FISCHER, CARRILLO & ASSOCIATES

$1.8 Million Case

DAVIS TAX FIRM BLASTS IRS

The Davis Enterprise,Sunday, February 12,2006 

Represented by: Guy Fischer of Fischer, Carrillo & Associates

Fischer, Carrillo & Associates won a $1.8 million suit against the IRS, protecting clients from an aggressive tax audit in Hollister, California.

Guy Fischer assisted clients in tax audits against their corporation, sole proprietorship, and personal taxable income, dramatically reducing their taxable income from $1.8 million for 2002 & 2003 to $50,000. The clients previously self-prepared their taxes, leading to an IRS audit that initially denied all deductible expenses for their corporation and sole proprietorship.

Fischer spearheaded negotiations with the IRS for five months, initially with an agent later relieved of duties and transferred to Idaho. In contact with three IRS oversight offices, Fischer established reasonability of deductions with a second agent, in many cases without receipts.

During the course of a two day examination, Fischer effectively wielded special IRS case law, including the Cohan Rule of 1930, in negotiations and arguments. Perceptive litigation conceived steps such as collapsing the corporation into a schedule C, all resulting in complete client vindication on 2002 tax returns. Using 2002 as precedent, the 2003 return examination rested in the client’s favor, despite drastically incomplete records needed to establish deductions.

Fischer stated, IRS Commissioner Mark W. Everson has increased audits over 20% for 2005, to 1.22 million “from a new emphasis on enforcement,” according to the commissioner. 1 in 107 will be audited this year. In 2005, audits of small corporations more than doubled to 11,000.

Richard Davis, an accounting professor at Susquehanna University’s Sigmund Weis School of Business recommended, “Taxpayers truly daunted by having to meet with an agent should hire a tax professional.” And, he noted, it’s always possible that the IRS is wrong.

With IRS budget increases of nearly $500 million, and the prioritization of enforcement, more taxpayers can expect an audit this year. In 2005 alone, the IRS collected $5 billion more audit revenue up 10% from last year. Fischer’s clients beat the odds & the IRS.