How Far Back Can The IRS Go?
In 2003, 2004, and 2005 (and prior) I was operating as a sole propietor. 2004 was the first year that I hired a bookkeeping service and bingo - audit. After being notified of the audit for 2004 I dligently attempted to reach the agent and got nowhere. We had purchased another company that year that was also audited and lost because the IRS "claimed" that they did not respond. Fearing the same thing I asked my Congressman for assistance. It turns out that the agent was out of state for 6 weeks for training.
Not only did I get an appointment for the 2004 audit but they added 2005.
Through no fault of my own I was unable to attend the first date. I live in the mountains and we were literally surround by forest fires. The second date was cancelled due to legitimate illness. The IRS demanded attendance at the third or a summons would be issued.
and I was queried about my complaint by the IRS agent. My bookkeeper told me that I brought on 2005 by asking my Congressman for help.
At any rate, the IRS has demanded proof of incorporation for a tax year not even filed yet - obviously gathering data for adding 2006. It was also discovered that in 2003 an extension was filed and a partial payment paid.
The IRS has now expanded the audit to 2003, even though we believe that we technically filed something in 2003. Wouldn't this mean that the IRS would have had to initiate an audit prior to April 2006 for 2003?
What is the ruling on this? I feel that the IRS is acting maliciously based on the interegation by the agent and my bookeepers comments. I know everyone says this, but this is ridiculous. The IRS has not found ANYTHING that could not be explained an proven, yet they keep extending the audit.Source: community.lawyers.com