<p>I don’t see why you wouldn’t want an enrolled agent to be with you. They have experience in dealing with the IRS, and can give you a sense of comfort as well. The tax code is open for interpretation (which is why private letter rulings are so numerous) and having someone there does not make you look guilty, etc.
In my office, we had to fight the IRS on manythigs that we felt were cut and dry (morgage interest claims of divorced couples, logs for travel expenses for travelling nurses). In both cases, I felt the IRS agent (on the job only 2 years) was unreasonable in their stance. We won both cases, only after taking it through the formal process. </p>
<p>I don’t know what they can get from a face meeting. Cost basis is already noted in the attachment of the detailed transactions I provided with the return. The fees were broken down to portions yielding taxable earnings. It is really pretty straightforward. Two pages of summary tells it all. Why not hire someone? We may but it is all pretty simple. No complicated deductions. Earning are laid out plainly so are the deductions.</p>
<p>sryrstress - I’ll keep that in mind, just straight answer. Thank you.</p>
<p>I had a business audit one time. It revolved around 3 issues that were all quite complicated, but ended up involving a lot of money. I researching things more thoroughly, we realized that we had handled one issue improperly, admitted that, corrected the paperwork and aid the additional tax, penalty and interest. On the other two issues, we were clearly in the right and had the documentation to prove it. The first response I did involved attachments up to AK (ie. A, B, C, D, E…AA, AB, etc) Our accountant had done the taxes, so they represented us but I had to pull together all the paperwork. Both issues were resolved in our favor one level below tax court.</p>
<p>The reason I can think you might want a professional representing you is that they do this sort of thing regularly and speak the jargon of the IRS. You most likely could figure it out, but it would be rough to have a steep learning curve on your own tax audit!</p>
<p>I got all the paperwork ready. It looks good to me. We are going in a few days. They said taxpayer and/or spouse to come in for the appointment. Should we both show up? The return is joint.</p>
<p>The IRS is one of those organizations where I think that the less you say, the better and it’s usually easier to do that when only one person is there. Having two people there can result in conflicting answers and discussions between the two that the agent could hear. One person could be there and call the other person in private if some particular piece of information is needed.</p>
<p>Just to play devil’s advocate, though - sometimes it helps to have two sets of ears there and two brains at work. (Kind of like when you go see a specialist or some other medical professional; sometimes it’s nice to have someone else there so you can compare notes later.) </p>
<p>I was audited once, nearly 30 years ago - I was a GRAD student, of all things! (Like I had any extra money for the government.) It turned out to be messy and dragged on for years, and many times since then I wished I had dragged someone with me.</p>
<p>BCEagle is correct though - absolutely do NOT volunteer any information. If your spouse is a chatterbox, leave him/her alone.</p>
<p>A medical consult shouldn’t be adversarial though.</p>
<p>I don’t know if the IRS does this or not but we went through the immigration process many years ago and they took each of us into separate rooms and asked us a bunch of questions, presumably to compare answers to see if our answers were consistent. Hopefully the IRS folks are a lot less suspicious than the INS (that’s what it was called back then).</p>
<p>We used to get audited all the time. Our taxes are complicated. </p>
<p>Then, three years in a row, they owed us a lot of money. (We’ve never ended up owing them and they always owe us)…</p>
<p>This year our taxes were so complicated I was sure we’d be audited again, but nothing, nada. You’d be surprised how often, if you’re cautious, they actually end up owing you.</p>
<p>I have represented clients in audits for 14 years. The advice in post #19 by SRYRSTRESS is spot on. I will also add that you should not be a chatty cathy…just answer the questions asked succinctly. Don’t be afraid of silence. A typical mistake is to give in to the urge to babble in order to fill the empty space.</p>
<p>Thank you everyone for help. I had a successful meeting. I showed what I had. It basically settled it. Just wonder tho, does this mean we will be on their radar for sometime to come?</p>
<p>If you’re doing your returns correctly, and it sounds like you are, then I wouldn’t worry about getting audited in the future. It’s happened to me several times (paper only) - you do your best and deal with any errors if you have to.</p>
<p>It’s just that I am easily excitable. Incidents like this is stressful with or without something to fear. I could be proactive and provide more documents than called for so they can see for themselves.</p>