IRS Audit Help
We all know the last thing we want to endure is an INTERNAL REVENUE SERVICE AUDIT.
What if you knew in advance?
If you knew you were going to be audited up to six months in advance, that knowledge would allow you the opportunity to get all of your documents in order so when the audit occurs you would be prepared. Further, if you know in advance that you're going to be audited, it can help reduce costs to an Enrolled Agent (usually an accountant or attorney). You would be able to prepare for the audit even before you receive the notice from the Internal Revenue Service.
Here's how it works
The Internal Revenue Service audits approximately 2% to 3% of all the individual tax returns submitted every year. There are approximately 130 million tax returns submitted by individuals annually. This means about 4 million tax returns are audited each year by the Internal Revenue Service. YOU COULD BE ONE OF THOSE PEOPLE THAT ARE SELECTED FOR THIS AUDIT.
Types of Audits
There are many ways the Internal Revenue Service determines if an audit is going to occur on your tax return. Some of them are as follows:
1. The Differential Income Factor (DIF) Method
Each tax return that is submitted to the Internal Revenue Service is given a score based on the amount of income you report and the deductions you claim on your tax return. If the score your tax return receives exceeds a particular threshold for your income, then the Internal Revenue Service could select your return for audit. For instance, if you earn approximately $50,000 and you have medical expenses in excess of $7,000, this would give you a higher DIF score than someone who has medical expenses of only $4,000.
Further, if you report home mortgage interest of approximately $15,000 and your income is $35,000 then your DIF score is higher than someone with the same income showing only $7,000 in home mortgage interest. The higher the expenses relative to the income, the higher the DIF score.
2. The Information Returns Factor Method
All W2s and 1099s are submitted to the Internal Revenue Service every year. Then the Internal Revenue Service records the social security numbers from these documents and matches them to the social security numbers on the tax returns that are submitted. If you have received a 1099 INT (Interest Income) showing $1,000 from a bank or credit union but only report $500 worth of interest income on your tax return, the Internal Revenue Service will catch this. They will match the 1099 INT against your tax return, based on your social security number, and they will see that you underreported your interest income by $500. This will select your tax return for audit.
3. The Random Selection Method
All tax returns are submitted into a computer random number generator. The tax returns with the high DIF scores and non-matched information are taken out. A certain number of tax returns are picked at random to make sure the needed four million tax returns are audited on an annual basis.
These are some of the methods the Internal Revenue Service uses to determine who is being audited. Once these tax returns are selected for audit, they are assigned to Internal Revenue Agents and Revenue Officers. This is known as assigning cases or inventory to the auditor.
Find out what the IRS knows about you
When your tax return is selected for audit, it is given a certain transaction code (TC). The code identifies it as being selected for audit. Each of us who submits tax returns to the Internal Revenue Service has a record that is kept by the IRS for many years. These records are known as our INDIVIDUAL MASTER FILE (IMF).
Since 1974 the Freedom of Information Act has allowed us to access this IMF. The IMF will give information on a computer generated report about each taxpayer the IRS has on record. For instance, if you have been selected for audit, the IMF will tell you. It will also tell you if your tax return has been received by the IRS, if additional taxes have been assessed, and what the final collection date is for the tax return and many other codes that are interrupted from the IMF.
Since cases (inventory) are assigned to agents up to six months before the taxpayer is even notified of an audit, a copy of your IMF, can tell you whether or not your tax return has been selected for audit.
Get a copy of your IMF
We at Robert F. Hockensmith, P.C. would like to offer you, at a minimal cost of $39.95, a complete IMF package. This will show you how to request, under the Freedom of Information Act, an Individual Master File or Business Master File plus instructions on how to read the codes that are submitted to you with this Master File.
We have an entire package that we will send to you which will include a sample Freedom of Information Act Master File request, instructions, and information for preparing your own request. Plus, an example IMF and tips for analyzing your IMF along with the IRS document 5576, which helps you decode your Master File, will also be included.
All this for the low price of $39.95! What a small price to pay for peace of mind.
Contact us today to order our IMF package.
Submit your request today and have peace of mind knowing whether or not you have been selected for audit. DO IT TODAY!
You could be the next taxpayer selected for an Internal Revenue Service Audit.
If you get a notice from the IRS, contact us immediately
If you receive a notice from the IRS, don't ignore it. You can rest assured that the IRS will not just go away. All contacts by the IRS should be handled promptly. Unless you are an accomplished IRS "fighter", you would be wise to seek the professional assistance of our firm from the very first correspondence.
If you are contacted by any government agency concerning your tax matters, your first call should be to us. We will take care of it so that you can get on with your business.
