Archive for the ‘Bank Records’ Category
What? You Have Unreported Income?!
Friday, April 2nd, 2010
Check it out. The IRS efforts to nab unreported income represents the largest component of tax avoidance and tax fraud. Look out, because now the IRS has developed a new tool for identifying returns with a high probability of unreported income. If you hang around these tax lawyer blogs long enough you’ll probably hear of [...]
Are Off-Shore Credit Cards Legal Under IRS Law?
Friday, April 2nd, 2010
Well, yes. It is not illegal to have an offshore credit card. However, there is a good chance that some people are using offshore credit cards to avoid paying income taxes. After all, credit cards allow easy access to offshore funds and accounts in so-called tax-havens (Caymans, anyone?). These allow income to be hidden. U.S. [...]
LUQ: Large, Unusual, Questionable: Your Bank Records
Saturday, April 4th, 2009
What the IRS Does With Your Bank Records: Tax Audit Report #3
A third step often involved in the review of your bank records during your tax audit is for the IRS audit to proceed with a review of your monthly bank statements. The monthly bank statements are studied to:
1. Help understand the frequency and normal [...]
Reconciliation of Bank Records: Tax Audit Report #2
Saturday, April 4th, 2009
What the IRS Does With Your Bank Records: Tax Audit Report #2
The first step the IRS audit guidelines require of an IRS tax auditor when he or she is reviewing your bank records is to do what’s called a bank account reconciliation. In doing the bank account reconciliation the IRS tax auditor will review the [...]
Your Bank Records: Tax Audit Report #1
Saturday, April 4th, 2009
What the IRS Does With Your Bank Records: Tax Audit Report #1
Bank records are what the IRS calls third party source documents. IRS audits almost always ask to see your bank records. The bank records presumably support your financial records. They provide an audit trail for transactions sometimes undisclosed in your books and records.
The IRS [...]
What the IRS Does With Your Bank Records: Tax Audit Report #4
Friday, April 3rd, 2009
What the IRS Does With Your Bank Records: Tax Audit Report #4
Here’s an obvious one when the IRS audits your small business. Let’s say you deposit most of the money from sales or from your customers in a single bank account. You can be sure that the IRS audit will proceed with a reconciliation of [...]