Tax Services: How to handle and IRS Audit Letter in Scottsdale, Phoenix or Paradise Valley

Tax Services: How to handle and IRS Audit Letter in Scottsdale, Phoenix or Paradise Valley

(#21) You receive the IRS audit letter. What is the first question IRS will ask you for? Please call Jeffrey Brooks CPA at 602-292-2009 for questions or comments.

You get an IRS audit letter and your heart skips a beat! What one record receives special attention? What one record can create a nightmare for you?
What one record makes the IRS suspect that you are the keeper of lousy records? Auto log! Why is this document important to the IRS auditor? If the record is missing the IRS auditor knows that your other records probably are lacking, too.

This record, the one you probably hate keeping, is the mileage log on your vehicle or vehicles.

The IRS notes that a taxpayer’s failure to keep a mileage log on vehicles indicates that the you are taking business deductions for personal expenses.

As a CPA, I look at tax court cases as a guide to my advice to my clients. The Royster case, a February 2010 court case, Royster lost his 2003 mileage log and tried to reconstruct his business auto mileage. His error was that he did not show time, place of travel, and a business purpose.

IRS knows it cost a lot of money and time to come to your office and ask for records. I am seeing more correspondence audit asking these questions.

1. Copies of repair receipts and other records showing total mileage for the year.

2. Autos logbooks and other records to support business mileage claimed.

3. Appointment book or calendar of business activities for the year being audited.

4. Paid bills, invoices, and canceled checks or automobile expenses. These would include gas, oil, tires, repairs, insurance, interest, tags, taxes, parking fees.

The IRS is looking for a match of the repair bill odometer reading with the mileage in your logbook, a match of the inspection slip odometer reading with the mileage in your logbook, the mileage between repair stops to see if that ties in with your claimed mileage, and a business purpose that ties in with your appointment book or other calendar of business activities.

Your mileage log gives you the choice: get in and out of the IRS audit quickly, or pay your CPA a lot of extra money and extend your fear and agony of the audit.

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About Jeffrey Brooks

Jeffrey Brooks, CPA, CFP, MBA since 1976 has specialized in helping clients save significant taxes, help businesses increase their cash flow, revenues and profits while increasing their control and satisfaction. Jeff and his accounting firm sincerely cares about the happiness of his clients.

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JBrooks Wealth Advisors, PC.

Certified Public Accountant
Address: 4647 N 32nd Street, Suite B245
Phoenix, Arizona 85018
Phone: 602-292-2009