Harlan Lunsford wrote:

- quote -

Harlan, I appreciate your compliment, but I insist my job in
many years of IRS first-line management was actually not all
that difficult! ;-)

- quote -

Orig poster "Tim" I feel probably acted correctly. Furnish
a copy of 1040, directly to IRS if little perceived
jeopardy, and which IRS has a 99% of retrieving the
original. But not through a 3rd party w/o a need to know;
no way.

- quote -

Not really, nor that likely from what's been posted, so
let's not worry the orig poster! In usual examinations, IRS
examiners are typically neither that devious nor clever,
especially at the early stages of an IRS audit. It may have
been a routine request for all S/H 1040', though as I've
stated, inappropriate of a person in an obvious position to
not be in possession of a given t/p's 1040. No harm no foul
from IRS view in some IRS places (but not my place), as we
see here a predictable t/p reaction!

However, anything relating to poster's 1040 [such as
relating to a S/H suit against the corp] as or as not not
relating to any tax deficiency of the corporation would be a
thorny disclosure problem as to the corp, until it may reach
the IRS litigation process in Tax Court on the corp. Thence,
you're under federal court subpoena, and you best comply.
Hardly the normal course in IRS audits, though.

So what IRS attempts to do, to avoid all this expensive
legal stuff, is develop any tax issue independently of
what's obtained from other people's tax returns or mere
communications for that matter, unless a pure 3rd party,
though "hints" can sure help. Hence, IRS' natural desire to
promptly see paper copies of "related returns" to facilitate
any audit of anybody, a goal of the Service to minimize t/p
[here a corp] burden.

Fred F.

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- quote -

Again we are indebted to Fred for an explanation of what an
agent may or may not do and what the rights of the taxpayer,
in this case a minority shareholder, are. Your commentary
is always on point.

But all's NOT well that ends well, since time just got back
to us saying he talked with the agent who will send him a
request and he will send him a copy of the 1040.

Note that since the agent couldn't comment on why, he did
say he would send Tim a request. Did he do this just to
cast off any inquiries from Tim? Is Tim really in trouble?
How will the corporate audit turn out?

As the world turns,......

ChEAr$,
Harlan Lunsford, EA n LA

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- quote -

Actually, Harlan, the current Internal Revenue Manual at
irs.gov is fairly clear that a related return requiring
"inspection" would not be an unrelated, minority S/H who is
not an officer, nor transacted in any known way with the
corp and which transaction has audit potential. However, a
minority S/H would not know the scope of the IRS audit of
the corp, and if he/she were to try to discuss the request
for copy with the examiner, the examiner could not say much
because of a) disclosure, and b) any discussion of anything
relating to the S/H return constitutes an audit for which a
report must be issued. They don't like issuing a no-change
letter for mere reason of a telephone discussion.

One objection I can see is if there's something on the
printed copy which may look like it really warrants
examination. If we just fail to supply a copy, the agent may
be satisfied with looking at the computer summary of the
1040, which may lesser hint at perceived audit potential.

Fred F.

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"TxSrv" <n3_eu[at]comcast.net> wrote:
- quote -

I called the agent doing the audit. He is mailing me a
request for copies, and will make sure no one else sees
them.

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TxSrv wrote:

(snipped....)
- quote -

As a matter of principle, Fred, I must disagree. If a
person is not under audit, as in this case, he has every
right to refuse and should do so. After all, in this case of
a corporate audit, he doesn't have a dog in this fight.

ChEAr$,
Harlan

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- quote -

I stand by the my position that the return should not pass
through the hands of a hostile intermediary (The
Corporation).

Whether it be oral, informal written or summons; the request
should be from the agent to the share
holder/employee/officer or his appointed rep.

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Bob Sandler wrote:

- quote -

Simple computer lookup can match it, but if it didn't match,
it shouldn't be suspicious. Math error changes if made can
be tracked down, if examiner for some reason desires. Or
simply, the TurboTax copy t/p retained ain't the one sent in
or e-filed after numerous tweaks.

Fred F.

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Taxmanhog wrote:

- quote -

It may be of interest that such a summons should not be
issued, because if not complied with, the examiner must
propose it to IRS Counsel for summons enforcement. Counsel
would "have kittens," if no attempt were made to secure the
original from files in the Federal Records Center.

Even if the original were demonstrably lost, or destroyed in
the normal course of time, IRS (through the DOJ Civil
Division) would have to explain in District Court why IRS
must have the copy. "Yes, computer tells us basically
what's on it...we don't know anything of what's supposed to
be there and maybe isn't...normal enforcement selection
didn't select it...sure, we rarely but still do lose
originals...but we still gots to see the copy!"

To the contrary, there should be no objection to honoring an
IRS written or even oral request of the t/p personally for a
copy.

Fred F.

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Tim wrote:

- quote -

The agent might routinely ask a corporation officer or Form
2848 representative on the case, but he/she should honor a
response that the person asked is not in a position to
normally be in possession of the return copy. This is the
case of an officer of the corp, or the representative is not
the preparer of that return.

The examiner should well understand that he/she would
certainly not want a copy of his/her return passing through
the hands of anyone not with a "need to know" what's on
there.

Fred F.

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Victor Roberts wrote:

- quote -

There is often enough information on the IRS computer's
"digest" of the return for "related return inspection"
purposes, so as to make waiting for an original unnecessary.

- quote -

In fact, that's a serious IRS Code of Conduct violation, and
examiners should know it takes only a complaint to IRS
Inspection Service to cause grief, even if the complaint is
unfounded.

Fred F.

