Leading accounting, tax, consulting and business valuation firm Gettry Marcus CPA, P.C. shares an explanation about Information Document Request (IDR) forms used by the IRS
Woodbury, NY / myprgenie.com / April 28, 2014 / When the IRS is conducting a detailed audit of a taxpayer, it may want to see documents and records retained by the taxpayer. The examiner will ask the taxpayer what type of documents are maintained, and will request that the taxpayer produce particular documents for inspection. Gettry Marcus CPA, P.C., a leading accounting, tax, consulting and business valuation firm, shares information about the IRS's Information Document Request (IDR) form.
The IRS uses Form 4564, Information Document Request, to request information from a taxpayer for an audit. There are several versions of Form 4564, such as those for income tax audits, tax-exempt organizations, and tax-exempt bonds. Form 4564 will list documents needed to support taxpayer items that the IRS wants to verify. Taxpayers may want to consult with legal counsel to ensure that they do not provide too much information and do not provide privileged documents.
The IRS has put into effect a new IDR enforcement process for IRS examiners to obtain information. In particular, the IRS's Large Business and International Division (LB&I) issued several memos in 2013 and 2014 to provide guidance on the use of IDRs and to explain the new IDR enforcement process. Other divisions follow, or will be following, similar procedures.
Under the guidelines, examiners are instructed to prepare one IDR for each issue being examined; the IDR should describe the issue for which the documents are being requested. IDRs should be clear, concise, and customized to the taxpayer under audit. However, there is an exception to the requirement that the IDR state the issue. An initial IDR that requests basic books and records and general information about a taxpayer's business does not have to meet this requirement.
Examiners are further instructed to discuss the proposed IDR with the taxpayer and to agree on a reasonable time for the taxpayer to respond. LB&I instituted a three-step process for enforcing the IDR, with strict deadlines: a delinquency notice; a pre-summons letter; and a summons. The process is mandatory. IRS Chief Counsel will enforce IDRs through summons issuance when necessary. The IRS may also apply this stricter process if it believes that the taxpayer's response is incomplete.
View the full article on the Gettry Marcus website.
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Gettry Marcus CPA, P.C. is a top New York City and Long Island CPA firm with offices in Woodbury, Long Island and New York City. We provide accounting, tax, and consulting services to commercial businesses, high net worth individuals and various industries which include real estate and health care. We have one of the premier and most credentialed business valuation, litigation and forensic accounting groups in the New York Area. Our experience in diverse industries and a highly talented and experienced professional staff gives us the ability to share valuable insights into our clients' businesses, to better understand their goals and problems and to help them attain the vision they have for their company.
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SOURCE: Gettry Marcus CPA, P.C.
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