If you are being audited, you're going to suffer some damages, be it in time, comfort, convenience or money. What you can do is control the amount of damage.
These tax audits request information about everything you do and all your financial information. The IRS is seeking unreported income. The first two lines request 13 months of business bank statements and 13 months of personal bank statements. The IRS' goal is to find money you haven't reported. The Service focuses less on the deductability of each expense than unreported income. IRS Commissioner Eberson applied the 80/20 rule, understanding that the IRS collects 80% of its tax in the first 20% of the audit. The IRS performs a piercing examination, looking for hidden income in the most common places.
These new tax audits examine every aspect of your lifestyle: everything you spend money on, every dollar that comes in. They're complicated, lengthy and painful.
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