Destroyed records

"jbccpa" wrote

The bulk of most itemized deductions are found on a few documents. W-2 and canceled checks for state tax paid or withheld. Mortgage statement(s) for any mortgage interest paid. Property tax bill and canceled check (or the afore mentioned mortgage statement) cover the property tax paid. The insurance company could provide info on premiums paid. Doctors could provide info on payments you made for that year.

You should be able to cover most of it quite quickly and inexpensively without having to get copies of every single canceled check as proof.

Also document the flooding as "cause" for the loss of better records.

Geez. I wonder what motivated the Service to audit all his itemized deductions?

The IRS allowed the property taxes and mortgage interest. They are questioning the charity and miscellaneous itemized.

Contact charities for affirmation. Contact Bank for cancelled checks microfiche. Contact credit card companies for history of

Dick

Would fees to obtain these records (often they are bank and credit card fees for old statements, though the charitable contribution receipts are usually free to obtain) be deductible? I'm thinking perhaps as a misc deduction subject to the 2% limitation, but am not sure.

wrote

Yes. Unless they are for a business, like a Schedule C, corporate, etc. Been there and done that with a client many a year ago.

If you have to go that route, obtain the bank statements first, then ask for specific checks to shave the time it takes the bank to pull these old items. Talk to the bank to see if they'll cut you any slack on the total fee.

My first reaction here was that taxpayer had not even responded to the audit by mail letter. In fact this might actually BE the case, if that mail audit letter was not even questioning those two items, but only wanted documentation on the others.

Moral of the story: always respond to IRS correspondence.

ChEAr$, Harlan Lunsford, EA n LA (back from Baltimore and meeting our distinguished moderator.)

EVERY expense incurred while complying with an audit is deductible (as a miscellaneous itemized deduction subject to the 2% of AGI floor). - TC Memo 2003-232, where I personally proved that. - where the IRS tried to deny me mileage costs for attending an audit.

Congratulations and thanks.

Stu