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I stand corrected on the deduction of legal
expenses...thanks for the information, it has been awhile
since I had to address the issue... As for the copy of the
return issue, it is a choice that the taxpayer has in the
matter, to give it now or have the agent obtain it...the
time that it takes to obtain the return does not necessarily
mean that the IRS has poor slow systems, it is afterall a
big agency with over 100 thousand employees and millions of
returns filed...six weeks is the worst case scenario in my
experience. It is nice to have the returns all at once at
the onset of the audit, and if issues arise that involve
shareholder and corporation it can be readily ascertained
how each handled a particular transaction if it affects
both...No problem in not giving it, just stating how much
more smoothly things go if you do...In the end it is the
taxpayers call...sorry if I ruffled some feathers on
here...seeing from the response I got, I suppose I will keep
my IRS experiences to myself...and I never once implied nor
intended to imply that IRS employees did not act within the
law, and cannot understand how that was gleaned from my
statement...

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"mytax" <myerstaxes[at]frontiernet.net> wrote:

- quote -

Does the agent at some point confirm that the copy the
shareholder/taxpayer gave him is an accurate copy of the
return that was filed?

Bob Sandler

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"Victor Roberts" <xxx[at]lighting-research.com> wrote:

- quote -

Right

- quote -

Wrong.

- quote -

So they do, but if the law were always crystal clear and
everyone always followed it, we wouldn't have this board or
the enforcement functions of the IRS.

Contrary to myth and horror stories in Congressional
hearings, IRS employees are human beings. Good enforcement
employees are highly curious by nature. It really helps you
figure out when you're being hosed.

So here's this agent working this audit, and she needs a
copy of this 1040 to go with the corporate package. Yes,
she can get it internally and find other things to do while
she waits. But when she finally gets it, you can bet she'll
remember that you gave her a hard time and will think, "Hmm,
I wonder if it was because of something on the return." She
can't and won't make up anything, but she'll want to make
sure you didn't either.

--
Phil Marti
Clarksburg, MD

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"mytax" <myerstaxes[at]frontiernet.net> wrote:

[snip]

- quote -

Let me make sure I understand this correctly.

The agent will request that the taxpayer provide a copy of
his tax return so that the agent does not have to go through
the bother and suffer the delay associated with ordering a
copy internally, said delay being caused solely by the fact
that the internal organization of the IRS is slow and
inefficient.

And - if the taxpayer does not comply with this request,
which again is made necessary only because of the poor
internal organization of the IRS, the agent will take out
his frustration on the taxpayer by deciding the case on
factors other than its merit.

And I thought that, except for some of our elected
officials, government employees acted according to the law.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

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mytax wrote:
- quote -

(snipped....)

- quote -

I used to think so, too, mytax, but somewhere along the
line (since 1980 or thereabouts) things changed. Take a
look at publication 17, page 194. One may deduct legal
expenses in attempting to collect... etc So a settlement is
not a prerequisite.

ChEAr$,
Harlan Lunsford, EA n LA
Mon Aug 7 2006

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Ernie Klein wrote:
- quote -

You are correct Ernie, in order to deduct this "legal"
expense one would have had to have had a settlement and of
course there are other factors to consider whether it is
deductible at all...

Now for the Revenue Agent asking for a copy of the 1040 of
shareholders...I am a former Revenue Agent, and this request is
standard and is considered a part of what is called a "Package
Audit"...There are many things that can pop up during the audit of a
corporation that involve transactions with the shareholders, and rather
than request the copies later and suffer a delay in the audit process,
the agent gets "All" of the returns up front, if the agent determines
that there are some adjustments to the shareholder return as a result
of the corporate audit then they will duly notify that shareholder in
writing to officially open the examination of their return...Lastly, if
the agent asks for a copy give it to them...Since you are no longer on
good terms with the corporate officials, then you do have a right to
tell their representative to have the Agent contact you and you "WILL"
provide that copy...To respond otherwise such as get your own you have
it, does not make for a good relationship with the agent at the onset
when it is not necessary to do so...Yes the agent can get the return,
but it is faster to get a copy of yours than to make that request of
the internal system where it could take more than six weeks to acquire
and they are ready to start the audit now...

Okay, just my two cents...
Benita

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"Ernie Klein" <ecklein[at]pacbell.net> wrote:
- quote -

Wages

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Ernie Klein <ecklein[at]pacbell.net> wrote:
- quote -

If the legal expenses are deductible, a cash-basis taxpayer
deducts them when they are paid.

If the lawsuit is pursuant to earning income (e.g. suing a
company you did work for that didn't pay you), then the
legal expenses are deductible.

Seth

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"Tim" <Tim5464[at]yahoo.com> wrote:

[Since no one else has commented on this statement, I will
ask about it]

- quote -

Huh? How does one sue a corp. (for whatever reason) and
then deduct the legal expenses even _before_ the suit has
been heard?

Since no one corrected this statement, does that mean the OP
is correct: i.e., you can sue a corporation and deduct your
legal expenses so that other taxpayers (Uncle Sam) will help
you with the bill???

Somehow I don't think so.

--
-Ernie-

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"Tim" <Tim5464[at]yahoo.com> wrote:

- quote -

Yours and several hundred million others. Let's assume for
the sake of discussion that the agent working the corporate
audit wants to see your return. Obviously *he* doesn't have
it.

The consensus, which differs slightly from my original
response, but with which I agree, is don't give it to the
corporation. Tell them to have the agent contact you
directly.

Now let's say he does. As I see it, you have three options:

1. "Get it yourself."
2. "What's your address?"
3. "Drop dead."

Now put yourself in the agent's shoes. Which response is
going to least arouse his curiousity about you?

--
Phil Marti
Clarksburg, MD

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >