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IRS changed position after audit meeting

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dvnaparose

Junior Member
What is the name of your state? CA. We have been involved with the IRS on an audit of 2002 tax year. One of the possibilities all along has been that they would also look at 2001 and 2003. During our last meeting we were told that everything was done except for tying up some loose ends and finalizing the paperwork. They said they were not going to look at the other years after all. Needless to say, we were very happy to hear that. We just got a notice in the mail asking us to bring all paperwork for 2003 to our next meeting!!!! The statement we have from our last meeting doesn't mention other years at all. Do we have any recourse since they told us they weren't going to open other years and now they are. The revenue agent said it had to be approved by his manager, yet she initialed the notice from the last meeting. Any guidance you can give us would be greatly appreciated. Thank you.
 


abezon

Senior Member
Run-don't-walk to a tax attorney or enrolled agent. When the IRS starts expanding the scope of an audit to other years, you want to cut them off at the knees. What were you doing at an audit unrepresented anyway?
 

dvnaparose

Junior Member
Thank you for your response. We did have our tax preparer who is an EA candidate represent us at the audit. But he says the IRS told him that if there is more than $5000 unreported income - deposits in our personal account that don't match up with draws from business account - they are required to look at years immediately before and after. His take is that we are getting off easy because they only want to look at one year! Do you think he is being too gullible? Is there really anything he can do? Should we get someone else??
 

Snipes5

Senior Member
An EA "Candidate"? What exactly does that mean? Someone who has taken the test? If that's the case, this year's pass/fail letters haven't even gone out, and there certainly hasn't been any background check. Further, you are not protected by the "EA/Client privilege" that comes into force when someone is an EA. In addition, it is against IRS regulations to use the EA designation when you haven't been issued an Enrollment Card.

There is always something that can be done. Go find yourself a real EA, and ask to see the Enrollment Card, and even seek references. You want someone with Audit experience.

Snipes
 

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