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Getting audited for the first time and last hopefully

I have basic general questions about my audit. I am a w2 sales person full

time and also have a start up premium travel company so I travel about 12 weeks a year and fly around the world staying in hotels and creating contracts with hotels, airlines, and tours for my customers. I want to know how to file an audit extension and what documents to include to the irs audit. I have all my flight receipts and hotel receipts. A lot of my business is done in Thailand where there's no receipts and everything is paid with cash so I don't know how to submit for meals in that case. Any advice would be awesome. Tax audit app wants to charge me $1100 to represent me for the audit. I'm not sure if that's a good idea or if I can easily do this myself.

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2 Replies

Getting audited for the first time and last hopefully

If you have an actual face to face audit then paying someone to get you ready to face the auditor  is wise and having someone go in your place is even better.  It is always better to not go to the audit yourself (or at least not alone) because in your nervousness you will talk too much and dig your own grave.  But you will have to decide what is best for you.

 

But if you want to try then be ORGANIZED to a fault  and bring everything you might need to support all the figures on the return especially if they are questioning  the Sch C on your return.  https://www.araglegal.com/individuals/learning-center/topics/budget-and-finance/prepare-for-a-tax-au...

 

Then speak only when asked a direct question and only answer that one question with short direct answers and/or hand them the information they request.   The more organized you are and the faster you are to hand over the info the better.  Bring IRS code references with you to support your figures or how you calculated something.    If you don't have something with you tell them you will need to get that for them later or just be honest and tell them you don't have the information ... don't BS or try to be cute/funny just be honest. 

 

Do NOT offer any more info than what is specifically asked for and do NOT fill the silence with extra words... remember the first one to break the silence usually wins.  

 

Also remember to the agent it is just a job and they are human ... they don't want to be confrontational but they have been trained in "interrogation" technics to get information out of you  so be measured with your words.  Take a minute to think about the question or ask for it to be repeated.  Breath and think about your answer before you speak and most of all  be polite but don't try to make friends with them ... that will be your own undoing.  

 

 

Getting audited for the first time and last hopefully

"A lot of my business is done in Thailand where there are no receipts and everything is paid with cash so I don't know how to submit for meals in that case." receipts are what the IRS would want and that's exactly what you don't have. the IRS could throw out every undocumented expense, pay a pro, they know how to negotiate with an auditor but it is still likely you'll be getting a tax bill from the IRS. 

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