What is the name of your state (only U.S. law)? HAWAII
Hello, I need some advice.
The IRS audited me in April 2014 for year 2012.
In 2013, I closed my failing business and filled for Chapter 7 bankruptcy and my debts were discharged. From that point I made a terrible mistake and threw away every document related to that business thinking to leave that nightmare behind me and start fresh. (not to mention that since I lost everything and ended up loosing my home; I just couldn't imagine myself moving from home to home with years of business records), a 2 months old baby and a wife. Anyway... I know it was mistake.
The audit went well as I did have a copy of my 2012 P&L and Income statement. The IRS agent and I went over each line (one by one) and I was able to answer every single question. When he asked me why I was not able to provide him with the business bank statement and Credit card statement for 2012. I simply told him what the bank, Amex and Capital One credit card told me. Because of the bankruptcy, they are NOT allowed to send me anything (nor communicate with me whatsoever). There was 2 ways to get these records: Either my lawyer contact them OR the IRS can just make a formal demand for their investigation.
The IRS agent said that he will definitely contact them and get all the records he need to complete his audit. After 4 hours of meeting with the IRS, he then apologized for making me relive my nightmare and added that he was kind of "beating a dead horse" but he wanted to put his hand on those statement in order to have an accurate report.
9 months later (january 2016) I finally receive the conclusion of the audit.
It was prepared by another IRS agent (my guess is the one that I met just retired not long ago).
EVERY single business expenses have been disallowed for not being able to show records. I need to pay over $75,000.00 with penalty. Everything I claimed looks like was BS.
I agree that I made a mistake throwing away my records but ALL were available with the creditors (that I was not allow to contact directly).
- Can I contest the result of the audit? and hire an attorney that would be able to get all the statement necessary from banks and credit cards along with copy of receipts from various creditors.
- I doubt that the IRS actually tried to collect any missing record as the first agent mentioned he will do. Why would even something like 1099 be disallowed in full when obviously, the IRS could have easily check if my service providers claimed on their end.
I guess the real question I have is:
Is there a way to fight and repeal that audit result with the help of a lawyer knowing that all bank and credit card statement will given to him?
Am I beyond saving at this point?
I truly dont know what to do at this point. I am an honest person who's business went bankrupt, I always paid my taxes on time. Please help
Thank you for your time
Hello, I need some advice.
The IRS audited me in April 2014 for year 2012.
In 2013, I closed my failing business and filled for Chapter 7 bankruptcy and my debts were discharged. From that point I made a terrible mistake and threw away every document related to that business thinking to leave that nightmare behind me and start fresh. (not to mention that since I lost everything and ended up loosing my home; I just couldn't imagine myself moving from home to home with years of business records), a 2 months old baby and a wife. Anyway... I know it was mistake.
The audit went well as I did have a copy of my 2012 P&L and Income statement. The IRS agent and I went over each line (one by one) and I was able to answer every single question. When he asked me why I was not able to provide him with the business bank statement and Credit card statement for 2012. I simply told him what the bank, Amex and Capital One credit card told me. Because of the bankruptcy, they are NOT allowed to send me anything (nor communicate with me whatsoever). There was 2 ways to get these records: Either my lawyer contact them OR the IRS can just make a formal demand for their investigation.
The IRS agent said that he will definitely contact them and get all the records he need to complete his audit. After 4 hours of meeting with the IRS, he then apologized for making me relive my nightmare and added that he was kind of "beating a dead horse" but he wanted to put his hand on those statement in order to have an accurate report.
9 months later (january 2016) I finally receive the conclusion of the audit.
It was prepared by another IRS agent (my guess is the one that I met just retired not long ago).
EVERY single business expenses have been disallowed for not being able to show records. I need to pay over $75,000.00 with penalty. Everything I claimed looks like was BS.
I agree that I made a mistake throwing away my records but ALL were available with the creditors (that I was not allow to contact directly).
- Can I contest the result of the audit? and hire an attorney that would be able to get all the statement necessary from banks and credit cards along with copy of receipts from various creditors.
- I doubt that the IRS actually tried to collect any missing record as the first agent mentioned he will do. Why would even something like 1099 be disallowed in full when obviously, the IRS could have easily check if my service providers claimed on their end.
I guess the real question I have is:
Is there a way to fight and repeal that audit result with the help of a lawyer knowing that all bank and credit card statement will given to him?
Am I beyond saving at this point?
I truly dont know what to do at this point. I am an honest person who's business went bankrupt, I always paid my taxes on time. Please help
Thank you for your time
