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New With The IRS-They Suck And Will Keep Coming After You

By August 4, 2015IRS
New with the IRS

Learn what’s new with the IRS

They are going to keep coming after your money and will succeed unless you have a few things in place.

This morning I had the pleasure of meeting with a field examiner from the IRS.  A field examiner is a type of auditor.  They are generally more educated than the guys you talk to on the phone. Every time I meet with an auditor I learn something new with the IRS.  I can tell you that the new things I’m learning are never good things.  The new things I learn show how dysfunctional the whole tax system is.  (As a side note, I think the government sucks at spending your money.  I think the IRS is not very good at its job and has way too much power.  But compared to other countries, our tax system is better, and the freedoms we enjoy are phenomenal. I love being an American!)

Something New with  the IRS

The new thing I learned today is what the auditor kept referring to as the taxpayers “Cash T” account.  Cash T?  What is that?  “The IRS has a statistical database, I don’t know where they got it, but they use it to see if the taxpayer can support their life based on the tax return filed”.  Meaning, if the tax return shows little taxable income or a loss, the IRS often wants to know how the taxpayer supports their living expenses.  I actually already knew that part.  It’s a common question in audits.  The part that surprised me is they are using a statistical database.  If there is one thing I learned from my statistics class in college and other statisticians I have spoken to, it’s that all numbers can be manipulated to show what you want.

The other thing that came out in the meeting, which is just a good reminder for you, is that it is always best if you have an accounting system in place.  These particular clients, like many small business owners, don’t have a formal system.  So now we need to put together what they did use to come up with the numbers.  If you can pull numbers from an accounting software, you gain instant credibility with the auditor.  No formal system and they want to dig deeper.

I make it my business to stay updated and well educated in this realm so that the IRS doesn’t take advantage of you or your business.  Call me if you have any questions  or if you are needing some clarification on a certain topic.  We’ll keep you in the loop with what’s new with the IRS.

Call: 801-999-8295
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