I was working with a client who was under an IRS audit, the day before the audit and thet were showing me the summary sheets of the expenses that were being questioned by the service.
They were small realtors with a Schedule C with their 1040.
So, I am talking to them about the summary sheets making sure that they have the corresponding back-up and that it all matches what I was given for the tax return. The back-up materials were not with them when we met, but I was assured that all was in good order.
Things were looking to be in decent shape. They even stated that they had the mileage logs that covered the extensive miles that they claimed they drove that year, for business purposes.
The next morning, I was in the IRS waiting room waiting for the client to show. I called them several times, and neither were answering their cell phones. I called the auditor and let her know I was there, but my clients have yet to arrive and they have the back-up documents.
They finally showed up over an hour late.
When we finally got in front of the auditor, she couldn’t locate the POA I had sent her beforehand. I had to leave and to go to the entrance to get a fresh form to fill out.
They had no excuse for being late, other than apparently to piss off the IRS agent.
Then the fun began.
They had no back-up documents for any of the summary sheets expenses, expecting those summary sheets to be back-up to the expenses.
I was furious that they had done nothing but lied to me, when I asked to see the back-up they stated that they had them but not with them when we met.
The IRS auditor was even more furious than I was. They requested a settlement and the IRS officer granted one that under the circumstances was a generous gift.
I fired those clients, that day and never saw a nickel for the time I spent with them.