IRS Financial Reporting Suffers from Serious Internal Control Issues.

The GAO (Government Accountability Office) has reported, with an obvious sense of irony, that the IRS financial statement process is in need of work. According to the GAO report “serious internal control and financial management systems deficiencies continued to make it necessary for the IRS to rely on resource-intensive compensating processes to prepare its financial statements.” Moreover, the internal controls used by the IRS do not give sufficient assurances that losses, misstatements, and noncompliance with the law would be prevented or detected on a timely basis.

What this means is that the IRS is spending extra manpower, time and taxpayer dollars to make sure that its financial statements are correct. While the GAO noted a number of strides the IRS has made to update the process, the outdated and obsolete systems used “could have serious implications on [the GAO’s] ability to determine whether IRS’s financial statements are fairly stated.”

Friday's Tax Quote.

“Taxation is, in fact, the most difficult function of government and that against which their citizens are most apt to be refractory.”

- Thomas Jefferson

A Trip Through the IRS Audit, Appeals and Court Procedures

When dealing with an IRS audit, my clients often ask: What is the IRS going to do?  What happens next?  What happens if we don't agree with the position that the IRS is taking?

Certainly, some IRS procedures are counter intuitive and can be confusing.  However, the movement of a case from the start of an audit, through appeals and into the court system does not have to be confusing.  At least not if you have the flow chart below.  I have had this flow chart for years.  It was handed down to me by someone who said that it came from an old IRS publication.  Whether it is old doesn't matter, because it is still accurate and clearly explains how a case moves through the audit/appeals/court process.

So, if you are currently going through an audit and what to know what happens next or how far you can challenge the case, look at the flow chart below. 

Veteran's Day

On November 11, 1918, an Armistice was signed bringing an official end to World War I. This Armistice Day concluded an unfortunate chapter in world history with peace. Sadly, the peace did not last. Following World War II, Armistice Day was renamed Veteran’s Day to honor all U.S. Veterans that have served in the Armed Forces.

It is on this day that we honor their service and have the opportunity to say thank you. So…Thank you.

*photo courtesy of Meghan Arnold - accidentalwisconsinite.blogspot.com

Choosing the Right Representative to Help with Your Tax Problems

Choosing the right person to help you sort out the tax problems that you or your business is facing shouldn't be as hard as solving the tax issue itself.  Navigating the sea of tax professionals can, however, be tricky.  To help people sort through some of these issues, I have recently written a guest post for the Tax Guy blog.  The post, aptly titled "Choosing the Right Representative to Help You with Your Federal Tax Problems", is part of a series by the Tax Guy he prepared on choosing tax professionals in a variety of situations from return preparation to tax controversies.  The discussion on the topic can be found by clicking here.