The auditor said....

[Pacun]

QUESTION:

"During an audit, the IRS allowed only 80% of my internet and phone bill as a deduction.

The auditor said that 80% was the amount her gut told her to allow.

Can the IRS do that?"

[Pacun]

ANSWER:

"Yes!

The IRS can pretty much allow or disallow whatever it wants in an audit of your records.

At this stage of the game, the burden of proof is on you. The IRS is willing to give you 80%. What proof do you have that you deserve more than 80%?

That's the question. When you think about this, the 80% might look pretty good. On the other hand, you might have proof to make the IRS eat that 80%.

So you have a choice: Take the 80% or prove that you have more."

[GeneInAlabama]

80% sounds very generious to me. I think it would be extremely hard to find someone that actually uses their cell phone 80% of the time for business. Seems like I read recently that the IRS said they would allow 50% but I don't think that would be automatic.

[TAXBILLY]

Just completed an audit where the auditor allowed 75% business use of a cell phone and 50% business use of the internet, absent any records.

taxbilly

[jainen]

>>absent any records<<

That's the whole thing! The IRS auditor couldn't care less what you actually use your phone or computer for. All she needs is a taxpayer's good records. Cell phones are no longer listed property, but they were in the year being audited, and so are computers. Unless the taxpayer has a contemporaneous usage log, anything the auditor allows is more than generous.

[GeneInAlabama]

Has anyone ever actually seen or known of anyone who kept a log of their internet or cell phone usage?

[ILLMAS]

Has anyone ever actually seen or known of anyone who kept a log of their internet or cell phone usage?

LOL if people can barely keep track of their mileage, I doubt they would keep a good records of calls or maybe the only ones that keep a log is an attorney, I have seen clients get a bill for a 10 minute call.

[joanmcq]

I can pull up my full cell phone bill, which shows what numbers I was calling and the length of the calls. So, in theory, I could figure out the exact percentage. If you have two cells, and use one for biz & one for personal, you might want to fight it.

But 80% is very generous. Take it and be happy!