Being Audited

I'm facing my first audit and I was wondering if anyone can share an audit experience with me so I know what to expect.

I'm kind of nervous because my pc crashed a few months ago and lost some files on jobs I did and the prices I charged. I fixed it up as best as possible by comparing bank statements and deposit slips. I'm nervous that I may have missed something and they will find my mistake. Do they do spot checks and randomly call a customer to ask information about you and find out what they paid you? Also I had a helper working off the books, do they have the right to call customers and ask if anyone else was working with me?

i would think that they would just check your bank statements to verify your info is in line,as well as check some of the receipts you have to make sure your writeoffs are accurate,my accountant tells me the irs runs everyones return through a software system that throws up red flags for audits,i dont think they will actually take the time to call your customers. i would be prepared to give an explanation for the money that was written to one person on a recurring weekly basis,your help is tax deductible,you are actually hurting yourself by not claiming him.

High Pressure,
Don't sweat it. I've been thru it once before and I'm sure I will go thru it again in the future. Bring all your reciepts for the year in question along with your paid jobs list or whatever you call it that shows your income from your business. Don't give them any other info then your suppose to. Hopefully your numbers match up pretty good with your reciepts.

Be prepaired for them to find a minor discrepency where you may owe a couple of bucks just to satisfy them.

They found nothing with me so they said that they think I use my truck for my own use once in awhile and they wanted me to pay them around $200. I could of went to the trial room and fought that but my accountant advised against it so they will leave me alone because they feel like they accomplished something.

So I paid. Withough discussing this any further I really can't complain...

Just a few tips,

Get out your yellow pages and look under "Accountants." Look for any ads that say "...former IRS agent." Call and make an appointment. The average person is law abiding and wants to say and do the right thing. You need to find out the way the IRS questioners work and what they are looking for. These type of accountants are worth their weight, trust me! If you can avoid going in - send your accountant representative. You will be so nervous at the interview- and the way IRS are trained to question, you are likely to admit to shooting Lincoln!

Good luck and get a better computer system!

Get an accountant. We use one, and sleep better as a result.
There are a couple of areas we would never try to handle alone:

Accountancy
Law

Good luck, and I hope everything turns out well.

Beth

Maybe if you show up with all your papers and things mixed up in a big box they will tell you to get out of their office.

I think the accountant idea is the best. Let a pro handle it for you. good luck and please let us know how it goes.

To repeat, with perhaps a little more emphasis, what has been stated already (esp by Johnny), have an accountant meet with the IRS. It is good strategy to have representive attend this meeting without you present.