An IRS audit is torture for even the most organized taxpayers. John (Cucamonga, CA) was a more typical, less-than-organized taxpayer who had come out of a 2009 audit with a balance of $11,638.23. There were a few expenses that were being questioned by the IRS at the time of the audit. Blue Tax needed to make sure that the IRS did not assess him the incorrect amount.

The Blue Tax team's goal was to correct the expenses presented in the IRS audit. Our Audit specialist interviewed John and created a business profile outlining his daily activities. Next, she gathered bank statements, receipts, and invoices, matching those with the expenses claimed on the return. She found some expenses were actually more than what was claimed. She then used the extra expenses to compensate for categories where the proof was less than claimed.

In February of 2012, the Blue Tax Audit Specialist presented John's case in court to an assigned IRS Audit Officer. The Audit Specialist argued that the expenses were ordinary and necessary, and that the proof was sufficient. Blue Tax worked with the client to reconstruct some missing records and draft a statement about why we were unable to produce those records. The Audit Officer accepted the explanation, commenting that it was unusually well-written and organized.

In March of 2012, the IRS reported that the initial balance due of $11,638 had been reduced to a zero balance and all and Blue Tax's arguments and substantiations were accepted. Plus they would not open two additional years for audit as was originally recommended. With a reduced balance from $11,638 to zero, and a cancellation of the audits from the other years, John concluded that his investment in Blue Tax saved him a great deal of time, stress, and money! TOP