Preparation, personalities, professionalism are essential in preparing for an audit

Article Abstract:

The successful outcome of an IRS audit is dependent upon the preparation and professionalism of the taxpayers' representative, defensible positions, adequate documentation, and the interaction of personalities between the IRS auditor and the representative. Upon obtaining power of attorney from the taxpayer, the representative should call the IRS and try to ascertain the scope of the audit. Documentation is crucial and gives the representative credibility and will influence the outcome positively if there is enough information to support the taxpayer's position. It is essential for the representative to minimize the adversarial nature of the encounter with the auditor. IRS auditors use a concession list, and the representative should keep a record of what is agreed upon to keep concessions consistent and prevent the auditor from changing position.

Auditing

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Expansion costs often deductible, but delay can lose tax benefits

Article Abstract:

Expenses which are incurred as a result of a new company's growth are not always deductible as ordinary and necessary business expenses. Business expenses must be incurred while carrying on trade or business to be currently deductible. The start-up costs of companies deemed to be entering a new trade or business are not currently deductible. Electing to amortize ensures some tax benefits are realized. The period for amortizing start-up costs begins on the date that the actual business begins. For purposes of amortizing organizational expenditures, the tax courts and the Internal Revenue Service have interpreted that a business does not actually begin until operations begin.

Taxation, New business enterprises, Startups

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