Case Study: Internal Revenue Service

Topics: Taxation in the United States, Internal Revenue Service, Tax Pages: 3 (892 words) Published: October 28, 2014
1- Jonathan was notified by the IRS that he should appear at the local IRS district office with support for his 2013 travel and entertainment expenses as well as his charitable deductions. It was a really nice day, so Jonathan went skiing rather than to the appointment. On the way to the ski resort Jonathan called his tax preparer, Sue Johnson, CPA, and told her that he wasn’t going to the appointment. What penalty or penalties could Jonathan be subject to? What about the Sue Johnson, CPA?

Normally the Internal Revenue Service conducts audits to a significant percentage of taxpaying citizens each year, this audits are perform to verify certain variances within the tax law and codes. The individual being audited does have a burden on demonstrating to the IRS auditors that the information on their tax returns was accurate, that income was properly reported, and that tax credits and deductions were properly and legally taken.

In this case the taxpayer elected to not appear for the meeting because he wanted to go skiing rather than the preset appointment. In this case the best approach to IRS examination is to promptly and fully cooperate from the outset, it will show them a good faith. According to the scenario shown here he failure the appointment, and he didn’t contact to examiner office right away to re-schedule. He needs representation, whereby he should fill out and sign a form 2848, power of attorney and declaration of representative, authorizing the CPA to represent him before the IRS, which in this case would be Sue Johnson, CPA. He definitely would need to bring all supporting documentation to substantiate the deductions, relating to travel expenses, entertainment expenses, and charitable contributions.

Considering the travel expenses for tax purposes, travel expenses are the ordinary and necessary expenses incurred while traveling away from home for your business, profession, or job. It is considered that you are traveling away from home if...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about Dragonair service management case study
  • Harborside Health Center vs. Internal Revenue Service Essay
  • Tax Administration in Nigeria: a Case Study of Federal Inland Revenue Service(Firs) Essay
  • case study Essay
  • Case Study Essay
  • case study Essay
  • Essay on Case Study
  • Internal Control Case Study Essay

Become a StudyMode Member

Sign Up - It's Free