Anyone ever been audited ?

[MrMoo]

I don't know if I've really been "audited". Nothing on any of the documentation they sent me said I was being audited. They simply sent me a letter saying they think I owed them ~$2000. If I didn't pay it, then they'd investigate me. I paid it. The interest wasn't that bad. Even with the 3-4 years they waited to send me the notice.

[*TT*]

[ QUOTE ]
I don't know if I've really been "audited". Nothing on any of the documentation they sent me said I was being audited. They simply sent me a letter saying they think I owed them ~$2000. If I didn't pay it, then they'd investigate me. I paid it. The interest wasn't that bad. Even with the 3-4 years they waited to send me the notice.

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thats stage one of an audit.

TT [img]/images/graemlins/club.gif[/img]

[bav]

[ QUOTE ]
They simply sent me a letter saying they think I owed them ~$2000. If I didn't pay it, then they'd investigate me. I paid it. The interest wasn't that bad. Even with the 3-4 years they waited to send me the notice.

[/ QUOTE ]

That's pretty common and usually harmless (in my limited experience). Almost everybody I know who has other than a trivial return ends up with such a letter at some point. That's what happens when you forget to include the income from a W2G, 1099INT, 1099DIV, 1099S, etc. Or when your broker reports stock sales that you don't put on Schedule D. I've gotten about 3 of these in the last 15 years. I just paid the $100, or whatever, of missed tax plus penalty plus interest and they went away happy.

One year I had $99 of dividends and $99 of qualified dividends. Because they were identical, I missed that I had a total of $198 of dividends and only reported $99. They wanted their share of that extra $99.

One year I missed one stock sale. I basically broke even on it, but my heart stopped for a couple seconds when I skipped to the bottom of the IRS letter that said I owed 'em another few $K. Once I figured out what they were bitching about, turns out I owed them nothing. They assume a cost basis of 0 if you don't report the cost basis for a stock sale.

And one year I got a revised 1099 after I'd already filed my return...I didn't file an amended return and yeah, about 10 months later came the letter saying "yo...the 1099 we got says $300 and you reported $200".

I worry a little that because I keep having these tiny errors every few years they're gonna decide I'm worthy of an audit--kinda like if I can't keep track of the little things maybe they'll figure I'm not doing such a hot job on the big stuff. I hope they don't really track such things, and all the amounts in question have been very small. So I just trundle on with fingers crossed. I'm not AFRAID of an audit, 'cause I do my taxes as legally as I know how, but trying to pull together the paperwork to support the values on the tax return would suck.

[kevstreet]

Is there a statute of limitations for how long the IRS can go back in years to audit?

[GoingBusto]

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Is there a statute of limitations for how long the IRS can go back in years to audit?

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Normally 3 years. However, if they determine there is fraud involved, there is no limit to what they can reopen.

I have been auditted. They called me (and sent a letter) to setup a time to come to my home. Then they faxed a list of all the accounts and information from my return they wanted to see. I prepared it all, answered the questions confidently and (more importantly) honestly, and they were gone after a couple of days.

Letter came a couple months later that they were making no changes to the return and accepting as filed.

If you do not know what you're doing, hire a tax attorney (NOT a cpa) to help you through an audit. Good luck.

GB