Domingo:
The loss is the loss. The examiner can deny a deduction or classification of an asset, etc..
The denial of the deduction would/can change the outcome of the loss. It simply stated either has merit as a deduction or does not. The next question would be... Is this the only item the examiner has? It is my understanding that an audit can be done for the current year, or current year-1, current year-2. If any questions or concerns arise, then they are allowed to go back additional years for a maximum of 7 (statue of limitations). If the filing is in error, you have the responsiblitiy to prove it is correct. If you disagree with the decision you may always appeal. Not won to often. (the examiner won't dare jeopardize his job, he/she are Gov't for crying out loud.) The IRS as a whole WILL work with you if you deal with them. At this point, I am sure you have already contracted an expert involved on your behalf. If you have not, CALL ONE. the 300-600 it will cost you will be money well spent. Just remember the irs are just people and they too make mistakes.
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Submitted 353 days ago...
Tax liabilities for small business started with taxable dollars
A small business (consulting practice) is started
The first year shows a loss
The second, 3rd and 4th years show a profit
The IRS wants to disallow deduction for the first year loss (schedule C) even though taxes are paid for each profitable year hence...
How can an effective defense be provided in this case? The IRS has evidence of payment made in the subsequent (and profitable) years... However, the examiner appears to be a bit unmovable in this case... Is there a precedent or simple reference that could be provided in this case?
domingo
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Submitted 238 days ago...
Answer 2 / 2
Submitted 177 days ago...
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