029: Tips for Handling an IRS Audit - published 07/31/2017

Learning Objectives

Perspective

During the audit

Tax gap

Who pays what

Audit triggers

IRS' interest in small business

Unreported income

Business or Hobby?

Partnership & S-Corp audits

Form 1099-K matching

Fraud

Types of audits

Correspondence

Office

Field

TCMP

CP2000 notice

IRS Integrity verification operations

Audit representation

IRS request for small business electronic accounting records

Audit process

Correspondence audit

Inventory analysis and selection

Exam issues

Initial letters and notices

Letter 566

Acknowledgement and interim letters

Follow-up letters and notices

Resolve disagreements and reconsideration

Taxpayer digital Communications.

Audit selection

Pre-contact planning

Schedule A

Schedule B

Schedule C

Schedule D

Schedule E

Managing the audit

Auditing income

IRS reconciliations

Bank deposit analysis

Minimum income probes

S-Corps

Information gathering

IDRs

Summons

Powell factors

Third party summons

John Doe summons

Role of tax preparer

What rules apply to tax preparers

Preparer considerations

Requirements to make reasonable inquiry

Circular 230 practice before the IRS

Tax advise levels of authority

Duty of competence

Due diligence

Representations to the IRS

Preparer penalties

Fringe benefits

Personal expenses

Resolving the exam

Closing agreements

Civil penalty issues

Qualified offer

Statute extensions

Statute of limitations

Amended returns

Reconsiderations

Conflicts of interest

Market segment specialization program

MSSP - Pizza restaurants

MSSP – Ministers

MSSP – Attorneys

Preparing for MSSP audit

Taxpayer Bill of Rights

Taxpayer Advocate

Confidentiality privileges

Tax preparer confidentiality privilege

Preparing for an audit – IRM

Anti money-laundering

Assessment of tax

Contesting unagreed issues after the audit

Conclusion of the audit

Pre-assessment letter 30-day letter

Appeals protest

Recovery of litigation costs

Appeals conference

Ex-parte communication

Closing case out of Appeals

Appeals mediation program

Statutory notice of deficiency (“90-Day” Letter)

Deficiency procedure

Small case requests under $25,000

Filing a formal protest

Settlement considerations

Q&A

Appendix: audit pre-planning - small biz

Initial contact

Correspondence files

Due diligence – reconciliations

Due diligence – organizing records

Due diligence – analytical review

On-site interview planning