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In connection with the examination (auditing) process, the IRS has been preparing Audit Techniques Guides (ATGs) intended to assist IRS examiners during audits by providing insight into issues and accounting methods unique to specific industries. ATGs explain industry-specific examination techniques and include common, as well as unique, industry issues, business practices and terminology. Guidance is also provided on the examination of income, interview techniques and evaluation of evidence. While these ATGs are designed to provide guidance for IRS employees, they are also useful to small business owners and tax professionals engaged in tax planning and preparation of tax returns for a number of reasons. They highlight what the IRS considers fruitful areas for potential upward adjustments and what types of record-keeping should be available. And they offer insights into the examination selection process for a particular industry or type of occupation.
Previous ATGs have addressed: Aerospace Industry; Air Transportation; Architects and Landscape Architects; Art Galleries; Attorneys; Business Consultants; Cash Intensive Businesses; Child Care Provider; Construction Industry; Farmers; Fishing; Hardwood Timber Industry; Ministers; New Vehicle Dealerships; Oil and Gas Industry; Reforestation Industry; Retail Industry; Veterinary Medicine; and Wine Industry. These ATGs are available for download on the IRS website at http://www.irs.gov.
In October 2015 the IRS issued an ATG for the Entertainment Industry, with separate sections for Music Business, Songwriters, Publishers, Live Performers, Producers, Managers, and Video Production. Anyone participating in or advising participants in the Entertainment Industry would benefit from at least a brief review of this Guide. Regardless of the accuracy of the IRS’s observations about the industry, the insights offered into IRS "profiling" methods and assumptions may be of significant value in minimizing potential tax issues.
The IRS offers a wealth of information for taxpayers, tax preparers and tax attorneys on its website. I also welcome you to read more about IRS processes and how a tax attorney may be able to help you improve the outlook of a tax situation you are facing. Some helpful links appear below. If you'd like to consult with an experienced tax attorney, I welcome you to contact my Philadelphia law office.