"Robert Hockensmith, has been our consultant and CPA for over twenty years. He is a proven professional in his field of consulting, and tax/accounting. Bob has provided us with excellent service and guidance in the area of finances, and because of Bob's vast knowledge in tax accounting, we have avoided many pitfalls over these past twenty years. We are now retired, and enjoying the fruits of our financial plan that was developed with Bob and his organization. My wife and I highly recommend Bob and his firm to anyone seeking excellent advice in the area of finances and taxes. We have confidence that if you engage Mr. Hockensmith you will enjoy the peace of mind we have over the years."
Anthony J. and Gail L. D'Amico
"Robert has been my personal and company accountant for a great number of years. He has proven to be exceptionally focused on providing top quality work in a timely manner. Robert has always been available to handle any of my accounting needs and frequently offers advise and help with financial planning. Robert is truly a very trustworthy and dedicated professional. I would highly recommend him to anyone."
Richard C.
"When I first contacted Robert I was having serious financial problems with the IRS. Robert fixed the problems and saved me a very large amount of money. For the past twenty plus years Robert has completed both my personal, business, state, and federal tax returns in a very professional manner. I have been very pleased with his expert knowledge and integrity in his service to me and my family."
Donald C.
"Robert has handled my personal and business finances, tax accounting, wills, and investment accounts for approximately 20 years. I highly recommend him and his firm. Thank you Bob for all you have done and I look forward to a continued business relationship."
Harold T.
"My wife and I highly recommend Bob and his firm to anyone seeking excellent advice in the area of finances and taxes. We have confidence that if you engage Mr. Hockensmith you will enjoy the peace of mind we have over the years."
Anthony D.
"I have seen 1st hand the impact that Bob has had on his students. Top notch. Thoughtful. Caring. Great instructor!"
Lee K.,
Faculty, University of Phoenix
"Robert engages his students to explore the current business environment through a variety of accounting and business topics. Students develop critical thinking, analytical skills and are encouraged to excel in their educational pursuits. Robert is also a wonderful business resource for his peers."
Christine C.,
Accounting/Business Facilitator, University of Phoenix
"Always on time, accurate and excellent outcomes"
Shawn M. B.,
"I assisted Bob Hockensmith's clients with their mortgage needs. Bob always dug deep to locate ways he could best assist his customers, save them money, and provide them with the best services available. ?Bob always took a genuine personal approach when assessing his clients needs or locating outside vendors to provide needed services. He was thorough in his job duties, diligent in his research and caring of his clientele."
Rick I.,
Branch Manager, CRT Mortgage & Consulting, LLC
"Robert has been a valuable asset to our company for many years. His uncompromising approach in helping us to manage our corporate books has been a major factor in our success."
Steven B.,
"Bob constantly looks for ways to improve himself. He's a lifelong learner always looking for areas to grow as well as teach others from his experience. He's excelled in so many areas of his life both professionally and personally. While I joke to him that he's an "over-achiever", the truth of the matter is I'm jealous that I'm not as disciplined and detail-oriented as he is."
Dianna G.,
Public Affairs Specialist, Federal Emergency Management Agency
"I have worked with Robert for about 4 years now. During that time he has demonstrated a high level of integrity. He has high energy and is able to get projects done quickly with the cooperation of his staff."
Willy Korp,
President and Consultant, Korp Consulting, Inc.
"Robert is a quick study on any incident. He managed a new, young workforce on disaster response in Missouri last summer. He was able to provide excellent training and development for the workers assigned in his area and he coordinated effort well with other demands for workforce deployment. Robert is also becoming conversant with newer social media efforts to link and communicate with field personnel. I would be glad to work with Mr. Hockensmith again this season."
Thomas K.,
PIO, Yellowstone National Park
"I have the great pleasure of working with Robert at Best Life. His insight, planning and execution on projects are unmatched. With his expertise Robert has increased Best Life's profitability in a very short time. Robert has also been influential in helping Best Life obtain financing previously unavailable to Best Life."
Paul F.,
COO, Best Life PharmaNaturals
"Robert is a great leader. He "models the way" in both his words and actions. He "inspires others to act" through great motivational skills and utilization of situational direction. Furthermore, his strengths in the emotional Intelligence competencies make him a great relationship builder."
Keith A.,
Instructor II, FedEx Ground
"When I first contacted Robert I was having serious financial problems with the IRS. Robert fixed the problems and saved me a very large amount of money. For the past twenty plus years Robert has completed both my personal, business, state, and federal tax returns in a very professional manner. I have been very pleased with his expert knowledge and integrity in his service to me and my family."
