Personal Problem: The IRS,... and My Tax AccountantSubmitted by R_Michael on Fri, 04/15/2011 - 06:56
I have been in business for myself for a year now. My company sales for 2010 were just shy of 92 grand. I started this single proprietor LLC as a result of losing my job when the company I worked for was shut down by the bank. They took everything and were planning to take my bosses family home... he killed himself a week after he lost his company... but that is another story for another time.
I already had an established list of wealthy clients through my many years of working at my former employer, and they all encouraged me to just keep working for them under the banner of my own company. I am in the home maintenance and repair industry. I am non-union, having had numerous run ins with unions in the past where I vehemently disagreed with their overt politics and policies.
To make a long story short (hardly possible) I went to the lady who has done our taxes for the last two years, taking my box of documentation with me -- receipts, bank statements, rental agreements, canceled checks and the all important profit and loss summary from my accounting software. She has always been helpful in the past.... when I wasn't self employed. While sitting in the waiting area, I began to notice political posters in numerous locations in her family business. They were about a current hotly debated issue now going on in my home state of Missouri... Right to Work legislation. And she is obvious an opponent of Right to Work. "Right to Work is a Rip-Off" was in several locations in her offices. There were posters that read "Why Right to Work is a Lie" with a list under the heading.
My first thought was "I hope she will deal with us fairly." And my second thought was, "Surly she will... she is a professional and won't allow my non-union status to interfere with her duties as our tax accountant".
As soon as we sat down she asked where we had our taxes done last year. I said "Here, of course". She was looking at a file in front of her, "No you didn't... where was it?"
Then she asked for my Profit and Loss summary, looked at it for about 3 seconds and said, "This is a joke, right?" I was taken back. Then she said "you are going to be audited by the IRS, you do know that don't you?" I asked her why and she said, "Because your accounting software is too user friendly." I informed her that I either had or could easily get documentation to establish every line involved in my P&L. Then she proceeded to grill me about each line:
"What is this Rental of other business property?" A storage shed for my tools. "Where is it... in your back yard?" No, on highway 94, it's called such and such and the rental is $151 a month.
"What is this car and truck expenses?" Truck lease. "You can't do that."
"What is this Owner Draw account?" My pay I have taken out of the company to feed, house and cloth the four members of my family. "You do realize you will be paying self employment tax on every dollar of that?"
"What is this Employee Benefits?" That's our health insurance premiums, nearly $1800 a month!
She continued in this manner. The final straw is when she asked me a question about a line on Contracted Labor, my answer made her say, "You really have no right to be in business."
I grabbed the paper out her hand and the wife and began to collect the rest of our stuff and our 3 year old. The accountant stood up and began to walk away. I told her she had no business treating me like a criminal, to which she responded, "You have no business coming to me to do your taxes." and walked away.
Now this woman has our personal information in her system... SS#, income stats for the previous years, etc. Should I be concerned, or was this just her personal political taste acting rudely? Any thoughts about what I can do?