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Voluntary Classification Settlement Program Form 8952 – Paul Gaulkin CPA

Workers that are on a construction site

It is a known fact that millions of workers are misclassified by employers are independent contractors when reality, they are actually employees. This problem deprives the federal government of huge sums of tax revenue because of underreporting income and related unpaid employment taxes. In order to combat this problem, the IRS has established a few ways in which to correctly classify workers. Voluntary Classification Settlement Program The voluntary classification settlement program is a program designed to provide relief to eligible … Read more

Tax Return Audit Mathematical Error Correction – Paul Gaulkin CPA

Screen showing error message

When the IRS decides to audit a return, they have the ability to correct mathematical errors inside the Service Center when they process the return. The IRS has a program called the mathematical/clerical error abatement program which is designed to assess additional tax resulting from errors on a tax return. A key point to understand is that corrections made by the Service Center for mathematical errors are not subject to Notice of Deficiency procedures. Defining a Mathematical Error Typically a … Read more

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

Appeals Officers Hazards of Litigation Standards

Decorative Scales of Justice in the Courtroom

If you ever involved in an appeal and they are considering a settlement, the Appeals Officer will use the hazards of litigation standards to try and figure out a settlement that is right for your particular case. The whole premise of the hazards of litigation standard is for the Appeals Officer to review the case with a judicial attitude toward settlement. The Appeals Officer will try and put himself in the shoes of a judge in a trial and try … Read more

Schedule K-1 Matching & Form 8082

Two pieces of fruit being weighed

In case of a red flag or audit, the IRS will match parts of the partnerships or corporation’s Schedule k-1 with the partner’s or shareholders personal tax return. This is a way the IRS can determine if someone is not telling the truth and investigate the reason for the discrepancy. It is important that both of the returns match up or there may be problems in the future. Using Form 8082 to Report Discrepancies Form 8082 is called Notice of … Read more

Deductions That Can Get You Audited

You may have wondered what the IRS looks out for when identifying a tax return that is due for an audit. There are many different areas the IRS will examine to determine if a taxpayer is telling the truth or not. Below we will list some of the less talked about issues the IRS will look out for when considering an investigation. Claiming Large Charitable Deductions The IRS has an average that it uses to compare your claimed income to … Read more

Planning & Preparation For An IRS Audit Interview

If you are ever subject to an audit, the IRS may want to interview you and ask you some questions. You are not personally required to attend an interview with the IRS unless you are issued a summons to appear. It is common practice to have your legal representative attend the interview instead. However, if you wish to attend an audit interview, we will explain some tips below. IRS Audit Interview Rights Without a summons issued to the taxpayer by … Read more

IRS Auditing Procedures for Businesses

If your business is ever subject to an audit, it is important that you know the general procedure that the IRS agent will conduct in their examination. Some of the things that an IRS agent will conduct are interviews, touring the business facilities, inspecting the businesses internal controls and many more. It is important that you understand that these procedures need to be carried out correctly by the IRS agent or the audit could be subject to objections in court. … Read more

Business Audit Preparation Tips & Tricks

In the event the IRS wants to conduct an audit at your place of business it is very important that you know all the steps to take beforehand to prepare and understand how a field audit works. One key aspect of a field audit is having a contact person that will communicate with the IRS when they come to your place of business. Below is a list of steps that should be taken prior to having the IRS come to … Read more

Audit Letter: Solving A Correspondence Audit

Today we are going to talk about strategies for handling a correspondence audit. What is a correspondence audit? A correspondence audit is an audit that is issued to the taxpayer through the mail and does not require an onsite review of the taxpayer’s tax return. The taxpayer will receive a notice in the mail requesting them to answer questions that the IRS wants to know more about. Two Options Regarding an Audit Letter The taxpayer has two options regarding the … Read more