The situation
Tom, an independent consultant in Illinois, received an IRS examination notice questioning his Schedule C business deductions. The auditor’s initial position would have added about $26,000 in tax, penalties, and interest. He had legitimate expenses but disorganized records and no idea how to respond.
What we did
- We stepped in as his representative so he never had to speak to the auditor directly.
- We organized and substantiated his deductions — mileage logs, receipts, and bank records — into a clean, defensible package.
- We responded only to what was requested, keeping the audit from expanding into other years or issues.
- We negotiated each disputed item directly with the examiner on the merits.
The outcome
The IRS accepted the substantiation and upheld the large majority of the deductions. The proposed $26,000 adjustment shrank to a small fraction of that, and Tom avoided the penalties tied to the disallowed amounts.
Substantiation wins audits
Audits turn on documentation. Organized, well-presented records — and limiting what the auditor sees to what was actually requested — protect legitimate deductions.
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About these stories
Illustrative client scenarios based on common case types. Individual results vary. These scenarios are composites drawn from common case types we handle at US Certified Tax Services; they are not specific named clients and are provided for illustration only. Outcomes depend on your individual facts and IRS determinations. For a review of your situation, request a free consultation.