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Old 04-07-2011, 11:57 PM
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IRS audits a small client with Revenue $65,000!

Our client has been selected for an Audit on the 2007 Tax Return. But, wait, this is a very small client whose revenues are less than $75,000, but it is a Schedule C client! The client claimed auto miles and travel expenses that appeared to be quite high, but the client is in the delivery business!

I would like to hear other CPA's give their experience regarding their tax clients 2010 audit experiences. What are the areas being targeted?

This would be a good forum for CPA's to give experiences and outcomes as well. Also some potential strategies one could use to assist their clients.

Thanks!



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Old 04-08-2011, 12:02 AM
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Join Date: Feb 2010
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This is shocking news Mike! I not sure if I am outraged or worried for my other clients. I think the IRS should have gone after the larger clients or so called cheats who operate mainly cash businesses!

I am not sure that the IRS targeted this client but rather was randomly selected due to the higher Travel and Mileage usage. I would recommend that you have your client provide a mileage log to substantiate the business mileage.

I think your client should be prepared for an IRS adjustment on his 2007 tax return and make sure he or she has the proper documentation for his expenses that he claimed for both the 2008 and 2009 tax returns.

Good luck and let us know the outcome...!



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