IRS Examination:
The letter arrived white and nondescript except with the initials IRS, top leftt. I had been randomly chosen for a “2009 examination”, never saw the word audit I guess that’s so yesteryear. My initial reaction was fright, despair, head rushing blood, time loss & expense. That is what we are conditioned to expect. Fortunately that was not my reality; the Revenue Agent was professional, courteous & respectful, knew her stuff, asked all of the right questions. We were prepared, organized & accommodating.
After that first reaction upon reading the letter, nano seconds later, I came to my senses, and thought this will be a great test for our bookkeeping and accounting procedures, most importantly we have done nothing wrong nothing to conceal. I’ve told my accountant over the years that if anything is in question, which rarely is to error on the side of over paying. I’m happy to pay my share, I plan for it, I expect it, even enjoy it in a strange & weird way. I loathe to call it my civil duty, sounds cliche, but at the end of the day it really is a privilege. It’s like paying the tab after a great meal. You appreciate it. I don’t want to get into where the Money goes, the politics of it all, but hey, this is our country we pay our way. I have visited around 60 countries and not that I needed it, but that alone helps amp appreciative perspective of this country and why travel is so important, we have it made here.
As a commercial photographer, you have to keep really tight books, true in every industry, but especially true with Schedule C’ers. We put a lot of time & effort into the books here, and it’s all well organized. The “examination” was an all day long affair at my CPA’s office, first up was about a 2 hour long Q & A, then she hit the books. Prior to the appointment I was given a list of documents, receipts, statements and the like to bring. It took me all of roughly 20 minutes to pull these items together, and I went further and added other items such as job folders, personal non biz receipts which I also keep, my 2009 date keeper, some images that were used in promotions, web site etc. that further justified various expenses, just in case. All receipts have notes on them to remind me, for example, why I was in San Francisco on 5/1, who I had dinner with & why in London on 7/12, what job I needed fuel in Chicago for on 11/11 etc. Note taking throughout the year is key, and I believe that’s one of the reasons why our examine was so short. When the agent requested a document, we knew where it was, what it was for and it was at our finger tips. I’m a note taking aficionado, jot notes down on everything, you just never know.
After sifting through our documents all day, with very few questions, the final verdict was delivered: No Change. Which is exactly want we wanted to hear.