October 27, 2022
IRS: Accounting error in your favor?
Learning that the IRS is going to audit you or your business can be incredibly stressful. You may be worried about the time or expense it will take to prepare for the audit or nervous that it will reveal mistakes or misconduct and trigger harsh penalties.
However, not all audits end with bad news.
IRS owes $9 million
As an example, we can look at an interesting experience involving actor and filmmaker Tyler Perry. Recently, he shared a story that the IRS conducted an audit after an agent became incredibly interested in Perry’s financial assets.
The audit went on for three years, during which Perry worked with multiple accountants and spent significant time and money.
Ultimately, the audit revealed that rather than Perry owing money to the IRS, the IRS actually owed him $9 million.
Had the audit not occurred, the massive financial oversight could have gone undiscovered indefinitely.
It is not likely that ordinary people will learn the IRS owes them millions of dollars. However, Perry’s situation highlights a few critical details that we can all take into consideration when it comes to our own taxes.
First, it reminds us that the IRS is not perfect. Agents make mistakes, jump to conclusions or make bad decisions during an audit, which can take a very real toll on taxpayers. Calling these situations out can help people protect themselves and their rights.
Secondly, it illustrates the fact that tax preparers and accountants make mistakes, too. In Perry’s case, he ultimately fired his accountants after the audit. Should you discover mistakes or errors in your own taxes, you, too, can take action to rectify the situation. Filing a complaint or an amended return can be options to consider.
Finally, this case can remind us that thorough preparation and skilled guidance can be vital before, during, and after an audit. Individuals need not navigate an audit alone. Getting help from legal and financial professionals experienced in resolving tax matters can make it easier for taxpayers to pursue a fair outcome.