Careful way of admitting error to tax auditor?

[AndrewWLA]

What is the name of your state?
California

Does anyone have a suggestion about how I might acknowledge an error on my tax return of 2005?

I'm being audited by mail, so it's by no means the most onerous thing. I have very good documentation for almost everything, including major deductions the IRS has questioned. Unfortunately, I noticed a whopping mistake concerning general sales tax and personal property tax on Schedule A. I think I must have gotten some receipts mixed up and used figures from 2004, when I had some major purchases.

Anyway, I'm about three thousand dollars off for 2005. I obviously have to come clean on this. However, I don't want to appear a total idiot -- which I may well be -- and thereby possibly invite them to open up this limited audit.

Is there some kind of diplomatic language I could use in my response that says, yes I screwed up, but it was a genuine accident...? Thanks.

 

[LdiJ]

What is the name of your state?
California

Does anyone have a suggestion about how I might acknowledge an error on my tax return of 2005?

I'm being audited by mail, so it's by no means the most onerous thing. I have very good documentation for almost everything, including major deductions the IRS has questioned. Unfortunately, I noticed a whopping mistake concerning general sales tax and personal property tax on Schedule A. I think I must have gotten some receipts mixed up and used figures from 2004, when I had some major purchases.

Anyway, I'm about three thousand dollars off for 2005. I obviously have to come clean on this. However, I don't want to appear a total idiot -- which I may well be -- and thereby possibly invite them to open up this limited audit.

Is there some kind of diplomatic language I could use in my response that says, yes I screwed up, but it was a genuine accident...? Thanks.

Just simply admit that you made an error on that issue. Don't sugar coat it nor over explain it. Simply admit the error. Something along the lines of..."In reviewing my records I realize that I made the following errors:" then list the errors.

In fact, if I were handling it for a client, I would enclose an amended return (marking it for informational purposes only) and include payment to rectify those errors. There is nothing that gets you more brownie points with the IRS than admitting an error and paying for it, BEFORE the IRS finds it.

 

[irsos]

Does anyone have a suggestion about how I might acknowledge an error on my tax return of 2005?

I'm being audited by mail, so it's by no means the most onerous thing. I have very good documentation for almost everything, including major deductions the IRS has questioned. Unfortunately, I noticed a whopping mistake concerning general sales tax and personal property tax on Schedule A. I think I must have gotten some receipts mixed up and used figures from 2004, when I had some major purchases.

Anyway, I'm about three thousand dollars off for 2005. I obviously have to come clean on this. However, I don't want to appear a total idiot -- which I may well be -- and thereby possibly invite them to open up this limited audit.

Is there some kind of diplomatic language I could use in my response that says, yes I screwed up, but it was a genuine accident...? Thanks.[/QUOTE]


I do not per se disagree with the previous poster's response, but I would handle it a little differently. If general sales tax and personal property taxes were included in the correspondence audit, I would simply supply the support for what I have and not really call attention to it. An adjustment will be made with no fanfare. If they were not part of the audit, I would respond only to what they are asking for and then file an amended return later. You won't get in trouble with either approach.

 

[irsos]

Error on Return and Audit

What is the name of your state?
California

Does anyone have a suggestion about how I might acknowledge an error on my tax return of 2005?

I'm being audited by mail, so it's by no means the most onerous thing. I have very good documentation for almost everything, including major deductions the IRS has questioned. Unfortunately, I noticed a whopping mistake concerning general sales tax and personal property tax on Schedule A. I think I must have gotten some receipts mixed up and used figures from 2004, when I had some major purchases.

Anyway, I'm about three thousand dollars off for 2005. I obviously have to come clean on this. However, I don't want to appear a total idiot -- which I may well be -- and thereby possibly invite them to open up this limited audit.

Is there some kind of diplomatic language I could use in my response that says, yes I screwed up, but it was a genuine accident...? Thanks.

To post again. If sales tax and personal property taxes were part of the correspondence audit, simply supply the support for what you have. They will make the adjustment with no fanfare. If it was NOT part of the audit, supply the support for what they asked for and file an amended return later.

 

[AndrewWLA]

Just simply admit that you made an error on that issue. Don't sugar coat it nor over explain it. Simply admit the error. Something along the lines of..."In reviewing my records I realize that I made the following errors:" then list the errors.

In fact, if I were handling it for a client, I would enclose an amended return (marking it for informational purposes only) and include payment to rectify those errors. There is nothing that gets you more brownie points with the IRS than admitting an error and paying for it, BEFORE the IRS finds it.

Thanks, that's very sound advice. I hadn't thought of enclosing a check. Nice touch!

 

[AndrewWLA]

To post again. If sales tax and personal property taxes were part of the correspondence audit, simply supply the support for what you have. They will make the adjustment with no fanfare. If it was NOT part of the audit, supply the support for what they asked for and file an amended return later.

Good point. I like the idea of sending the IRS a check ahead of any final determination, but I probably should wait -- there's bound to be a late fee and interest assessed as well.

What I particularly take away from the above comments is that I shouldn't make a big issue of the mistake and over-explain. Will take that to heart. Thanks again.