vpFREE2 Forums

IRS Audit Experience

#1

BG's excellent suggestions of an IRS audit is worth reading for any citizen!
I have been audited on two occasions. Each time I allowed the IRS to win
early on but made a very generous settlement (paid in increments per month to
fain inability to pay) with the (first) agent. My first experience was many
many years ago. It taught me to keep records via calendar, worksheet and
receipts. Personal records are not as likely to persuade them as receipts, canceled
checks, etc. but they are persuasive. For example the use of your car for
business purposes should be memorialized in calendar form, along with a trip
record in detail, gasoline receipts, mileage records, etc.

Each year the focus is on particular areas. I understand they are after
charity contributions for 2006. Generally speaking I receive receipts and
canceled checks for such. But I cleared out a library this year and intend on asking
the Friends of the Library to give me a letter. You can always get these
after the fact by brining in your receipts. Plus you may want to start taking a
digital photograph of items given to Good Will and other organizations if they
are of substantial value. Particularly if your gift exceeds the formula
donation for your income.

Good Luck! China

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#2

I think that filing a Schedule C to claim expenses as a professional is
an audit trigger. I got push-back from the IRS when I tried it and had
to file an amended 1040.

Here is my question for those who have been audited: what happens to
the copies of the W2G that the casino retains? Do they file them with
the IRS in the same way that employers file all of their W2s with the
Social Security Administration each year?

I received more than 200 W2Gs last year. There must be millions upon
millions issued annually. I can't believe that they are all being
input into some massive IRS database somewhere each year and then
matched up with what people claim as their winnings on their 1040.

When you were audited, did the Service seem to have their own
independent knowledge of W2Gs issued to you?

#3

Better start believing pollyanna. There is more than just W2G's in
that database:
http://www.gaming.nv.gov/documents/pdf/industry_ltr_131.pdf
http://www.fincen.gov/Casino_FAQs_Final.pdf
"Also, casinos should note that activities such as: (i) "turning off
the dollar counter" to prevent obtaining knowledge of reportable
transactions (i.e., not using the feature that is readily available in
its software program that accumulates U.S. dollars that a customer
inserts into a slot machine bill acceptor while using a magnetic slot
club account card), or (ii) requesting that a vendor remove a software
tool or interface capability from its next software upgrade could
result in enforcement action under the BSA."

ยทยทยท

--- In vpFREE@yahoogroups.com, "rgj21" <igtddb@...> wrote:

I received more than 200 W2Gs last year. There must be millions upon
millions issued annually. I can't believe that they are all being
input into some massive IRS database somewhere each year and then
matched up with what people claim as their winnings on their 1040.

#4

rgj21 wrote:

When you were audited, did the Service seem to have their own independent knowledge of W2Gs issued to you?

I've never been audited, but once I called IRS to have them read me their understanding of my 2003 taxes (before I filed), including all the information they have on file. They were able to read me the relevant info from each W2G I had received that year, including the casino name, the date, and the amount. It was all accurate, and comprehensive.

I presume the IRS person did not go to a big filing cabinet to find out this information.

Hope this helps!

Dave Decot