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How many times can an individual be audited ?

 
 
kimshapiro100@yahoo.com
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      03-04-2005, 01:32 AM
How many times can an individual be audited ?

I met someone recently who said she was being audited again,
back to back, 2 years in a row.

Under what circumstances would the IRS normally do such a
thing ?

The first audit apparently was kind of routine. They got a
couple of thousand out of her- some simple errors. Now her
income is even smaller - almost one third of the previous
year and yet they are after her again.

She is self employed with not much income. What would they
be looking for?

Can anyone shed some thoughts ?

Can she appeal being targeted ? She was in tears.

Thanks
Kim

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Mark Wiley
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      03-07-2005, 10:10 AM
<(E-Mail Removed)> wrote:

> How many times can an individual be audited ?
>
> I met someone recently who said she was being audited again,
> back to back, 2 years in a row.
>
> Under what circumstances would the IRS normally do such a
> thing ?
>
> The first audit apparently was kind of routine. They got a
> couple of thousand out of her- some simple errors. Now her
> income is even smaller - almost one third of the previous
> year and yet they are after her again.
>
> She is self employed with not much income. What would they
> be looking for?
>
> Can anyone shed some thoughts ?
>
> Can she appeal being targeted ? She was in tears.


Not sure about your friends situation but the first advice I
would give you is to get a QUALIFIED CPA to do her tax
returns. A qualified CPA will know what the IRS is looking
for and also whether he can defend her in the audit
successfully.

Mark Wiley
Accountant
Oneonta, NY 13820

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Frederick Jorden
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      03-07-2005, 10:10 AM
(E-Mail Removed) wrote:

> How many times can an individual be audited ?
>
> I met someone recently who said she was being audited again,
> back to back, 2 years in a row.
>
> Under what circumstances would the IRS normally do such a
> thing ?
>
> The first audit apparently was kind of routine. They got a
> couple of thousand out of her- some simple errors. Now her
> income is even smaller - almost one third of the previous
> year and yet they are after her again.
>
> She is self employed with not much income. What would they
> be looking for?
>
> Can anyone shed some thoughts ?
>
> Can she appeal being targeted ? She was in tears.


If a taxpayer is audited for several years in a row and they
result in no additional tax the IRS is required to flag the
taxpayer not to be audited for the same issue. The case you
cite is not this case. If an audit results in thousands of
extra tax it is a good idea for the IRS to look at the next
year.

--
Frederick E. Jorden http://Tax-Accounting-Payroll.com
7825 Midlothian Tpk - 207 Richmond, VA 23235-5247
EMAIL (E-Mail Removed)
(804) 320-6210 FAX (804) 320-6211

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Arthur Kamlet
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      03-07-2005, 11:07 AM
<(E-Mail Removed)> wrote:

> How many times can an individual be audited ?


I'm not aware of any limit. But it makes sense that if an
audit turned up a few thousand dollar error in the audited
year, it might just turn up more errors in other years.

> I met someone recently who said she was being audited again,
> back to back, 2 years in a row.


I understand that by tradition, the President of the United
States is audited every year.

All an audit does is verify that what you reported on your
tax return is correct. And you can show it to be correct.

> Under what circumstances would the IRS normally do such a
> thing ?


They don't publish their audit triggers.

> The first audit apparently was kind of routine. They got a
> couple of thousand out of her- some simple errors. Now her
> income is even smaller - almost one third of the previous
> year and yet they are after her again.


Just random errors would be expected to find she gave the
IRS a few thousand too much as as often as the other way
round. So they might be doing her a favor since they could
find errors she made against her own interests and she would
get a few thousand refund.

> She is self employed with not much income. What would they
> be looking for?


They want to verify that what was reported was true and
correct.

> Can anyone shed some thoughts ?
>
> Can she appeal being targeted ? She was in tears.


Then she might consider turning the audit job over to a tax
professional who can represent her in an audit. She would
not have to be present.

__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH

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Bryan Kellar
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      03-07-2005, 11:45 AM
<(E-Mail Removed)> wrote:

> How many times can an individual be audited ?


