ILLMAS Posted February 15, 2019 Report Posted February 15, 2019 Does anybody know where I can some information as to what the IRS might use to calculate retail markup for retail and wholesale of sports clothing, accessories and shoes. I took a look at the IRS retail audit technique guide but didn't find any percentage. Thanks https://www.irs.gov/pub/irs-mssp/retail_industry_audit_technique-guide.pdf Quote
RitaB Posted February 17, 2019 Report Posted February 17, 2019 Illmas, I represented a couple in a audit September 2018. The Tax Compliance Officer said the industry average for COGS for her retail store was 49.83% of gross sales. The taxpayer sells new clothing, jewelry, shoes. They had made such a mess trying to handle the audit themselves, nobody argued with me when I told them it was in their best interest to believe her and stop talking. 2 Quote
ILLMAS Posted February 17, 2019 Author Report Posted February 17, 2019 9 minutes ago, RitaB said: Illmas, I represented a couple in a audit September 2018. The Tax Compliance Officer said the industry average for COGS for her retail store was 49.83% of gross sales. The taxpayer sells new clothing, jewelry, shoes. They had made such a mess trying to handle the audit themselves, nobody argued with me when I told them it was in their best interest to believe her and stop talking. I hear you, my friend just shared this article: https://www.forbes.com/sites/robertwood/2019/02/07/trying-to-trick-irs-during-audit-can-mean-criminal-tax-charges/ 2 Quote
RitaB Posted February 17, 2019 Report Posted February 17, 2019 24 minutes ago, ILLMAS said: I hear you, my friend just shared this article: https://www.forbes.com/sites/robertwood/2019/02/07/trying-to-trick-irs-during-audit-can-mean-criminal-tax-charges/ Oh my, the things people will do! Actually, these folks thought it would all work out if he just called the number on the letter and had an honest 1.5 hour interview with the TCO. What could go wrong? Husband (engineer) told her that wife's little business was really more of hobby, she didn't really track inventory, and oh yes, we forgot about some merchandise in our attic. He sent TCO 110 PDF files on a thumb drive. TCO was livid the first few minutes she and I spoke, but by the end of the conversation she was laughing and said, "He's confident - I'll give him that." 1 Quote
Richcpaman Posted February 17, 2019 Report Posted February 17, 2019 This line: "but by the end of the conversation she was laughing " after a few minutes with you, I would presume we would all be laughing.... Rich 4 1 Quote
RitaB Posted February 17, 2019 Report Posted February 17, 2019 1 hour ago, Richcpaman said: This line: "but by the end of the conversation she was laughing " after a few minutes with you, I would presume we would all be laughing.... Rich She was so mad I had to do something, anything, to lighten the mood. I wasn't sure how she'd take it, but the Lord was with me. 5 Quote
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