Tuesday, January 16, 2018
Business

What if you get audited?

The April 15 tax deadline is now receding in our collective rear view mirror, unless, of course, you are audited by the Internal Revenue Service.

In general, the likelihood of being audited is low. But audits have been on the rise in recent years as the IRS tries to boost revenue, said Bill Smith, managing director at CBIZ MHM, a national accounting and consulting firm.

There are several different kinds of audits, Smith said.

Correspondence audits are conducted by mail, and generally relate to a specific item on your return, or small dollar amounts. With a "desk" audit, you may have to go to an IRS office and meet with a revenue agent. An "office" audit, in which the IRS comes to you, is generally just done for businesses.

Typically, you'll learn your return has been selected for an audit when you receive an "information document request" in the mail. The request will specify what documents the agency is requesting and will state the deadlines for providing them.

Smith said if you haven't been working with a tax professional, you might want to retain one if you have been selected for audit. Even if the issue raised in the audit is relatively simple, and you have all the relevant documentation requested, there are procedural hurdles and deadlines that must be met to help things go smoothly.

"Be honest about whether it makes sense to hire a professional," he said. If you've prepared your own return, and the agency is making a simple request for, say, receipts for a charitable deduction — and you know you have them — it may be fine to handle it on your own. But if the amount in question is large, or the tax issue complex, think hard before handling it yourself.

"What you don't want to do is go in, make mistakes, get a giant bill from the IRS and then contact a professional to say, 'Get me out of this,' " he said.

For help in finding an accountant or a tax lawyer, some professional organizations have tools that let you search by ZIP code: The American Institute of Certified Public Accountants and the National Association of Tax Professionals are two of them.

If you respond to the letter on your own, make sure your documents are in order — no receipts in shoe boxes — and submit only as much information as is needed to answer the request.

If you have taken an aggressive, but defensible, position on a tax issue, make sure you are prepared to make your argument.

If you provide the requested information and the IRS decides to impose a "deficiency," or an amount owed, you have options. You can agree with the finding, at which point the agency will assess the deficiency and collect it.

If you disagree, you usually have 30 days to protest. You'll then have a conference with the appeals office within the IRS, which is supposed to act in a nonpartisan way to consider your appeal.

If the agency still thinks the money is owed, you can again disagree, which will usually set off a "90-day" letter, or a statutory notice of deficiency. You'll then have 90 days to file a petition with the United States Tax Court.

If you want to consider tax court, he said, weigh the cost of legal representation with the amount the agency says you owe. If amount is manageable — say, the IRS says you owe $1,500 — you can try to fight on your own, since hiring a good tax lawyer may well cost $1,500 or more.

One bit of good news: Excepting cases of outright fraud, being audited doesn't increase your chances of future scrutiny, Smith said. There is no "naughty" list.

Comments
Help wanted: Seminole Hard Rock in Tampa has 250 jobs to fill

Help wanted: Seminole Hard Rock in Tampa has 250 jobs to fill

TAMPA — Seminole Hard Rock Hotel & Casino is holding a hiring event next week to fill more than 250 positions. The event will take place in the Hard Rock Cafe from 9 a.m. to 1 p.m. Jan. 24. Available positions include culinary, beverage, hotel, spa, ...
Published: 01/16/18
Airbus could abandon A380 superjumbo amid lackluster sales

Airbus could abandon A380 superjumbo amid lackluster sales

New York TimesThe days may be numbered for the world’s largest passenger aircraft.Airbus, the European aerospace group that makes the A380 superjumbo, said Monday that it would have to end production of the plane if its only major customer, Emirates,...
Published: 01/15/18
The closing of 63 Sam’s Club stores has big implications for small business

The closing of 63 Sam’s Club stores has big implications for small business

Special To The Washington PostLast week, Walmart announced that it would be closing 63 of its under-performing Sam’s Club stores at various locations throughout the country, including a South Tampa location.PREVIOUS COVERAGE: South Tampa Sam’s Club i...
Published: 01/15/18
Brawny pickups, futuristic SUVs star at Detroit auto show

Brawny pickups, futuristic SUVs star at Detroit auto show

Associated PressDETROIT — It’s the year of the pickup truck at the 2018 North American International Auto Show in Detroit as General Motors, Fiat Chrysler and Ford unveil new trucks in a fast-growing and highly competitive U.S. auto market. Fiat Chry...
Published: 01/15/18
2017 still a deadly year for Tampa Bay pedestrians, bicyclists

2017 still a deadly year for Tampa Bay pedestrians, bicyclists

Another year gone, another year that Tampa Bay was one of the most dangerous places in the country for those walking or riding their bikes.More than 100 people were killed walking in Hillsborough, Pinellas and Pasco counties in 2017, according to sta...
Published: 01/15/18
If Florida’s offshore oil rush ever happens, only one side of the state is likely to see it

If Florida’s offshore oil rush ever happens, only one side of the state is likely to see it

The offshore drilling rigs that pepper the central Gulf of Mexico off Louisiana and Texas tap some of the nation’s richest oil and natural gas reserves.That proven and profitable productivity is why the energy industry has pushed for decades to open ...
Published: 01/14/18
Large crowds grab deals as Sam’s Club prepares to close South Tampa location

Large crowds grab deals as Sam’s Club prepares to close South Tampa location

TAMPA — Large crowds have gathered to snap up some deals before the Sam’s Club in South Tampa closes its doors for good on Jan. 27.On Thursday, the retailer announced it was closing dozens of stores, including a location at 5135 S Dale Mabry Highway...
Published: 01/13/18
For the first time, the 3 best-selling beers in America are light beers. Can craft brewers catch up?

For the first time, the 3 best-selling beers in America are light beers. Can craft brewers catch up?

Is it time for the King of Beers to hand over its crown?Preliminary analysis of national 2017 beer sales indicates that, for the first time in decades, Budweiser is no longer one of the top three beer brands sold in the United States. Bud Light, whic...
Published: 01/13/18
Valley National launches ‘Pop-Up Moments’ campaign for Tampa Bay nonprofits

Valley National launches ‘Pop-Up Moments’ campaign for Tampa Bay nonprofits

Leaders from Valley National Bank/USAmeriBank surprised the students of two local schools, Ybor City’s Academy Prep, 1407 E Columbus Drive, and St. Peter Claver Catholic School, 1401 N Governor St., with donations of much-needed supplies. This happen...
Published: 01/12/18
Updated: 01/14/18
Lottery winner minefields: Financial planning, emotions, relationships

Lottery winner minefields: Financial planning, emotions, relationships

The biggest challenge for lottery winners isn’t the massive sum of money suddenly dropped into their lap — it’s everything else that comes with it. "They’re going to be pulled in a lot of different directions," Steve Athanass...
Published: 01/12/18
Updated: 01/13/18