Trucker

bobm

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At a recent IRS audit , my wife audited a long distance trucker … he makes long distance hauling through a national company that provides contract hauling to client truckers. This trucker receives a company credit card for fuel , repairs, meals, etc.. The company receives trucking payments from clients, takes out credit card charges and their fees, cuts checks to the trucker, and issues final income tax accounting and 1040 to the IRS. Well, it seems that what that company reported to the IRS and what the trucker claimed on his tax return amount to about a $50,000 difference for 2 years. Hmmm ! How does he live on less than $20,000 income profit per year considering he has wife and 4 kids, a mortgage of over $300,000. , etc. He also made expense deductions for his street clothing including underware, ( clothing such as these are not deductible , unless one is a stripper and use these as part of a performance costume ). He got a Tax. bill for almost $20,000 and time to reconcile the differences in what was reported to the IRS and his bank accounts. Looking deeper … the national company will be getting a servailance of their business practices and audit by the Revenue Agents for possible fraud.
 

ducks4you

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Pretty funny Rammy!!
My part time business is Schedule C and I run gasoline, mileage and office supplies inCLUDING those neccessities that I need for a home office, TP, paper towels, cleaning products. DH does my books and I believe that I am able to write off 1/2 for every business meal. When I have a loan signing and we eat out same day, it is deducted. DH uses a hand written ledger. I keep a mail log (since I have to FedEx/UPS document packages) and I keep a computer and printed copy that has columns for:
1) company who hired me (I have worked for over 200 of them)
2) name of signer(s), date of signing, city
3) fee
4) mileage
I record the mileage from the minute I drive away from home to the mile that I arrive back home.
I also keep a Notarial Journal, which is completed and signed by the individuals whose loan packages, POA's, etc. I have witnessed and I have them sign for every notarized document. I write in the address, date/time, names of documents, signer's ID information and their signatures.
Though not for THIS business, I was audited twice when I ran a small riding academy. HORSE businesses Always get audited bc of all of the cheating. I passed those audits bc of DH's great book keeping skills, accurate records AND I wasn't showing or breeding horses, an expensive hobby that people want to write off on their taxes.
 

bobm

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On a recent IRS audit , a Real Estate Broker claimed that her RE activities were NOT a business because she did not have an office so she should not be audited. She had a valid RE license, sold homes, and conducted her business out of her home. Conclusion ... she had a business. A Real Estate Mortgage broker conducts his prospecting activities to make mortgage loans at Starbucks. He first buys ONE cup of coffee for himself then goes around and buys coffee for anyone that is willing to talk to him all day long. He too claims that he is not a business since he doesn't have an office. Well, he conducts business for a mortgage company, so is in deed a business. As for his deduction claims for the coffee that he purchased for his prospects... he can only deduct 50%. A roofer claimed that he earned $24,000 2 years ago and $22.000 last year working as a roofer for his own sole propriatorship company in Oregon. Upon further review of his tax returns showed that he was married and filed seperately wich revealed that he also had additional income of $19,000 from a 1040 form issued to him from a roofing company in Texas on several homes in Ore. Further investigation showed that that Texas company with a PO Box as its address, was owned by his wife as the sole owner with an income of over $160,000 and expenses of $ 140, 000 the previous year and no employees other than contract labor ( husband) .She lives in Oregon in the same house as this tax payer. Hmmm, slight descreptancy ... wife will now be audited too.
 

bobm

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My wife just audited another trucker. He is in his early 30s. Been a long distance trucker for 9 years driving his own truck and trailer and made decent money. About 3 years ago, he started hauling for a new company that had ambitions to expand greatly. He bid and got the contract to haul their products. However, he needed to expand too .... so, he purchased 3 trucks and trailers and financed them with a Truck Financing Company in Colorado. He used a dispatch service to haul freight for the return trips. He grossed over $800k that year and just under $mil. the next. He received computer printout for income and expenses. Seems like a dream come through, however not so. He used his own CPA to prepare his tax returns. Some of the reports did not match what the IRS had from other vendors. So, he got an invitation letter to appear for an audit. At the start of the audit, he and his wife stated that his dispatch company CPA company advised him to NOT come in for an audit interview, but he did anyway. Then, my wife asked why his own CPA has not filed for power of attorney to represent him but WHY was this other CPA firm working for the dispatch company on record as such. He was in total shock. With the tax payer's consent, my wife called the CPA on record to confirm the power of attorney status, and they confirmed this. The tax payer then asked if he could change the power of attorney to his own CPA. My wife then provided the proper paper work to do the change which the tax payer proptly did. She then asked if he wanted to postpone the audit, or call his own CPA and continue the audit to see what was revieled but no report to be issued... he said carry on and he will then consult his own CPA to figure out what was what.
5 hours later, it was revieled that the tax payer was in dept to his eyeballs beholding to his truck mortgage company, the dispatch company and their CPAs who knew to the penny what he had as income as well as his expenses and that they could control his finances as they pleased. Revenue agents will have a field day with this one ! :caf
 

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