During an audit, the IRS allowed only 80 percent of my internet and phone bill as a deduction.
The auditor said that 80 percent was the amount her gut told her to allow. Can the IRS do that?
Yes! The IRS can allow or disallow pretty much whatever it wants in an audit of your records. At the audit stage of the game, the burden of proof is on you.
Here, you have the IRS willing to give you 80 percent. What proof do you have that you deserve more than 80 percent?
When you think about your proof, the 80 percent might look pretty good. On the other hand, you might have proof to make the IRS eat that 80 percent. You have a choice: take the 80 percent or prove that you deserve more.
Don’t forget: at this stage of the game, the burden of proof is on you. And frankly, when it comes to tax law, you should always consider that the burden of proof is on you.