IRS question

[Madam Mossfern]

We are in the midst of an IRS audit. Our accountant is handling our case in the inquisition. We are sure that we will come out of the audit not owing the IRS a red cent. The accountant fees will cost us thousands. Do I get to bill the IRS for our expenses?

[NMDemDist2]

1. hmmm

every accountant I ever had, an audit was included in the fees. they stand behind their work, they deal with the IRS. It's part of the contract.

[Madam Mossfern]

2. hmmmmm

thank you. I will take this up with the person who hired the accountant, when I decide to speak to him again. This may be soon as we share a bed.

[dems_rightnow]

4. Not usually.

Representation before the IRS is not typically included in the tax preparation fee.

Nor will the IRS pay the fee.

[AlCzervik]

3. Did the accountant helping with the audit file the original return?

if so and they messed up then there should be no charge.

[TexasObserver]

11. You're imputing responsibility for the audit that probably isn't there.

The CPA does not and cannot make a return audit proof.

Unless another CPA will swear in writing that the first CPA screwed up the return and caused the audit, there is NO CASE against the first CPA for the CPA costs of the audit.

[leftyclimber]

5. Unfortunately the IRS doesn't give a damn.

If you have someone who is your full time CPA and includes audits in your fees, you're covered. If that isn't part of what you're paying them for, unfortunately you're on the hook for the payment. Talk with your CPA about payment arrangments and/or how their firm prefers to handle audit fees. Although part of their job is to get you through the audit, CPAs don't like them any more than anyone else.

ETA: Also what chimpsrsmarter said, assuming the audit was triggered by a tax return error. If you had a drastic income change over the last year or something similar, that's an instant flag for an audit. You can also be selected randomly.

Audits suck. :hug:

- CPA's offspring lefty

[drumtrip]

6. Hmm

I am sorry but I don't believe you get to, though I know audits are not random, I believe the IRS does not incur any liability for your costs to your accountant.

/Used to work for Jackson Hewitt
//never worked with people who were audited though

[143tbone]

7. Isn't this like when a cop stops you--they have to have a reason?

What was the reason for the audit? What was the red flag? Was it from a mistake your accountant made, or because he didn't file the proper form?

[Madam Mossfern]

9. It was because they couldn't understand after 20 years

that we had income property on our property. We had to produce all bills related to repairs to the income property and documentation that we didn't purchase it separately. I think I need a conversation with the accountant personally. My rant tonight was WTF- its the same friggin' address, how stupid can they be. The rental was grandfathered in our deed.

Something is not right and somehow I think there's information about this that I'm not getting. It doesn't make sense at all.

[TexasObserver]

8. No, but you do get to deduct from your income the CPA costs.

[Madam Mossfern]

10. Thank you

that's a bit reassuring.

[TexasObserver]

12. You might also want to get another CPA to let you know if the first CPA screwed up.

It is possible your current CPA screwed up, although it's also highly possible the audit is not provoked by anything he did.

If your level of revenues is too great compared to your official "income," that can trigger an audit of a small business taxpayer. If there are unusually high deductions for certain expenses, such as travel or entertainment, that can trigger an audit.

Has the IRS given any indication why it chose you for audit? Is there some reason they have stated, or that you suspect? The reason I ask is that would help you figure out what went wrong.

There may be absolutely no reason to doubt the work your CPA did on the return, but you won't know unless you get a second opinion from another CPA, based upon seeing the return and the actions of the IRS.

[flstci]

13. I have usually used a tax attorney rather than a CPA.

I am not sure about CPA's but a tax attorney will do the audit as part of the fee.

Good Luck!