IRS Audit Yesterday

[epiphany]

Well that was fun. Nothing like just paying off your lawyer to file for bankruptcy and getting ready to do the paperwork and finding out that the IRS is auditing both your 2005 and 2006 tax years due to your eBay business.

So my paperwork is still not done, even though the lawyer was paid off 5 weeks ago, I ABSOLUTELY have to get that done as I have been sued and a default judgement could happen any day. My lawyer advised me not to respond to the summons, he said it was a waste of money. I told him that I was worried about my wages being garnished and he said that I was about 4 months away from that happening..that was over a month ago. I sure hope he's right.

Anyway...the audit is done and drumroll please....I owe 30.00! The only thing they dinged me on was taking 100 percent of my internet usage for 2005, which they chopped in half. I can't fricking believe it and am SO pleased to know that I have been doing everything right. I can't tell you how much stress that was on top of the BK and the lawsuit.

What, me worry? No stress here.

ep

[JRScott]

Glad the audit did good

Your lawyer is probably right in your area.

Here, they have to serve you with a summons to verify bill. You have 30 days here to respond after being served. Due to mail they'll wait another 2 weeks to make sure its not in the mail. Then they'll go back to the court and seek a default judgement. That takes another couple weeks. Then the discovery phase of the court comes, that takes about a month etc. So yeah it can take several months depending on jurisdiction (though some can do it in weeks, I'm sure your lawyer is up on local rules though )

[epiphany]

Glad the audit did good

Your lawyer is probably right in your area.

Here, they have to serve you with a summons to verify bill. You have 30 days here to respond after being served. Due to mail they'll wait another 2 weeks to make sure its not in the mail. Then they'll go back to the court and seek a default judgement. That takes another couple weeks. Then the discovery phase of the court comes, that takes about a month etc. So yeah it can take several months depending on jurisdiction (though some can do it in weeks, I'm sure your lawyer is up on local rules though )

Thanks JR, that really does make me feel better. I know I keep saying I am going to get my BK paperwork in, but crap just keeps hitting me..that IRS audit documentation was a complete pain in the ass to come up with...they wanted everything under the sun...I have to complete my BK paperwork this weekend...I just have to!

It's been a little over 30 days since I was served. I was served in person at my home with no fanfare. I can view the case online because I received something from a mediation agency seeking my business about the case..so I knew I was being served before it happened....this included the case number and the court it was filed at, which was actually a good thing. I can see that they filed, and then filed a notice that they served me, and I will be able to see when and if they get a default judgement too.

I did receive something about a week ago from the law firm asking me to call them and settle before they seek a default so am wondering how long they would wait for a reply before doing so.


Can't wait for that automatic stay,
ep

[CindyLou]

The IRS audit thing freaks me out. I didn't itemize my taxes for 2007 but I did for 2005, 2006....and I wonder if my tax guy didn't go a little too far on my deductions. I can't wait for the 3 year mark to pass, though I have until 2010 to wait because I didn't file 05 taxes until 07!

Epiphany, how did your audit come about and when were you notified of the audit?

[epiphany]

The IRS audit thing freaks me out. I didn't itemize my taxes for 2007 but I did for 2005, 2006....and I wonder if my tax guy didn't go a little too far on my deductions. I can't wait for the 3 year mark to pass, though I have until 2010 to wait because I didn't file 05 taxes until 07!

Epiphany, how did your audit come about and when were you notified of the audit?

Well I don't know how it came about. I asked and the agent said that she thought it was random...but I have heard that they don't do more than one year if it is random so I dunno. I was notified in the beginning of May and had 10 days to schedule an appt. Then my appt was a little more than a month out so had about 45 days to come up with the enormous amount of documentation that they wanted, some of it she didn't even look at.

My notification did say they were only focusing on my schedule C profit and loss from business. I had a small loss in both those years, and she questioned my ability to be profitable. I pointed out to her that I had made a profit in 2007. She looked it up on her computer to verify and was satisfied with that.

I think I was just part of their campaign to crack down on eBay sellers but who knows. One thing I did find interesting is that when I called to schedule the appointment, she asked me if it would be possible to send her copies of my returns (which I did) because all she had was data sheets with figures on them which did not tell her what any of the individual deductions were for.

ep