Posted at 00:00hin IRS Audit, IRS Appeal, IRS Collections, IRS Examination, IRS Penalties, IRS Penalty and Interest AbatementbyJohn R. Dundon II
Questions Asked by the IRS in an Initial Interview Audit. The following is a sample set of questions the IRS uses when conducting an initial ‘interview’
Mandatory Statements/Questions by IRS:
- IRS Agent /Officer Name?
- Taxpayer Name?
- Audit Date/time?
- Do you have concerns regarding the audit process?
- I have enclosed a copy of Pub 1 and Notice 609, which was included with your Internal Revenue Service (IRS) appointment letter. We will now briefly review the examination process. The IRS will examine your tax records. If they propose any changes to your return, they will explain the reasons for the change. If you agree with the changes, they will discuss payment options at that time. If you do not agree with the changes, you have the right to a managers’ conference. If you still are not satisfied during the manager’s conference you will have the right to an appeals conference. Do you have any questions about this process?
- If the IRS needs to contact a third party for information, they will provide advance notice and a list of contacts to you.
- Do you have any other questions about the privacy act notice?
- Do you have any other questions about your appeal rights?
- Do you have any other questions about innocent spouse?
Background questions:
- Is the address on your tax return correct?
- Does your spouse live at the same address?
- What is your current telephone number?
- What is your education level?
- What is your Spouse’s education level?
- Where is your current place of employment?
Audit InterviewÂRequired filing checks:
- Have all required tax returns been filed?
- Have you filed an amended return for the tax year examined?
- Did you prepare the tax return?
- If not, who prepared it?
- Were they paid to prepare it?
- Have you been examined before?
- If so, what were the result?
- Have you received any correspondence from the IRS recently?
- Do you have any household employees?
Audit Interview Income Probe:
- How do you (and you spouse) earn a living?
- Has all income and or deductions been reported on the tax return?
- Are you aware of any changes that should be made to your?
- Do you have any hobbies?
- Do they generate income?
- If so, was such income reported on the tax return?
- If so, what type hobbies?
- Do you engage in any bartering activities?
- If so, what type?
- Did you have $10,000 or more cash transactions for this tax year?
- Who did you bank with during the tax year?
- Type of financial accounts:
- Do you have any foreign bank accounts?
- If so please, describe and identify foreign bank accounts.
- Do you have a safe deposit box?
- If so, describe the contents
- Do you keep cash and/or securities in another location besides a bank, financialÂinstitution or a safe deposit box?
- If so please describe?
- Do you keep money in a hidden location, such as buried in the back yard, in a safe, inÂthe freezer, mattress, wall, floor, etc?
- If so, describe approx. amount kept
- Did you have any non-taxable sources of income during the tax year
Audit Interview Other Sources of Funds Probe:
- Loan Proceeds?
- Repayments of a loan to you?
- Inheritance?
- Public Assistance?
- Assistance from family/friends?
- Life insurance from a death?
- Non-taxable interest?
- Gifts?
- Other?
- Did you receive any taxable sources of income?
- W-2?
- Rents?
- Interest?
- Dividends?
- Taxable Refunds?
- Alimony?
- Sales of Stocks/Bonds?
- Sales of Property?
- Business Income?
- Farm Income?
- Partnerships?
- Pension Distributions?
- Lottery (gambling)?
- Self-employment?
- Property Transactions?
- Prizes?
- Awards?
- Any other income?
- Do you have any foreign income, investments, or transactions?
- If so,Âplease describe?
Audit Interview:ÂSpecific Issues
- Schedule C – contact me for details
- Schedule D -Âcontact me for details
- Schedule E -Âcontact me for details
For more information on this contact me anytime at your convenience.
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As an expert in tax audits and IRS procedures, I've been deeply involved in tax consulting, assisting clients through IRS audits, appeals, collections, and examinations. My knowledge spans various aspects of tax law and IRS practices, ensuring compliance and resolving tax-related issues efficiently. I have assisted individuals and businesses with penalty abatement, addressing IRS inquiries, and navigating the intricacies of tax codes.
Regarding the IRS audit interview questions you've listed, these inquiries are standard procedures used by IRS agents during initial interviews. They cover a wide range of topics aimed at gathering comprehensive information about a taxpayer's financial situation. Here's an overview of concepts related to the questions mentioned:
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IRS Audit Process Overview: Explains the examination process, rights to appeal, and procedures in case of disagreements with proposed changes.
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Background Information: Covers basic details such as taxpayer and spouse's address, contact numbers, education levels, employment details, and household information.
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Required Filing Checks: Ensures all necessary tax returns have been filed, questions about amended returns, preparation of returns, previous examinations, recent IRS correspondence, and household employees.
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Income Probe: Inquires about sources of income, deductions, reporting accuracy, hobbies generating income, bartering activities, cash transactions, financial accounts (including foreign accounts), safe deposit boxes, and undisclosed cash or securities.
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Other Sources of Funds Probe: Investigates sources of funds such as loan proceeds, repayments, inheritances, public assistance, gifts, non-taxable interest, life insurance payouts, and other taxable and non-taxable income.
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Specific Issues: Refers to Schedule C (business income), Schedule D (capital gains and losses), and Schedule E (supplemental income and loss), indicating further details might be needed in these areas during the audit.
These questions cover a broad spectrum of financial aspects to ensure accurate reporting and compliance with tax laws. They aim to uncover discrepancies, unreported income, or potential areas of concern for further investigation.
If you're facing an IRS audit or examination, seeking professional assistance from a tax consultant or attorney who specializes in IRS matters can be crucial in navigating these inquiries and ensuring a smooth process while protecting your rights as a taxpayer.
