Though my personal taxes have never been audited, I've helped my father through four or five audits of his sole proprietorship business in the past.
What generally saved my father was his view of what should and should not be deductible. Often, he would deduct things that were off limits, but failed to deduct things he legitimately could because he thought they shouldn't be deductible.
In all, he generally owed nothing, but had to file amended returns.
My personal favorite is when the state audited his sales tax returns. They were afraid that he hadn't been collecting sales tax on the four or five $5 pickup loads per week of sawdust he was selling to individuals.
This audit resulted in my reading the 'fine print' of the state's sales tax regulations and finding that he'd been paying sales tax for electricity used to run his sawmill when it was exempt as a part of the manufacturing process.
This resulted in a $10,000 refund of state sales taxes. And a very irritated auditor.
You'll do fine, but it will no doubt be an undeserved hassle.
2 comments:
Come on, AVI. Normal people don't give that much money to those organizations! Prove it!
Though my personal taxes have never been audited, I've helped my father through four or five audits of his sole proprietorship business in the past.
What generally saved my father was his view of what should and should not be deductible. Often, he would deduct things that were off limits, but failed to deduct things he legitimately could because he thought they shouldn't be deductible.
In all, he generally owed nothing, but had to file amended returns.
My personal favorite is when the state audited his sales tax returns. They were afraid that he hadn't been collecting sales tax on the four or five $5 pickup loads per week of sawdust he was selling to individuals.
This audit resulted in my reading the 'fine print' of the state's sales tax regulations and finding that he'd been paying sales tax for electricity used to run his sawmill when it was exempt as a part of the manufacturing process.
This resulted in a $10,000 refund of state sales taxes. And a very irritated auditor.
You'll do fine, but it will no doubt be an undeserved hassle.
Post a Comment