[Dixielandjazz] I am not a Paid Tax Preparer folks.

[TCASHWIGG at aol.com]

In a message dated 3/13/05 9:14:33 AM Pacific Standard Time, dwlit at cpcug.org 
writes:

> 
> The IRS audited my 1987 tax return, a $100k "gig" year.
> The best advice I ever got was from a musician tax lawyer: the audit is NOT
> out to get you, but to see whether you need to be gotten. Therefore, you
> should view it as an educational *opportunity*. 
> 

Hi Dave:

For the most part I would say this is true, however be aware that there are 
some overzealous idiots working for them as well that are Hell bent on making a 
name for themselves by auditing and COLLECTING additional taxes for the IRS, 
legally or illegally.

The last on I encountered was such a moron, who sat eating his lunch at his 
computer during the start of the audit and systematically ripped apart my 
return, disallowing everything in my Sch. C except the amount of income I had 
claimed.  

Did a print out and told me I owed the IRS $95,000.00 for that year and he 
was going to do the same for the next two years.

I advised him that the audit was over and that he would not even be allowed 
to discuss the next two years, and told him that when I finished with him, he 
would no longer be working for the IRS.  I packed up my books and left his 
office.  Went straight to my Congressman's office with them and showed him what 
this fool was trying to do.   

Two weeks later I received an appointment with the original auditors 
supervisor, who went over the returns with a fine tooth comb and came back with 
absolutely NO changes in my original filed return, took a quick look at the next two 
years and found they were also very carefully documented and accepted them as 
well.   

The original auditor I was told, "Was no longer with the IRS." 

I also advised them that they had now conducted seven audits on me and never 
found anything wrong with my original returns as filed and that if they did 
not leave me alone I would start filing lawsuits against the IRS for harassment. 
 I have been left alone now since 1995.  Let's hope it stays that way, as 
they have wasted enough of my time and taxpayers money barking up the wrong tree.

I still maintain that you do not have to cheat or not claim your total 
income, just keep records of what you spend in the course of operating the business 
and you have little or nothing to worry about in an audit unless you do as 
Dave says, S-T-U-P-I-D things and claim stuff you have absolutely no way of 
backing up or justifying.

I use spread sheets in Excel and sometimes I use the tax programs, but lately 
have gone back to doing the returns by hand, because the tax programs do not 
always work because they are pretty much standardized for the average user.

As for computer generated returns being less likely to be audited, I don't 
concur with that because the ones that the overzealous guy selected for audit 
were all computer generated and e-filed.  

When I run into one of those guys, I like to not show him my spread sheets at 
all, but take all the invoices contracts and receipts, canceled checks and 
shake them up in a big box and then deliver them to him and tell him to call me 
when he has it all figured out.

I had one guy in the 70s tell me he was going to audit three years worth.
I gave him everything for all three years in boxes like that.
He spent about two weeks he said, putting together a spread sheet from the 
first year and actually found more deductions than I had claimed.  He related to 
me that my return was fine, changed my refund amount sent me a check for the 
additional refund and had the other two years worth of papers returned without 
even looking at them and accepted those returns as filed.

A good word of advise to anyone who is selected for audit, make sure your 
returns are as accurate as possible with no mathematical errors which cause most 
audits anyway.

Remember you could be an interesting audit for an auditor who has never 
audited a musician before, and they don't get out much folks, since most folks 
don't knowingly invite IRS employees to their parties.  Most of them have few 
friends as a result of the overall Intimidation tactics that the system has used 
for years.

Do not be intimidated, but at the same time don't be overly arrogant with one 
of them unless necessary and you can back it up with facts.  Stand up for 
what you believe to be accurate, and if you are convincing the reasonable doubt 
syndrome generally will be applied.



Cheers,

Tom