Mixed Insurance Banners Health Insurance for Visitors to USA

Announcement

Collapse
No announcement yet.

Help please - Audit letter from IRS

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Help please - Audit letter from IRS

    Hi

    I received an audit letter from IRS requesting me to provide documentary evidence for my itemized deduction for 2013,2014 financial years.I filed my tax return as 1040 US resident(per advice from my tax company whose help i used.). Please let me know if being on H1B, whether my tax accountant do the right thing by filing my return as a US resident? I have been continuously in the US from August 2010 - December 2013. I had to visit India for 18 days from December 30th 2013 - January 20th 2014. I came back to the US on January 21st 2014.

    The other documentary evidence requested was related to Business expenses mentioned in the scheduled itemized section for 2013 & 2014 tax years.

    The amounts in question are about 14k for 2013 and 12k for 2014.

    I do not have evidence to support the business expenses mentioned in my tax filing other than bank statements to show that i made transfers for my monthly expenses and phone bills. I never cared to take documentary evidence of my rental accommodations.I know that i made a stupid mistake of filing itemized deductions without thinking about consequences. What i am not sure is providing incomplete information to the IRS be a good idea? My employer has not agreeded to provide me any letter which says that they will reimburse business expenses. IRS has mentioned in the audit letter that without a business expense policy from my employer, they will disallow the itemized deductions for both the years in question.

    In this situation, please let me know how best can i face this situation. If anyone faced a similar situation, please let me know. i just want to be mentally ready for what is in store for me.

  • #2
    It's very likely that you will be faced with a disallowance of some (if not all) of your nonreimbursed business expenses. You can probably expect a tax bill for the two years' estimated tax liability.

    -Ray B

    Originally posted by spartianve View Post
    Hi

    I received an audit letter from IRS requesting me to provide documentary evidence for my itemized deduction for 2013,2014 financial years.I filed my tax return as 1040 US resident(per advice from my tax company whose help i used.). Please let me know if being on H1B, whether my tax accountant do the right thing by filing my return as a US resident? I have been continuously in the US from August 2010 - December 2013. I had to visit India for 18 days from December 30th 2013 - January 20th 2014. I came back to the US on January 21st 2014.

    The other documentary evidence requested was related to Business expenses mentioned in the scheduled itemized section for 2013 & 2014 tax years.

    The amounts in question are about 14k for 2013 and 12k for 2014.

    I do not have evidence to support the business expenses mentioned in my tax filing other than bank statements to show that i made transfers for my monthly expenses and phone bills. I never cared to take documentary evidence of my rental accommodations.I know that i made a stupid mistake of filing itemized deductions without thinking about consequences. What i am not sure is providing incomplete information to the IRS be a good idea? My employer has not agreeded to provide me any letter which says that they will reimburse business expenses. IRS has mentioned in the audit letter that without a business expense policy from my employer, they will disallow the itemized deductions for both the years in question.

    In this situation, please let me know how best can i face this situation. If anyone faced a similar situation, please let me know. i just want to be mentally ready for what is in store for me.

    Comment


    • #3
      Consult with a good tax consultant. A public forum is not a good place to get advice for answering an audit.

      In general, it is good practice to provide all the documentation that you can and a letter explaining everything.
      This is my opinion and not legal advice.

      Comment


      • #4
        There is a saying in the U.S.: "You don't mess with the I.R.S."

        This means that doing what you did in order to get tax deductions and pay less tax was not a good thing to do unless you have excellent documentation (receipts) of all items you said you paid out as a business expense.
        If not, the I.R.S. may request that you pay back taxes and possibly a penalty plus interest.

        If it is a small amount of money, pay it.
        If you have to hire an attorney to represent you, this can cost thousands.

        Try to find a low cost tax attorney to answer some questions for you if you are asked to pay a lot of money to the I.R.S.

        This is too complicated for a public forum.

        Good Luck and I hope that the amount is not much.

        Comment


        • #5
          I think that the other advice given on this topic here by the others is very sound!

          I went through a audit myself once, and was just open and honest about it all. Gave all my bank accounts info and explained how and what.

          Have you contacted the consultant or accountant that prepared the taxes for you? My accountant was present when they came in shifting through my paperwork and I had to pay some back taxes and a fine. You will be okay as long you are open and honest about what and how. If taxes where filed in error you just have to pay back taxes and most likely a fine, which I am sure you will be able to find a payment plan for if you need!

          Good luck!

          Comment

          {{modal[0].title}}

          X

          {{modal[0].content}}

          {{promo.content}}

          Working...
          X