Archive for the ‘bank records’ Category

What the IRS Does With Your Bank Records

Posted by John Ellsworth, Esq March 23rd, 2010

Tax Audit Report #4 Here’s an obvious one when the IRS audits your small business. Let’s say you deposit most of the money from sales or from your customers in a single bank account. You can be sure that the IRS audit will proceed with a reconciliation of bank deposits to gross receipts. What does [...]

LUQ: Large, Unusual, Questionable: Your Bank Records

Posted by John Ellsworth, Esq March 20th, 2010

What the IRS Does With Your Bank Records: Tax Audit Report #3 A third step often involved in the review of your bank records during your tax audit is for the IRS audit to proceed with a review of your monthly bank statements. The monthly bank statements are studied to: 1. Help understand the frequency [...]

Reconciliation of Bank Records

Posted by John Ellsworth, Esq March 19th, 2010

Tax Audit Report #2 The first step the IRS audit guidelines require of an IRS tax auditor when he or she is reviewing your bank records is to do what’s called a “bank account reconciliation”. In doing the bank account reconciliation the IRS tax auditor will review the year-end bank account reconciliations prepared by you [...]

Your Bank Records

Posted by John Ellsworth, Esq March 2nd, 2010

Tax Audit Report #1 What the IRS Does With Your Bank Records: Tax Audit Report #1 Bank records are what the IRS calls third party source documents. IRS audits almost always ask to see your bank records. The bank records presumably support your financial records. They provide an audit trail for transactions sometimes undisclosed in [...]