Video instructions and help with filling out and completing Form 843 Audits

Instructions and Help about Form 843 Audits

Three reasons why CPAs must avoid IRS audit representation cash is wonderful cash is king and every one of your clients values the commodity that is cash we know that for some cash may be difficult to account having significant cash inflow can create lots of dilemmas to a business among the concerns is whether that business climbed properly accurately and completely reports all of its cash revenues and tax returns now every accountant and every attorney knows that some business owners may be tempted to unfairly report their cash receipts and so begins the IRS audit IRS tax audit of business with significant amounts of cash is extremely specialized most attorneys wisely avoid handling these engagements they find this area of representation to be too technical with all the accounting principles the auditors inquiry begins with a survey of the business tax return changes in the balance sheet cash t-account analysis and other traditional accounting tools and methods but wise CPAs in tax accountants also try to avoid these audits because of the great exposure to professional malpractice why first an experienced tax accountant especially the CPA is familiar with the professional risks involved in this representation representing to governmental authorities the facts of mishandled cash can renard our legal consequences upon the client yes you could actually make that con situation worse at best unreported cash revenues results in additional tax plus there's a routine assessment of the IRC 6662 penalty this penalty equals an additional 20% of the tax but there is much more at risk here there's also the possibility of fraud committed by the business client a person commits tax fraud when he/she or the business intentionally provides false information on a tax return in order to pay less tax and for any person determined to be fraudulent that 20% penalty is replaced with the IRC 66-63 fraud penalty which equals 75 percent of the tax the earlier description defines civil tax fraud but any conduct done willfully which is different from intentionally gives rise to the commission of criminal tax fraud by the way aside from the 75 percent penalty criminal fraud is often rewarded with time in prison second the CPA offers no buffer of legal protection or privileged attorney-client communications and the CPA is not responsible for knowing the hidden legal pitfalls within the criminal tax laws the tax return preparer is therefore not the best representative for the tax audit and finally the return preparer may be an unwilling participant in past fraud by creating and filing that tax document in that common instance the tax return preparer could be required as part of the representation to disclose his or her own records and even oral statements against the clients interests obviously this result is also not in the clients best interests the very best choice for representations is to engage an attorney with a tax accounting background the attorney must be knowledgeable of procedures and a part four of the Internal Revenue manual for best results the attorney should be hired before allowing anyone to be interviewed by the IRS this recommended sequence allows the team to have better control over what information is shared with the IRS people important the CPA avoids risks of how client information is shared with the IRS CPAs and tax accountants be smart when clients tell you they're under audit by the IRS they want your help they want your guidance refer them to a qualified tax defense attorney and protect yourself from the unknown tax law offices eight four four two eight seven one oh five three stop IRS problem calm