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View Full Version : Life Getting audited.... this sucks


Braincase
06-17-2009, 04:35 PM
Home office related. I know the rules. As a trainer, I spend 30-50% of my work time per month working in my home. I have received clients into my home, had corporate deliveries to my home. When I have prep weeks, I prep in my home to increase my productivity (I'd spend 10-15 hours a week just driving from my home office to Leawood). I've also consulted and worked for Microsoft based out of this office to the tune of around $3 grand a year. I keep my home office equipped with multiple systems configured in a network and various VLANS in support of my career. I maintain internet access in support of my career, as well as that of my wife. I regularly give out my cell number to clients. There is no phone in the Topeka office, so if there is a need to contact me or another student, my cell phone is the point of contact. I have used my vehicle to drive to onsight locations, and non-work locations to do work related research and customer support.

I've claimed my office, and the mileage when I've used my personal vehicle to travel between my home office and the Leawood office. No the IRS says I owe 7k, 5k in taxes, 2k in interest & penalties.

You guys know how this goes. If I can't prove my case this year, next thing that happens is that they go after every other year, and then the state jumps in on top.

I believe I'm OK. Meeting with clients, having deliveries, and spending so much time here should justify my claim, but I'm scared sh!tless.

Advice is welcome.

Pestilence
06-17-2009, 04:35 PM
Guess you're not going to Hawaii.......

Braincase
06-17-2009, 04:38 PM
Guess you're not going to Hawaii.......

We've already paid for everything, so we might as well go. I've got all the reports coming in, and we have 30 days. I'll be busy when we get back, though.

Buehler445
06-17-2009, 04:48 PM
Do you have a CPA? This is the time that they are not horridly overpaid.

My boss is a CPA and she had her parents audited (she does their taxes). She did some research and really hammered on the auditor.

What she told me that I thought was interesting was that they always find something. They HAVE to find something. I thought that was a little shady.

To anyone else that has claimed their home as a deduction, be wary. They may be coming after you next. They choose who they audit on a risk-based analysis. So they have probably identified home office deductions as a high risk area.
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Stewie
06-17-2009, 04:50 PM
You could do like the metallurgist we had as a semi-employee. He was from California and our plant in Lenexa was his "office." He was meticulous about keeping receipts, but not very orderly. He was audited and they showed up for said audit. When asked to show them his records he pointed to a huge box of papers, receipts, etc., and said "go through them and prove I'm not precise in my calculations." He was ballsy and waiting for a fight. They were there a couple of days and left. He paid no more than he already had paid. This was in the late '80s. The jackasses now will probably hang you buy the nuts if you'd pull something like that.

Buehler445
06-17-2009, 04:57 PM
You could do like the metallurgist we had as a semi-employee. He was from California and our plant in Lenexa was his "office." He was meticulous about keeping receipts, but not very orderly. He was audited and they showed up for said audit. When asked to show them his records he pointed to a huge box of papers, receipts, etc., and said "go through them and prove I'm not precise in my calculations." He was ballsy and waiting for a fight. They were there a couple of days and left. He paid no more than he already had paid. This was in the late '80s. The jackasses now will probably hang you buy the nuts if you'd pull something like that.

ROFL. Like that chick in stranger than fiction.

My boss would say, "get to work. You have a deadline".
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cdcox
06-17-2009, 05:04 PM
I'm pretty sure you have to use that space 100% exclusively for business purposes. If you put a cat litter box in that room, it's not an office as far as the IRS is concerned.

Also, this:

"Different rules apply to claiming the home office deduction if you are an employee. For example, the regular and exclusive business use must be for the convenience of your employer."

Good luck. You have to be really careful when claiming a home office, which is probably what flagged the audit.

Scorp
06-17-2009, 05:19 PM
I am thinking you should "Vacation" in a country that doesn't extradite, and send the IRS a post card. ROFL

SLAG
06-17-2009, 05:33 PM
I didn't know you were into Scientology

philfree
06-17-2009, 05:59 PM
I don't know but it would seem to me that if you have an office location other then your home you might have a hard time selling the home office to the IRS. Can one have both? Maybe your employer should be reimbursing some of your expenses and then writing them off on his tax return?


PhilFree:arrow:

alanm
06-17-2009, 06:15 PM
Tell them your on the Timothy Geitner tax schedule.

wild1
06-17-2009, 06:24 PM
See if you can get yourself nominated for a cabinet post. Then you can repay it years later without the interest and penalties, and without any possible criminal repercussions.

wild1
06-17-2009, 06:25 PM
Tell them your on the Timothy Geitner tax schedule.

That's what I get for not reading to the bottom. :shake:

KCFalcon59
06-17-2009, 07:08 PM
Buy some guns and barricade yourself in your house and tell the IRS to get fucked. Thieving bastards.

Braincase
06-17-2009, 07:33 PM
I don't know but it would seem to me that if you have an office location other then your home you might have a hard time selling the home office to the IRS. Can one have both? Maybe your employer should be reimbursing some of your expenses and then writing them off on his tax return?


PhilFree:arrow:

Thing is I'm right between the Topeka and Lawrence offices. My house is frequently used as a depot for books over the weekend, when we need to move books from Leawood to Topeka.

I do believe that constitutes a convenience for my employer. That and the fact that because I can do my prep work here rather than spend 15-20 hours a week behind a windshield when I have to prep probably increases my productivity.

I also have work-related shipments from Microsoft and other vendors delivered to my home office probably helps me out.

googlegoogle
06-17-2009, 07:37 PM
the income tax system and the gestapo irs are all bullsh**

Scorp
06-17-2009, 07:38 PM
the income tax system and the gestapo irs are all bullsh**

Who let this genius in here with that username?

cdcox
06-17-2009, 09:14 PM
Thing is I'm right between the Topeka and Lawrence offices. My house is frequently used as a depot for books over the weekend, when we need to move books from Leawood to Topeka.

I do believe that constitutes a convenience for my employer. That and the fact that because I can do my prep work here rather than spend 15-20 hours a week behind a windshield when I have to prep probably increases my productivity.

I also have work-related shipments from Microsoft and other vendors delivered to my home office probably helps me out.

I'd see if you can talk your boss into writing you a memo about how the company benefits from your home office.

Braincase
06-17-2009, 09:21 PM
I'd see if you can talk your boss into writing you a memo about how the company benefits from your home office.

I'm way ahead of you. One of our VP's has his JD. I think Ted will help me out.

cdcox
06-17-2009, 09:40 PM
I'm way ahead of you. One of our VP's has his JD. I think Ted will help me out.

:thumb:

Get a little sign with the company's name on it to hang your your mail box.

Put a special lock on the door to your home office, and comment to the IRS auditor when you enter, "I had to put this on a few years ago when my daughter did her science project in here. I wasn't able to claim a home office deduction that year."

Tell the auditor that your wife has this dirty secretary fantasy, and you're wondering if you act it out for her -- you know, for her birth day -- if that will invalidate your deduction.

Schedule a delivery of about 12 pallets of junk during the scheduled auditor visit.