Somebody was asking me what my worst experience with an IRS audit was. I knew just the story to tell them.
My client was a realtor who had an audit where they needed to go downtown to the IRS offices. We had a Monday morning appointment at 8:30. I went to the clients offices on the Friday before and they gave me their summary sheets to review. Things looked reasonable, but they knew that they had a bit more work to do to clean up the files to attach to the summaries.
So I am in the IRS office at 8:15 and check in, the agent did not want to meet with me since I did not have the supporting documents. So 8:30 came and passed without my clients appearing. SO I am calling them up and when they finally answered and it was almost 9:00. They still needed to go to their office to pick up their records. I was speechless.
The drifted in and they were about an hour late for the audit.
Once we were allowed in, the agent could not locate my POA on file. So I needed to go get a paper one and fill it out before I could be part of the meeting.
SO the agent starts asking for the supporting documents for the line items being audited. My client pulls out only the summary sheets. They hand them over to the agent; she looks at the summaries and asks to see the back-up. The client looks blankly at the agent and then turns to me as if she had been speaking a foreign language. I explain that she is right fully looking for the invoices or bills to support the amounts on the summaries.
They then explain that the summaries are their only back-up. They may have invoices in one of the three boxes of shit they dragged with them. The agent looked at me, wanted to know what was wrong with my clients. I am again speechless.
So we are sitting there with them showing up late for the audit, having lied to me about having any back-up, thinking to myself “How soon can I fire these people?”
My clients were far from professional through this process. The IRS Agent was completely professional. She offered the client more time to pull their information together and the client was complaining that he had worked for over a month pulling together not a thing and he wanted his life back.
The agent was more than fair in making changes to the returns based upon how the clients behaved. They accepted the changes and were given a payment plan.
I never saw the client again. They still owe me money, hell they probably still owe the IRS money. After this experience, I have taken over full control over all future IRS audits. If the client complained about the costs, I let them know and put it in writing that based upon their decisions that they are on their own. I have never had one client ever balk about this, unlike this client.
I don’t really have a bad story about the IRS, they for the most part have been reasonable over the years. For me its knuckleheaded clients that make IRS audits bad experiences.