Donald C.,
"Robert has provided tax preparation and advice to me and my family for many, many years. He has tremendous background and expertise and through his help my faimly has significantly imporved its tax planning. Robert and I have also over the years developed a friendship and we enjoy catching up when we get together. I would recommend him highly to anyone seeing any type of tax service."
Duckworth C.,
"I have known Mr. Hockensmith for well over 15 years and have provide IT support and services for his business as well as for his home. Mr. Hockensmith has always maintained a high level of professionalism throughout of relationship. He has an appreciation for technology and the benefits it provides for his clients as well as for himself. My friends and clients have hired Mr. Hockensmith for his services and have all been impressed with the amount of knowledge and dedication he has in his field of work."
Joe D.,
Owner, COI Computers
"Robert is the type of individual who has a high set of standards and values and is someone who I trust. He is a person you can rely on and put your faith in. He is a respected business person and trusted CPA. I could go on and on about the quality of his character. Need I say more! Like attracts like and he's my kind of person."
Rick E.,
Owner, Yoli Inc
"Robert has been my personal and company accountant for a great number of years. He has proven to be exceptionally focused on providing top quality work in a timely manner. Robert has always been available to handle any of my accounting needs and frequently offers advise and help with financial planning. Robert is truly a very trustworthy and dedicated professional. It is unfortunate that I was limited in choosing only 3 attributes because Robert possesses all of the attributes on the list. I would highly recommend him to anyone."
Richard C.,
"I have known Robert and have been his client for the past 20 years. He has various attributes but the most important to me is that he is a good listener. I have felt very safe putting my financial life in his hands. He is very knowledgable and keeps up with current affairs regarding the constant change in the tax code. The highest recommendation I can give him is that I have referred multiple clients to him and his firm and continue to do so."
Cruz F.,
"Bob is 'scary smart' regarding all matters tax and accounting related. We have referred many people to him and have had a long standing business relationship. He has helped us grow our business over the years. Saying he is a 'tax expert' is not overstating his qualifications."
Sherry A.,
"Bob has been my tax and financial advisor for 23 years. He is a true professional. He is always available to answer questions and provide advice, as needed. I highly recommend Bob Hockensmith."
Carlos A.,
"I have used Robert Hockensmith for many years. He knows his business and has always provided insightful input in addressing the needs of my business as well as my personal tax and accounting needs. I HIGHLY recommend him with no hesitation whatsoever."
Richard B.,
"I have relied on Robert for many years to provide me with sound, reasonable financial/tax advice. He has either saved me money, or helped me make money with his advice on how best to manage my finances."
Marie B.,
Bob is a long time business and personal client of our bank that I have assisted over the years"
Paul F.,
Store Manager, Wells Fargo Bank
"Robert is the consummate professional, with a high level of financial expertise who has given my client timely and accurate strategic information and input in developing the business model and infrastructure. Robert has been able to execute and deliver on various internal and external projects by optimizing resources and motivating employees. He has also been a trusted advisor at the highest level of the organization. I highly recommend Robert as he has done an outstanding job as CFO. He goes above and beyond expectations."
Matt E.,
"Robert has handled my personal and business finances, tax accounting, wills, and investment accounts for approximately 20 years. I highly recommend him and his firm. Thank you Bob for all you have done and I look forward to a continued business relationship."
Harold T.,
"I've worked with Bob for over a decade as both a soldier and now as a business owner. Bob's capabilities as a leader and manager are exceptional. I have the utmost confidence in his abilities and highly recommend him to anyone."
RD A.,
Colonel, USArmy
"Robert is a highly intelligent person who commanded his military organization like a well oiled business. I recommended him for a difficult command and within two years he led this organization to the top of their game."
Robert B.,
Lieutenant Colonel, Army National Guard
"Bob has given sound tax advice and has been critical in resolving issues with the IRS on at least two occasions. His knowledge of tax law is solid and he has saved me thousands of dollars in taxes over the past 6 years. Having known him through the National Guard, I can say his work ethic and integrity pervade his approach to life in all respects."
Harry R.,
"Bob is a perfectionist at EVERYTHING he does and very talented at what he does w/ ALOT of experience. I have been in the field foe over 20 years and he would be one that I would go to if I couldn't find the answer on my own. ENOUGH SAID! "
Henry T T.,
Owner, HENRY T TRUSHEL, CPA, PC
"Very professional accountants for the last 10 years or more "
Haydee G.
Superior Sofa Factory
"[Tax prep] was good from start to finish."
James R.
"Tax preparation and financial management [at TaxQuest] is excellent. [I] have used the services for several years."
Vicki R.
"[Bob] and his staff are very nice to work with and very professional. He takes the time to really explain the causes of the new (and old) tax laws."
Joan and Eric S.
"[They are] very professional accountants for the last 10 years or more."
Haydee G.
