IRS Audit

What is the name of your state? CA
My son is being audited by the IRS. The problem is he cannot locate his deduciton receipts. They may have accidentally been thrown away and he can't recreate them. A CPA did his taxes and never asked for backup receipts. This was thru H&R Block. What should he expect to happen at this IRS meeting?

[abezon]

At worst, he'll have to pay taxes & interest on the disallowed donations. He can contact the donees & ask if they can issue duplicate receipts.

Thanks.....my son is a paperwork nightmare! Maybe this'll shake him up, but I hate to see him go thru this. It's my understanding he could be penalized as much as 45% if he can't recreate all of the papertrail? What is H&R's responsibility in all this?

[abezon]

H&R should send their EA to attend the audit with him. Has he notified them of the audit? However, H&R, like most preparers, does not audit its clients' books when preparing returns. They rely on the client telling them the truth. if he cannot sustain his deductions, they are not liable for a penny unless *they* told him how much to claim for charitable dedcutions. (or unless he bought that peace of mind insurance policy they sell where they pay everything if he loses the audit) Keeping track of his receipts is *his* job, not Block's. He might take his checkbook registers to substantiate some of the deductions.

I doubt the IRS would penalize him 45% for losing receipts, especially if he can recreate at least some of them.

On another note, why isn't your son asking these questions? He's not going to learn the paperwork lesson with you spending all this time trying to clean up his mess. If the IRS is only challenging the charitable deductions, there's probably not much money at stake. This is a perfect opportunity for him to pay a little 'tuition' to the university of life & drive home the need to keep records.