Posts Tagged ‘audit’

Are automatic gratuities charged by restaurants tips or income?

  • January 23rd, 2018
  • David Greene
  • Comments Off on Are automatic gratuities charged by restaurants tips or income?

In a recent Fact Sheet (No. 2017-08) the IRS reiterated that mandatory service charges such as automatic gratuities charged for large dining parties and banquet event fees charged by the restaurant are income to the restaurant and not tips.  The…

How many different ways can the IRS try to collect taxes I owe?

  • December 12th, 2017
  • David Greene
  • Comments Off on How many different ways can the IRS try to collect taxes I owe?

This is a good question, but one that cannot be answered in a short space.  I will just discuss the primary methods. When one does not pay her taxes, she will first receive a friendly letter stating that she has…

Suggestions for Recovering Lost Financial Records

  • November 7th, 2017
  • David Greene
  • Comments Off on Suggestions for Recovering Lost Financial Records

Here are some suggestions for recovering your financial records if they are lost or destroyed in a hurricane or other natural disaster: (1) get a copy of your tax transcript from the IRS; (2) Request copies of records (bank statements,…

How can you prove expenses in an audit if you did not keep good records?

  • September 19th, 2017
  • David Greene
  • Comments Off on How can you prove expenses in an audit if you did not keep good records?

As you know, if you are audited  the IRS will not accept your word for income or expenses.  If they think you underreported income, they will go through all of your financial accounts and add deposits to determine income.  It…

What factors trigger a business audit?

  • June 6th, 2017
  • David Greene
  • Comments Off on What factors trigger a business audit?

There are two basic ways the IRS chooses a Form 941 Employment tax return to audit: 1. A computer program detects a return that has incorrect amounts or 2. Information from compliance projects (news media, public records, etc.) suggests the…

What Document Support Is Needed for Charitable Contributions

  • May 23rd, 2017
  • David Greene
  • Comments Off on What Document Support Is Needed for Charitable Contributions

Here are the rules for deducting charitable contributions and the supporting documents needed. Any contribution of $250.00 or more must be substantiated by a contemporaneous written receipt by the donee organization.  This receipt must state whether or not the donee…

What steps can you take to avoid an audit?

  • April 4th, 2017
  • David Greene
  • Comments Off on What steps can you take to avoid an audit?

There is nothing you can do to guarantee that you will never be audited.  However, by following three simple rules, you can minimize your chances of being audited and, if you are audited, minimize your chances of having to pay…

What are the most common mistakes made on a tax return?

  • March 7th, 2017
  • David Greene
  • Comments Off on What are the most common mistakes made on a tax return?

Here are the most common mistakes the IRS sees from self-prepared returns: (1) Math errors – be sure to check your math twice; (2) Misspelled name or changed name not updated (be sure the name on the return matches the…

Examples of stupid deductions that the IRS disallows

  • March 1st, 2017
  • David Greene
  • Comments Off on Examples of stupid deductions that the IRS disallows

Unfortunately the IRS is not lenient when you try to deduct expenses for which there is no valid reason.  Here are a few examples of deductions that have been tried and “shot down” by the IRS. (1) A real estate…

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