Re: Re: Re: Re: Re: Re: Re: UH oh,,,Am I being "audited"? Butch Said: Filing status? That is Head of Household, right? Or does that have to do with my self employment job title? Yep. Steve says: Head of Household is one of the 5 filing statuses. Has nothing to do with a job title. Butch Said: I took the earned income credit for myself and child which I deserve. Then don't worry about it. Steve Says: You better worry about it because by taking the EITC you set yourself in the IRS' cross-hairs. They spend more time, energy and money auditing people who make $12,000 a year and have 2 kids than someone who makes five times that with no kids. Why? The Earned Income Tax Credit, which has always been a target of the Republicans because they see it as a tax give-away to the poor, who don't pay taxes in the first place. just look at the reasoning behind the last 2 tax cuts - if you don't pay taxes you got nothing. Butch Said: I have and claim one child. I am, was, SINGLE, very single. No one lives with me besides my child, supports me or anything remotely like that. See above. Steve Says: See MY above also. The IRS audit strategy is to intercept the EITC before it is paid, and beat the taxpayer into submission by the auditor continually claiming the documentation isn't sufficient. I actually insisted that the IRS come out once and verify by audit whether the taxpayer's 3 year old child was a boy or a girl by looking into the diaper!!!! It was the IRS that made the sex of the child an issue in the first place. Auditors can be real bulldogs when they get it into their head that "this return isn't going to qualify" and facts seldom mean anything to them. I have had to bring some of the most ridiculous IRS positions to Appeals because of unreasonable auditors and the EITC. Butch Said: What will they want from me? Proof. That's all they want. Steve Says: At the least, proof that the child exists (Birth Certificate), that the child lives with you (letter from school or Pediatrician), taht you are the primary support of the household (pay stubs plus utility bills in your name, rent receipts or mortgage staement) and whatever the auditor can think of beyond this. This list is the bare minimum. Butch Said: Any advice? Now it's Gretchen's turn to "validate". That's all it is. Steve Says: IRS is not subject to FDCPA so they don't Validate - they just LEVY.
Re: Re: Re: Re: Re: Re: Re: UH oh,,,Am I being "audited"? This is part of the attack on the EITC. The Schedule C income probably gave you a LARGER EITC than you would have had without it. So.... by eliminating the Schedule C income they eliminate the EITC. You don't need a paid preparer, you need an Enrolled Agent or a CPA to fight this. I have had this type of fight with the IRS before and they can be pretty tough to convince that a Schedule C business is real, instead of a concocted business for EITC purposes.
Re: Re: Re: Re: Re: Re: Re: UH oh,,,Am I being "audited"? Hi Flyingifr, I made an appointment with someone out of the yellow pages. Ad reads: Burdell & Associates Tax Preparation Business & Personal Electronic Filing Representation Bookkeeping We solve your IRS problems 150 years combined experience IRS Audit & Collection Employment Tax Offers in Compromise I spoke with him on the telephone regarding my IRS problem. He assured me that I do in fact owe self-employment tax and to bring in the IRS letter and last year's return. I do not know if he is an enrolled agent or a CPA but I will find out tomorrow. Sounds like I should simply can the EIC. And forget about getting a refund. Count my blessings that I have a job. P.S. Who is Steve? Thanks,
Re: Re: Re: Re: Re: Re: Re: UH oh,,,Am I being "audited"? Ooops,,, Steve = Flyingifr? Sorry, and thanks Steve for the clarifications. Somber as it is, it may help with tomorrows decisions.
Re: Re: Re: Re: Re: Re: Re: UH oh,,,Am I being "audited"? It is kinda' like a CRA saying all your disputes are FRIVOLOUS when you attached PROOF from the CREDIT CARD/LOAN COMPANIES...
Re: Re: Re: Re: Re: Re: Re: Re: UH oh,,,Am I being "audited"? Yes, Steve = Flyingifr. No, do NOT give up on the EITC, because (a) that's what the IRS wants you to do and you face a ten-year bar from cliaming the EITC if you are found to have claimed it fraudulently and (b) if this accountant's abilities match his advertising, he should be able to represent you to get the EITC paid to you if you are entitled to it. Giving up on the EITC and going to this accountant is similar to going to a doctor and not telling him half the symptoms. Let the accountant do what he is trained to do - represent YOUR interests.
