I have a question for you in regards to my tax audit. I have a small business and I am a sole proprietor. I recently went in for my appointment with the auditor and it seemed all went OK until she looked at my bank statements. She said that I have about $100,000 unaccounted for in my receipts. I was surprised to hear that since I record every receipt. When I went home, I started looking farther into it, and figured out that I also used this account for personal use. I told her that I used this account for business only, buy after looking at the checks and the statements, I figured out that was the year when I was going to close my business and started also using the account for personal needs. Can I tell the auditor now that I also used the account for personal use and not just for business? I have another appointment with her in 3 weeks. Also, she asked me to bring details to my deductions that were not on the original agenda. On the original agenda she asked to bring supporting documents for Cost of Goods, Receipts, and Car expenses. Now, after the first appointment, she says she wants to also look at Travel Expenses, Meal expenses, and the Office Supplies expenses on the next appointment. Can they do that?
Thanks for your help in advance.