I am being audited by the I.R.S. again. O.M.G. (as in Oh My Government) This is the 2nd time! Two days after writing a post about the first experience, I received a notice from the I.R.S. !!!!!!!
Coincidence or punishment? I don't know, but here I go again with a mountain of paperwork. It has taken about 40 hours to get ready. I could be living dangerously by even telling you about this, but we are supposed to be protected by freedom of speech, right? And readers of ASK Harriete may learn something from this painfully anxious and toilsome experience.
The only protection is accurate records.
Yes, I do have a receipt for every expense.
You have receipts for all your expenses too, right?
Here is another issue...how about your Inventory Records? The I.R.S. wants to see my Inventory Records!!!
Do your Inventory Records include every single item you made?
Do your Inventory Records include:
- the completion date for every single item?
- information about when you sold each item?
- your COGS (Cost of Goods Sold) for every single item you make/sell?
Could you reconstruct these records for three years ago?
Thank goodness I had reasonably good Inventory Records.
Smaller items like pins and earrings are kept in an Inventory List on my computer.
In the next few posts, I will go over the minimum (in my opinion) for accurate Inventory Record Information including:
- Inventory Number (including date)
- Cost of Goods Sold
Hey, and after we cover Inventory Records, I will be recovered (hopefully) and able to tell you what happened at my I.R.S. audit.
Have you been audited by the I.R.S.? What worked for you?
Do you have an Inventory System? What are you doing? Please tell everyone in the comments.
Bermaid, the California Collection 2007
Three-dimensional fruit crate label constructed from recycled tin cans on a wooded fruit crate.
Display for three bracelets including the Williams Sonoma Chocolate Bracelet in the above photos.
Photo Credit: Philip Cohen