April Newsletter

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Pick Ups & Extensions The tax deadline is fast approaching.  We will be serving snacks and beverages on April 14th and 15th for any clients who want to stop by and help us celebrate another tax season close. If your tax return is done and ready to be picked up you are welcome to stop by anytime between 10:00 and 6:00 Monday thru Friday and 10:00 and 5:00 on Saturdays.  Other times can be arranged by appointment.  You can also pay by phone and have your forms mailed or emailed to you.  If you have not met with us or dropped off your tax information yet then we will need to put you on extension.  Please contact our office to give us permission to file your extension for you.          Where's My Refund? If you already filed your tax return and are due a refund, you have several options to check on your refund. You can find your IRS, Oregon, California and New York refund on our blog. You will need your blue folder as they will ask you specific questions. Office Hours & April 15th  We are wrapping up the full time office hours that we keep during our busy tax season.  The office will be closed from Tuesday, April 16th through Monday, April 28th. If you haven't completed your 2013 taxes with us yet and need an extension, please let us know.  All extensions and completed 2013 tax returns must be filed by April 15th. All tax is due on April 15th, whether or not you have filed a completed tax return, so if you think you may owe tax, please let us know that as well when filing your extension. If you receive any correspondence from the IRS, Oregon, the City of Portland, or any other entity regarding your taxes, please email it over right away to office@mbtaxpro.com , or fax it over to 503.282.0513.  Happy Spring!  1st Quarter Estimated Tax Payment Due  Your first quarter estimated tax payment is due on April 15th.  If you have any questions about this first payment please call or email the office at 503.595.5890 or office@mbtaxpro.com and we will do our best to help you.

April 9 - The Joyners in 3D signing with David Marquez and Tara Rhymes  David Marquez is the New York Times bestselling artist of Ultimate Comics Spider-Man, All-New X-Men and Fantastic Four: Season One, and made his comics debut with writer R.J. Ryan in 2010 with the graphic novel Syndrome. David is based in Portland, OR. Tara Rhymes earned her BFA at the University of Texas at Austin with a focus in Studio Art and Transmedia.  The Joyners in 3D markes her comics debut, co-developing the 3D process used in the book.  She lives and works in Portland, OR.    For more information, visit: floatingworldcomics.com/archives/2058

Important Dates     Apr 15th - 1st Quarter Estimated Tax Payment (2014 tax) Apr 15th - Individuals, Partnerships, LLCs DUE

How To Avoid and Survive an IRS Audit

Every year, the Internal Revenue Service examines (aka audits) a small percentage of U.S. tax returns to verify that the tax reported is correct. Both individual returns and corporate returns can be subject to an IRS audit.

What are my chances of being audited?

You are more likely to get struck by lightning. That may be an exaggeration, but the reality is that most taxpayers have only about a 1 percent chance of being audited by the IRS. If your annual income is more than $5 million, your chance of being audited goes up to 20 percent. Ironically, if you have no income, your chance of being audited is 3 percent.

The overall audit rate for business tax returns fell from 0.71 percent in 2012 to 0.61 percent in 2013, but audit rates are higher for small C-corps than for partnerships and S-corps. For small corporations (assets less than $10 million), the audit rate in 2013 was 0.95 percent.

Why would I get selected?

Being selected for an audit does not necessarily mean there is anything wrong with your return. The primary way the IRS selects taxpayers to be audited is through computer scoring, known as the Discriminant Inventory Function system (DIF). Your return is entered into the computer and assigned a numerical score based on a variety of factors. Audit “risk” factors include low gross profit margin, high deductions such as auto, travel and entertainment expenses, and little or no profit from business operations.

Additional factors that can trigger an audit include when taxable income on your return doesn’t match amounts reported on forms to the IRS (W-2, 1099), mathematical errors, charitable contributions disproportionate to your income, claiming the home office deduction, and complex business or investment transactions.

Are there different types of IRS audits?

There are three main types:

Correspondence audit: You mail in specific information requested by the IRS. This type of audit is the most common and least cumbersome.

Office audit: You take specific information requested by the IRS to their office.

Field audit: The IRS agent personally comes to your place of business. You are wise to have your attorney or accountant present for this meeting.

How can I survive an IRS audit?

First of all, don’t take it personally and don’t panic.

Next, seek professional advice if you feel you need it or want it (probably a good idea). You could ask a tax professional to look at the IRS notice and give you some suggestions. 

I had a client whose business underwent a correspondence audit. After we discussed the notice, she prepared schedules and documentation that she sent to us to review before mailing them to the IRS. She saved money on our preparation fees, but still felt confident in the information she was submitting.

Remember, you can postpone the audit if you need more time.

Here are some other tips:

• Don’t host the audit if you can avoid it. Instead, try to go to the IRS office, or have a tax professional handle it in their office.
• Only provide the information that they are requesting. Less is more!
• If you are missing receipts or documents, you are allowed to reconstruct records.
• Be organized and prepared. It gives you credibility if you can answer their questions and produce requested documents.
• Know your rights. Read IRS Publication 1, “Your Rights as a Taxpayer.”

How to know if it's a scam

It’s important to note that the IRS does not contact taxpayers via email, text messages or social media. If you receive an email from the IRS, it is a scam! If you have questions about any notifications you receive, you can contact the IRS directly via phone or in person at a local IRS office, or you can consult your accountant.

http://www.bizjournals.com/sacramento/how-to/growth-strategies/2014/04/how-to-avoid-and-survive-an-irs-audit.html?page=all

Lisa Kahn Grossman is an associate principal in the Entrepreneurial Services department of Kaufman Rossin. She works with entrepreneurs, high-net worth individuals, and nonprofits. She is a certified QuickBooks ProAdvisor, a licensed Certified Public Accountant in the State of Florida, and a member of both the American Institute of Certified Public Accountants and Florida Institute of Certified Public Accountants.