# Have You Ever Been Audited? Finally! A Poll!



## pateacher1326 (Mar 26, 2017)

I don’t think anyone’s done a poll. Hopefully this puts to rest how often it happens.


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## Amsoil Uber Connect (Jan 14, 2015)

Yes , but not for RS.


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## Bork_Bork_Bork (May 20, 2019)

*Twice......it's always a few years later.....lol. They have 7, I believe.*


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## Mash Ghasem (Jan 12, 2020)

No, but I've designed a handful of different audit forms for a client's nursing business 🤭


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## pateacher1326 (Mar 26, 2017)

Bork_Bork_Bork said:


> *Twice......it's always a few years later.....lol. They have 7, I believe.*


Did they press charges? Or did you win?


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## Seamus (Jun 21, 2018)

Four times, not fun. Between regular job, businesses, investments and stock sales I guess they have a lot to look at! :thumbup:


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## Bork_Bork_Bork (May 20, 2019)

No charges, 1st time was in my favor, 2nd time resulted in me writing a check for thousands. I had the ability to pay, had I not, I am sure (they said) that I’d have been charged.


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## Fusion_LUser (Jan 3, 2020)

We never had a full on audit but did get a letter from the California FTB over moving an IRA from one bank to another. I didn't have time to do it via a bank transfer so I withdrew the money and then immediately deposited all of it in the new account. The FTB accepted my explanation and did not force me to pay the early withdrawal tax and penalty.


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## Seamus (Jun 21, 2018)

pateacher1326 said:


> Did they press charges? Or did you win?


Unless you are Biiiiig time or they want you on something else but can't get it, there is not a criminal charge for Tax Evasion utilized. It's not usually win or lose but an agreed upon settlement.

For the average person, they will receive a letter either:

Notifying you of a discrepancy in their view of what you owe and a proposal to pay a new amount (or reduction in refund). At that point you can agree and pay or dispute. If you dispute you can propose a lesser amount if you owe and explain a basis for your amount.
You may be asked to provide additional information or documentation to submit. For example, in the case of Ubering you may receive a letter asking you to submit a mileage log to justify your mileage deduction. Failure to provide what they request will result in a disallowance of the expense/deduction and you'll get another letter notifying you what you must pay.
For the average person submitting personal tax returns, 90% of audits are done thru the mail. An in person audit for a personal return would be very rare. Usually that's for Businesses, very wealthy, or suspected criminal organizations. Whatever the outcome or final determination, you are always entitled to your day in court. That is a special civil administrative court and can get expensive as to have any chance of "winning" you'll need a tax attorney most likely.


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## Stevie The magic Unicorn (Apr 3, 2018)

Bork_Bork_Bork said:


> No charges, 1st time was in my favor, 2nd time resulted in me writing a check for thousands. I had the ability to pay, had I not, I am sure (they said) that I'd have been charged.


As long as you kiss ass play stupid and agree to a payment plan and stick to it they usually don't charge unless it's really criminal.

There's errors and mistakes, Versus fraud.

Fraud (criminal charges) would come down to really stupid criminal things while filing your taxes. Falsifying documents, not reporting cash income, ect.

I know someone who got charged with fraud. On paper he spent 3 years operating at a loss and not reporting any cash, _as a taxi driver_.

"So you expect the IRS to believe you operated for 3 years losing money consistently and had zero cash revenue? What kind of idiot..."

Obviously that idiot...


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## Another Uber Driver (May 27, 2015)

As @Seamus correctly indicates, most of the time, you get a letter asking for specifics of this or that line item.

The thing to remember about dealing with the Internal Revenue is that you document _EVERYTHING_. It is even better if not only do you document everything, but also you document the documentation and document the documenting of the documentation. If you go in there with your ducks in a row and well organised, on a bad day, the Internal Revenue Man might flip through it just to make it look good before he evicts you from his office. Many times, if he sees that you are well organised, he simply will evict you from his office. He is not going to spend too much time on you if he is not going to make at most a few hundred dollars off you. What he wants to see is some guy who walks in there with records thrown into trash bags, shoe boxes and stuffed into notebooks and paper is falling out as he walks into the office. Another thing that he likes to see is no records.