Re: Re: Re: Re: Re: Re: Re: Re: UH oh,,,Am I being "audited"? Okay, looking good.... Once in the building, I was offered coffee, soda or the assistant would gladly run me around the building a few times as I waited for Mr. Burdell. lol I read Mr. Burdell's qualifications on the wall while I waited. He is retired from the IRS as Chief of something after 15 years or another and the list goes on indefinitely including enrolled agent. After meeting him he told me he works for the same man I do except he does not do his taxes. He also mentioned people that I know that he handles their taxes too. He made me feel very comfortable and I signed a power of attorney as soon as I could. The Power of attorney paper listed three representatives. All of which could be qualified as God in my eyes after he described their qualifications. I do so like the "we" against "us(IRS lady agent)" factor vrs. "I" against "us(IRS lady agent)". After giving Mr. Burdell my details, he said that was all I needed to do except to send him a check for the bill he is going to send me. He charges $120.00 an hour. If it goes to appeals then we would discuss that price if and when it came to that. Appeals? I said, "All over $999.00?" He said, "Yes." He did not suggest making any changes to my 2002 return. For the rest of the hour we chatted about his kids, his conversation with the Senator, his other clients, celebrities, I even got to hold up a real Olympic torch that they carry in the Olympics! It was surprisingly very heavy. He had his hallway lined with b/w photos of the old Las Vegas. He pointed out what was what and where now. Over all, the visit was fun! The good news out of all of this is I now have a tax accountant I trust! One less thing I have to worry about each year. Yeah! Thanks again, Steve.
Re: Re: Re: Re: Re: Re: Re: Re: Re: UH oh,,,Am I being "audited"? You're welcome. Speaking as one highly qualified professional in this field about another, I think you found a good choice of representative. If he does his job right it won't get to appeals, will probably be resolved with about 1-2 hours' work. I have done many of these and I know how frustrating it can be. How do you prove to some faceless bureaucrat on the other side of the country that your kid is yours? Good luck.
Re: Re: Re: Re: Re: Re: Re: Re: Re: UH oh,,,Am I being "audited"? Longest day on earth for me...*yawn* Mr. Burdell called the IRS and sent out the letter he wrote and the documents today along with a copies of the letter to me. We just spent an hour on the phone discussing, I mostly listening and asking questions about tax laws for corporations in Vegas and how they could benefit me and my daughter with our future business plans. For me, he suggested the LLC showing a profit and then Disregarded Entity as Sole Propriety. He discussed how having my daughter added to the payroll as well as where to put the money, IRA for her college down the road. And lots of other goodies. For any interested, he said the proposals DID NOT go through that would make incorporating in Vegas less desirable unless one was making over $450,000 a year. He said that all is the same as before except a $50 to $100 higher in costs to incorporate. All this for only a hundred dollars. Although future personal returns costs will be $150.00 to $200.00. He said if I Incorporated then there would be an additional $250 to $500 for those returns. Sounds fair enough. Now I just need to show a profit. What a concept! HA
Re: Re: Re: Re: Re: Re: Re: UH oh,,,Am I being "audited"? Thanks Steve, Shew, where would we be without you? lol
Re: Re: Re: Re: Re: Re: Re: UH oh,,,Am I being "audited"? Besides, If you get hit with a bill Gretchen, don't worry. As surely as there is an extension of time to file, there's also an EXTENSION OF TIME TO PAY. Works great under the right circumstances.
Re: Re: Re: Re: Re: Re: Re: UH oh,,,Am I being "audited"? Hey Butch, Lol, the bill should be here tomorrow. I had the cash on me but he specifically requested a check after billing me. I did not object. ;-) He wasted no time. Not that I gave him much. HA! IRS had expected response by Friday, Aug 15. It is my guess that it probably took him 20 minutes to write the letter and get the documents I brought in sent out. He also called them. He spent 2 hours shooting the breeze with me regarding tax return stories in general. I was very curious about the NV incorporating laws and how tos. The weight lifted off my shoulders with a team of professionals to call my own has had an almost intoxicating effect on me. He said he sent me a bill for a 100. You can bet, I am paying him right away!
Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: UH oh,,,Am I being "audited"? You certainly got your money's worth. The $150-200 fee sounds about right - that's what I would probably charge you based on what you've said so far. The important thing to remember is that for that $150-200 you are getting the EXPERTISE behind that return. Anyone can put numbers in a box on an IRS form. That's not what you are paying for. You are paying for the expertise that will bring your bottom line settlement most in your favor, and the expertise to DEFEND that return against IRS scrutiny. In my professional career I estimate I have prepared over 25,000 tax returns. The IRS has chosen SIX of them for audit and I predicted all 6 audits. Not one of them was changed by the IRS and the IRS didn't assess one dollar of additional tax. THAT is what you are paying for. That's what MY clients pay ME for.
