You are invited to write to LASN to have your financial and tax planning questions answered, either through this department, or in person. The following answers are of a general nature and may not apply to your specific situation. Please contact a professional for legal or accounting advice, none is herein implied.

I am not sure of what the income tax implications will be on a transaction I am contemplating. My accountant is not certain either. What should I do?

Contact the Internal Revenue Service (IRS) for a private ruling. You can get an IRS ruling on the tax consequences of the contemplated transaction. This is available to individuals as well as corporations.

Is it important to answer every question on my income tax return. I left some blank which I felt did not apply.

Tax returns with unanswered questions may be considered by the IRS as no return. This could result in delaying a refund or increase interest charges. It could also flag your return for an audit. Also, the statute of limitations does not expire and you can be audited at any time.

An IRS agent has asked me to fill out a statement of annual estimated personal living expenses. Why is this required?

They are probably looking to see if you are spending more money than the income you have reported. Get some competent expert help right away.

Under what circumstances should I ask for an audit?

When you request a prompt assessment, the IRS must act within eighteen months. This is appropriate if someone dies (heirs can only share in the estate after taxes are paid), or when a business closes down (key people and records may disperse with time).

I am the sole owner of a franchise business. Can I assume that it will belong to my estate when I die?

Check to make sure that this is provided for in the agreement. Federal laws give no rights to your heirs or estate. Of course, if the agreement has been assigned to a corporation, with the consent of the franchisor, it would be a different matter.

When is the best timing to amend a prior return? I forgot to claim a deduction but am afraid of an audit.

As you fear, filing an amended return means that the IRS will take a more careful look at your return. The three-year time limit for a routine IRS audit runs from the date of filing the original return. Wait until a few weeks before April 15th of the third year. This way the IRS won’t have time to do an audit on the return, but only for the item in question.