Category Archives: Dealing With The IRS

What to do if you get a Business IRS Audit Notice – Paul Gaulkin CPA

sign saying internal revenue service

If you ever receive an IRS audit notice in the mail, it is important to understand what the next steps are in the process of solving your tax problem. Here is a list of steps that you should take once the notice arrives: 1. Review the Information Document Request (IDR) provided by the IRS. The IDR is a roadmap that explains the issues that the IRS agent would like to discuss with you. It is a common occurrence for the … Read more

Being a Consultant can get you Audited – Paul Gaulkin CPA

Balancing the Accounts

Sole proprietors that choose to be consultants have to face the fact that their industry is subject to a high probability of being audited by the IRS. This is due to the fact of the mixed personal versus business nature of many expenses of both the consultant and family members. Employee or Independent Contractor One of the main reasons the IRS audits a high percentage of sole proprietors who are consultants have to do with whether they are an employee … Read more

IRS Office of Professional Responsibility Referral – Paul Gaulkin CPA

Lawyers desk

The IRS has an initiative to enforce ethical standards for attorneys, CPAs, enrolled agents, and enrolled actuaries that are practicing before the IRS. The Internal Revenue Manual provides guidance to taxpayers and IRS employees in regard to situations that should be referred to the Office of Professional Responsibility. Office of Professional Responsibility Referral Generally, a referral to the OPR is not warranted if it was a simple mistake and not willful but may be referred if the practitioner has a … Read more

IRS Audit Credible Evidence Requirement – Paul Gaulkin CPA

cubes saying truth

If a taxpayer first introduces credible evidence into an audit with the IRS, the burden of proof will shift away from them and onto the IRS. This credible evidence must be in respect to factual issues relevant to ascertaining the taxpayer’s tax liability. Audit Credible Evidence Requirement Credible evidence is the quality of evidence which, after critical analysis, the court would find sufficient upon which the base a decision on the issue if no contrary evidence were submitted. This means … Read more

Tax Return Audit Required Filing Checks – Paul Gaulkin CPA

Audit checklist

Required filing checks is a procedure undertaking by the IRS during an audit to give consideration to whether all tax aspects involving the taxpayer’s sphere of influence and responsibility. This includes the inspection of prior year & subsequent tax returns, information returns, and the determination as to whether the taxpayer maintained adequate records. Tax Return Audit Required Filing Checks The following are generally what the IRS will wish to inspect: 1. Prior and subsequent tax returns are inspected for audit … Read more

Failure to File Information Return Form W-2 & 1099 – Paul Gaulkin CPA


If you are a business owner and you do not timely file an information return with the IRS for W-2 or 1099 income, they can assess you a failure to file penalty. They can also asses a business owner a separate penalty for failure to furnish a copy of the information return to the payee. Failure to File Information Return Unless due to reasonable cause and not willful neglect, the following will result in a penalty: 1. The failure to … Read more

Settling Business Audit Issues with Revenue Agent – Paul Gaulkin CPA

People with phone and paper

In most cases, it is best to settle any audit issues at the lowest level of the IRS. In the case of a business audit, settling issues with a Revenue Agent is the best way to attain a favorable settlement. Once an agent takes a position in a case, it becomes increasingly harder to overturn the agent’s decision the higher the case moves within the IRS. Review & Appeal During the review of the case file by the Group Manager … Read more

Overpayment of Tax by a Fiduciary – Paul Gaulkin CPA


In the event a fiduciary (a trustee, executor, administrator, guardian, and receiver) makes an overpayment of tax to the IRS, the refund is recoverable by the fiduciary or a successor. Claim for Refund A claim for refund from the IRS by the fiduciary should include a statement that shows proof that the fiduciary filed the tax return to which the overpayment applies and that the fiduciary is still acting in that capacity of the estate. The claim for refund is … Read more

When IRS Power of Attorney is Required – Paul Gaulkin CPA

IRS power of attorney

When taxpayer wants an Enrolled Agent, CPA or tax attorney to take action on their behalf with the IRS, a power of attorney is required to be filed. This power of attorney allows the representative to take the best course of action when dealing with the IRS on the behalf of the taxpayer. Required Power of Attorney Power of attorney is required when a taxpayer wants a recognized representative to: 1. Act as an advocate or perform various acts on … Read more

Collection after Offer in Compromise Submission – Paul Gaulkin CPA


Once an Offer in Compromise application has been submitted to the IRS, all collection actions against a taxpayer must stop. This matter generally has to be negotiated with the Revenue Officer; however, the only stated grounds for continuing collection are made for delays and under conditions of jeopardy of the liability. Collection after Offer in Compromise Submission The IRS is also prohibited from levying a taxpayer’s property or rights to property while an Offer in Compromise is pending, for 30 … Read more