If he sees the last two, dollar signs light up in his eyes and he already is planning his Cancun vacation with his promotion money.

I keep records and receipts. I have two credit cards that I use ONLY for the cab and UberX/Lyft car.

For the cab, we must have trip sheets. If I pay some money for the cab, I use the credit card, get my receipt and staple it to the trip sheet.. I record the expense on the trip sheet. I have daily and running totals for each type of expense. At the end of the month, I add up everything and write it on the inside of the file folder for that month. As already I must write down the fare for each trip, I add those up at the end of the day. I note daily and running totals. I write the tip for each job and keep the same totals. At the end of the month, I note the total tip figures for that month on the inside of the file folder. Finally, I note start and end mileage on the trip sheet. I note non-business miles. I note the running total of business and non-business miles. At the end of the month, I note those totals on the inside of the file folder. This leaves me twelve sets of figures to add up in January and give the year's totals to my accountant. I staple the appropriate credit card statements to the inside of the file folder as well as the appropriate bank statements. I highlight the line on the bank statement where I paid the credit cards.

For the Uber/Lyft car, I have a notebook. I do note only the dropoff times and payoffs rather than pick up time, pick up point, drop-off point as regulation requires for the cab. I still note the beginning and end mileage and keep track of non-business miles. I note expenses every day and staple the receipts to that day's notebook page. I keep both daily and running totals. At the end of the month, I note the month's totals on a notebook page.

I have everything documented with the actual receipts. I have the receipts documented with the credit card statements. I have the credit card statements documented with the bank statements.

For credit card payments on the cab, I have the 1099 from the processor. I do note the meter readings at the beginning and end of each year. Thus, there is a way to check my cash reporting, although they can not verify or deny the tips. The Internal Revenue Man must take my word on those. As he will see consistent and regular documentation, he is more likely to take my word on that.

If you have everything in a row, the Internal Revenue Man is going to boot you out of his office quickly. I do not kn ow about any of you, but, for my part, if there is one place out of which I want to be thrown, it is the Internal Revenue Man's office. In reality, all that you need is receipts, but, if you have several layers of documentation, you let him know that you are about your game.

I have an accountant prepare my taxes.



Bork_Bork_Bork said:


> *Twice......it's always a few years later.....lol. They have 7, I believe.*


That seven year limit may still be in effect, but, there is little that they can do after about three years. Since Bush Forty-One, there own rules do not allow them even to question a deduction three years after it is taken. This is the result of his "Kinder, Gentler Internal Revenue". Despite this, an audit usually does pop up a year or two after you filed the return.


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## UberTaxPro (Oct 3, 2014)

Seamus said:


> Unless you are Biiiiig time or they want you on something else but can't get it, there is not a criminal charge for Tax Evasion utilized. It's not usually win or lose but an agreed upon settlement.
> 
> For the average person, they will receive a letter either:
> 
> ...


Also, responding to IRS notices on time is important to maintaining your rights under the law. Ignoring those letters is not a strategy even if you don't have money to pay any tax owed. Tax Court & Federal Courts are available for taxpayers but most issues are resolved within the IRS administrative hearings. In fact, when you apply to tax court you're sent back to the IRS for one more chance at resolving the issue administratively at the IRS Appeals Office, a separate part of the IRS, that will review your case independently from your first IRS review. There's plenty of remedy available but if you ignore notices and don't respond timely you'll loose rights under the law.


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## Another Uber Driver (May 27, 2015)

UberTaxPro said:


> Also, responding to IRS notices on time is important to maintaining your rights under the law. Ignoring those letters is not a strategy even if you don't have money to pay any tax owed.


Thank you, @UberTaxPro for that important reminder. All thanks and honour to @UberTaxPro for all of the tax advice that he has given to the posters on this forum over the past six years.


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