,
but they have now stopped making that claim. It is now common to wait
for months for a reply from the IRS. < /p> HERE’S WHY THAT’S NOT GOOD NEWS FOR YOU
If the audit results in losing some of your deductions, you will owe money
for the amount disallowed PLUS the interest on that money for the period
beginning on the date you originally filed the tax return, and ending on
the date you pay your audit bill.
So if it takes the IRS three months to conclude you owe them money,
that’s three more months of interest you will be paying.
Fyi, about 75% of all audits are conducted by correspondence,
and the remaining 25% in-person.
Creating Tax-Smart Home-Business Owners,
Ron
Ronald R. Mueller, MBA, Ph.D. – author of
“Home Business Tax Savings, Made Easy!”
P.S.Here are the two BEST tax deduction recordkeeping systems I have found --
SMARTPHONE App:http://homebusinesstaxsavings.com/TAXBOT.htmlPENCIL and PAPER system:http://homebusinesstaxsavings.com/Envelopes.htmlDon't wait until you get a corresondence audit to begin keeping good records.
Home Business Tax Savings Inc.
2907 Shelter Island Drive
Suite 105
San Diego, CA
92106
US
orders@homebusinesstaxsavings.com
888-411-7855
audits, but they are also taking far longer to process them. They used
to promise to close your case within 30-45 days of receiving your reply,
but they have now stopped making that claim. It is now common to wait
for months for a reply from the IRS. < /p> HERE’S WHY THAT’S NOT GOOD NEWS FOR YOU
If the audit results in losing some of your deductions, you will owe money
for the amount disallowed PLUS the interest on that money for the period
beginning on the date you originally filed the tax return, and ending on
the date you pay your audit bill.
So if it takes the IRS three months to conclude you owe them money,
that’s three more months of interest you will be paying.
Fyi, about 75% of all audits are conducted by correspondence,
and the remaining 25% in-person.
Creating Tax-Smart Home-Business Owners,
Ron
Ronald R. Mueller, MBA, Ph.D. – author of
“Home Business Tax Savings, Made Easy!”
P.S.Here are the two BEST tax deduction recordkeeping systems I have found --
SMARTPHONE App:http://homebusinesstaxsavings.com/TAXBOT.htmlPENCIL and PAPER system:http://homebusinesstaxsavings.com/Envelopes.htmlDon't wait until you get a corresondence audit to begin keeping good records.
Home Business Tax Savings Inc.
2907 Shelter Island Drive
Suite 105
San Diego, CA
92106
US
orders@homebusinesstaxsavings.com
888-411-7855
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