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Tax Audit

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cybervision

Junior Member
What is the name of your state? GA

I have a question for you in regards to my tax audit. I have a small business and I am a sole proprietor. I recently went in for my appointment with the auditor and it seemed all went OK until she looked at my bank statements. She said that I have about $100,000 unaccounted for in my receipts. I was surprised to hear that since I record every receipt. When I went home, I started looking farther into it, and figured out that I also used this account for personal use. I told her that I used this account for business only, buy after looking at the checks and the statements, I figured out that was the year when I was going to close my business and started also using the account for personal needs.
Can I tell the auditor now that I also used the account for personal use and not just for business? I have another appointment with her in 3 weeks.
Also, she asked me to bring details to my deductions that were not on the original agenda.
On the original agenda she asked to bring supporting documents for Cost of Goods, Receipts, and Car expenses.
Now, after the first appointment, she says she wants to also look at Travel Expenses, Meal expenses, and the Office Supplies expenses on the next appointment.
Can they do that?

Thanks for your help in advance.
 


LdiJ

Senior Member
What is the name of your state? GA

I have a question for you in regards to my tax audit. I have a small business and I am a sole proprietor. I recently went in for my appointment with the auditor and it seemed all went OK until she looked at my bank statements. She said that I have about $100,000 unaccounted for in my receipts. I was surprised to hear that since I record every receipt. When I went home, I started looking farther into it, and figured out that I also used this account for personal use. I told her that I used this account for business only, buy after looking at the checks and the statements, I figured out that was the year when I was going to close my business and started also using the account for personal needs.
Can I tell the auditor now that I also used the account for personal use and not just for business? I have another appointment with her in 3 weeks.
Also, she asked me to bring details to my deductions that were not on the original agenda.
On the original agenda she asked to bring supporting documents for Cost of Goods, Receipts, and Car expenses.
Now, after the first appointment, she says she wants to also look at Travel Expenses, Meal expenses, and the Office Supplies expenses on the next appointment.
Can they do that?

Thanks for your help in advance.
Auditors can pretty much do whatever they want, whenever they want. Be very up front and open with the auditor. You will come out ahead in the long run.
 

CraigFL

Member
That's good advice. When I went thru my audit, I gave the auditor everthing they wanted and detail and it went smoothly.
 

cybervision

Junior Member
Thanks for your replies.
I guess my biggest concern is, can I tell her now that I used this account for personal as well? I mean it's the truth that I didn't remember, but how can I tell her that and what kind of documentation do I provide to make her beliave?
 

tranquility

Senior Member
When an auditor says you have $100,000 more in receipts in an account that reported for a businsess, merely saying you use this account for personal reasons as well doesn't solve the problem. Were did the money come from? That's what you need to explain. Someone paid you back some money? You got a gift? Where?
 

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