In short, as often as necessary. If the IRS has a doubt as
to the accuracy of a return, they can ask for more
information. However, that being said, if the IRS is
auditing on the SAME issue, and there was no change in the
previous year, you can usually get them to back down on that
basis.

> I met someone recently who said she was being audited again,
> back to back, 2 years in a row.
>
> Under what circumstances would the IRS normally do such a
> thing ?


If they think there is a mis-statement or understatement of
tax liability.

> The first audit apparently was kind of routine. They got a
> couple of thousand out of her- some simple errors. Now her
> income is even smaller - almost one third of the previous
> year and yet they are after her again.


Do we know that the same simple errors were not made again?
This return was likely filed before the previous audit was
done, no?

> She is self employed with not much income. What would they
> be looking for?


Aah..... Kinda hard to tell with the limited information
here. But....... Does she have a child or two and is the
Earned Income Credit involved? I've seen a fair number of
letters for that. What were they looking for last time?

> Can anyone shed some thoughts ?
>
> Can she appeal being targeted ? She was in tears.


Targeted? It sounds like she had an error in a previous
year, they corrected it, and the same error may have been
made this year. It has been many years since I have met
someone I thought the IRS was really picking on. If we new
the issue they were auditing, we might be able to shed some
light on this for you.

Bryan

--
Bryan Kellar, EA
Oregon Tax Help, Inc. -- Portland, Oregon
www.oregontaxhelp.com
www.canadatax.org

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Arthur L. Rubin
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      03-07-2005, 11:45 AM
(E-Mail Removed) wrote:

> How many times can an individual be audited ?
>
> I met someone recently who said she was being audited again,
> back to back, 2 years in a row.
>
> Under what circumstances would the IRS normally do such a
> thing ?
>
> The first audit apparently was kind of routine. They got a
> couple of thousand out of her- some simple errors. Now her
> income is even smaller - almost one third of the previous
> year and yet they are after her again.
>
> She is self employed with not much income. What would they
> be looking for?
>
> Can anyone shed some thoughts ?
>
> Can she appeal being targeted ? She was in tears.


If the audit is for the same reason, and the first audit was
settled for no change (in regard that reason), she can
request the audit be closed for no change. Otherwise,
there's nothing she can do.

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D. Stussy
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      03-08-2005, 09:58 AM
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> How many times can an individual be audited ?


As often as necessary as long as changes are being made.

> I met someone recently who said she was being audited again,
> back to back, 2 years in a row.


That's nothing. I had 8 years in a row done, with years 2,
3, 4, and 8 going forward to appeals. A 9th year was
involved as an "information only" year. The IRS also blew
the period of limitations on one of the years (year 7), and
left several issues inconsistently treated (allowed in some
years; disallowed in others - and that result NOT due to
documentation problems). Year 1 was a refund (as claimed),
and years 5 & 6 no-changed (but I never did get a letter 590
from them). None of these were related to my hiring audit.

> Under what circumstances would the IRS normally do such a
> thing ?


In my case, it was because I had reported an IRS official
who was my superior (before I left the agency) to Inspection
(the predecessor to TIGTA), and he was subsequently asked to
leave - then got nailed again because of his involvement
with "R-TTP" in Kansas.

> The first audit apparently was kind of routine. They got a
> couple of thousand out of her- some simple errors. Now her
> income is even smaller - almost one third of the previous
> year and yet they are after her again.
>
> She is self employed with not much income. What would they
> be looking for?
>
> Can anyone shed some thoughts ?
> Can she appeal being targeted ? She was in tears.


Not really. If they were able to make changes, then her
books weren't in order.

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D. Stussy
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      03-13-2005, 11:56 PM
Arthur Kamlet wrote:

> I understand that by tradition, the President of the United
> States is audited every year.


Your understanding is wrong.

What certain public officials do is PUBLISH their tax returns. With public
inspection, usually any errors are quickly made evident.

If memory serves me correctly, the last sitting POTUS who had a tax return
initially selected for audit was Gerald Ford. It did not progress to the point
where he had to actually produce documents for an actual examination.

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