Tax Law (Questions About Taxes)/ewquest for info


An IRS auditor has requested a copy of my tax preparer quick book files which contains information beyond the scope of the Audit period. Must he comply

At least 3 years ago the IRS equipped all auditors with the ability to review Quickbooks files and since then has been expanding to other brands of accounting. Delivering them additional data is only part of the problem.

IF you had known. . .
  Then you could have not used quickbooks for your accounting. You could have actually done your accounting in a paper based system and possibly transcribed your records into QB at the end of the year to do balance sheets. Or you could have started a new QB file each year you were in business.

But those are whole nuther issues. We don't have the luxury of dealing in "IFs".

It is all yet to be adjudicated as to the propriety of the request. You can object on the grounds that much of the information is outside the scope of the audit. But that will not be what most people do.

Your Tax Preparer/representative isn't going to want you to do that, using phrases like: " you don't want to piss off the IRS. . . " Or "They do have the right to ask for it. . ."

Because your battlebot doesn't want to be known to the IRS as someone who is difficult to deal with. He has fear.

But the truth is The IRS has remedies at law, if you took such a stand. Such as going before a judge, getting adjudicated, and asking the judge to compel you to give it up. But if you were to go before a judge you'd then have the opportunity to absolutely limit the scope of their access to just the years in question. That would absolutely limit them to the years under audit, or you can negotiate and get it explicitly defined that all information that is not within the specific years in audit are restricted and they can't do it. No real downside for you, and you may find they'd give up trying to get it instead of actually fighting fair.

You could say: "in trying to make a backup copy of just the year in audit you have been unsuccessful". That is less in your face but gets to the same point.

But I don't know what your goal is in this audit. Are you hoping to hide? that will be tough at this point.

Are you wanting it just get over? Then your representative will say let's just give them what they want, but then it just keeps going as they keep wanting more and more.

Do you want to win? Most people don't win, so don't do what most people do.  

Tax Law (Questions About Taxes)

All Answers

Answers by Expert:

Ask Experts


Richard Fritzler


Specializing in Business and Corporate taxation. Comparing the advantages and requirements of different business entities, such as Sub-S Corporations, LLC`s, Partnerships (Both Limited and General), Doing Business as a Sole Proprietor, or Using a C-Corporation. Issues regarding K-1 distributions, 1040, schedule C, 1120, 1120s. Are you considering domiciling a Corporation in a low tax state? I can review the benefits and misinformation that exists.


I have been in the business of assisting business owners in reducing their taxes and liability since 1986.

National Small Business Owners Association.
Contributing author to "The Corporate Standard Newsletter".

Contributing author to "The Corporate Standard Newsletter".

I have been in the business of assisting business owners in reducing their taxes and liability since 1986.

©2017 All rights reserved.

[an error occurred while processing this directive]