This January I met a new client who received a notice from the IRS with intent to levy their bank account in the amount of $160,000. Naturally, the threat of levy and an audit would be a scary experience for anyone. In this particular case, the penalties alone amounted to over $15,000. eeCPA, PLC saved this client $145,000, making this our most successful audit to date.
Here are some lessons to be learned from this audit:
· Make sure your company is organized properly. My client’s company was originally organized as a Sole Proprietorship, which was the wrong entity for her business. We reclassified her business as an S-Corp, which significantly reduced her taxes.
· Attention to detail. Be sure to track all your expenses, especially auto and home office expenses. When you track your expenses properly, you will be able to achieve greater savings. In this case, the former tax preparer failed to account for the client’s credit card expenses. That is why we need all of your statements for all accounts.
· Intent to levy= close your accounts. When a client receives a notice of intent to levy, panic is often the first reaction. When my client received the notice of intent to levy her account, I advised her to close her bank accounts immediately and open accounts at other banks. She followed the advice and avoided the levy.
· Make sure payroll expenses are accurately stated. My client’s payroll expenses were understated. That is why we always take the time to perform a reconciliation of all of our client’s payroll expenses. We automatically include the payroll reconciliation with our service, which you cannot find from any of our competitors.
· Use eecpa! If you are facing an audit, we can help you save significantly. In the case of this audit, we saved our client more than 10 times our fee!