HOME OFFICE DEDUCTION: IS THIS REALLY AN IRS AUDIT RED FLAG?

If you use part of your home as a designated office space, the question is: Will claiming the deduction increase your chances of being audited?

Many articles are written on this subject and they all agree with each other that home office deductions are a red flag. None of them have any evidence backing that up.

The most common expenses you can allocate a portion of to your home office include:

1.  Mortgage Interest

2. Real Estate Taxes

3. In...

IRS TAX AUDIT HELP: DO THEY HAVE ANY PROFESSIONAL CREDENTIALS?

When it comes to Taxation and Audits, many people claim to be “Tax Experts.” They make claims about their experience that are unverifiable.

No matter what field you work in, having professional designations after your name puts you a step above the rest. There is a certain level of pride that comes along with them, and it shows people you put in the hard work and time it took to earn those letters.

This is exceptionally true in the Busi...

IRS TAX AUDIT PROBLEM? WHO IS WRITING THESE BOOKS?

These days you can find books written on just about any topic, but the real question is: who is writing these books? This question becomes even more important when you’re talking about books written on business, investing, taxation, auditing, etc. For the sake of this article, let’s talk about books that are written on taxation and auditing.

IMPORTANT QUESTIONS TO ASK:

​1.  What is the educational background of the author?

2. Do they have any profes...

TRUE STORIES OF A TAX ACCOUNTANT: PHANTOM BUSINESS MONEY LAUNDERING?

I had quite the interesting predicament this year. One of my clients was this couple, let’s call them Brad and Angelina. (No, I’m not referring to Brad Pitt and Angelina Jolie!) Brad and Angelina live in the heart of New York City and have been my clients for years. Last year they came to me, but their return was a little different than the previous years. Both Brad and Angelina now had sole proprietorship businesses that each h...

IRS TAX AUDIT DEFENSE: PRODUCT VS.

SERVICE VS. INSURANCE

So you’ve received an IRS tax audit letter or a NYS tax audit letter. Do you need a product, a service, or insurance?

A PRODUCT:

A product is something tangible that is manufactured or made for sale.

This comes in the form of the Audit Defense Package. With the Audit Defense Package you receive everything you need to defend your tax deductions in a do-it-yourself package. It is cost-effective and the most economical solution to resolve a taxat...

HOW DO YOU KNOW IF IT’S A SCAM OR AN IRS AUDIT?

Phone scams where callers impersonate real IRS agents working on a tax audit and request immediate payment are running rampant. In my experience, there are many clear-cut differences between actual IRS agents working on a tax audit and phony scammers; however, it is not always so easy to tell.

WHAT THE IRS OR THEIR COLLECTION AGENCIES WILL DO:

1. The IRS or their contracted collection agencies will inform you about the electronic payment options for...

Authorized by Congress under Section 32102 of the Fixing America’s Surface Transportation Act (FAST Act), the IRS is required to use private collection agencies to collect certain outstanding, inactive tax debts that have resulted from an IRS tax audit.
 

Taxpayers who are having their accounts transferred will receive two separate pieces of mail correspondence. The first will be a letter from an agent working on your IRS tax audit explicitly stating that the taxpayer’s account will be transferre...

A client was audited by New York State for their 2015 Married Filing Jointly tax return in 2016. Without communicating with me, they fell for the "Standard Deduction Seduction." By agreeing to accept the standard deduction, they agreed to pay $260 to the state to end the audit quickly, and they thought, inexpensively. They are supposed to file an amended return with the IRS, to reflect the disallowed deductions. I calculated the additional tax owed to the IRS as $2,600, 10 times the additional t...

The IRS has established 88 Information Sharing Agreements with the states, municipalities and state labor departments. They put these in place intending to use them. Every time the IRS or a state taxing authority makes a tax adjustment as a result of an audit, they automatically notify the other party to the agreement, electronically.

The taxpayer is expected to file an amended return to the taxing authority that did not audit them. Frequently the taxpayer does not want to do this. They may not w...

YOU may be audited within the next -5- years.

A) WHY ARE YOU THE AUDIT TARGET? Because …

The IRS audits 1.25 million returns of the entire 350 million US population. If, for some reason, they chose New York for a full 50% of their audits, New York would be subject to 600,000 audits annually. In fact, the New York State Department of Taxation and Finance is mass auditing 700,000 individual (not corporate) tax returns per year. In 5 years, they'll audit 3.5 million returns. New York population:...