Tax Court: The Unreasonable Auditor
The IRS audited our client’s 2005 income tax returns. The auditor incorrectly believed our client, a chiropractor was receiving income from an offshore trust which was not disclosed on his tax return. The auditor never found any proof to substantiate this claim. In an attempt to unilaterally punish our client, the auditor disallowed all of the business expenses claimed on his tax return. The auditors finding would have generated a tax liability of $139,624 excluding all applicable interest and penalties. Our attorneys filed a petition with the United States Tax Court contesting the proposed assessment. Before trial, we convinced the IRS to review evidence which substantiated all the business expenses claimed on the tax returns. The IRS agreed to allow our client all of the business expenses reported on his tax returns. This resulted in our client not owing any additional taxes for the 2005 tax year.
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