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Attorneys Audit Technique Guide

Revision Date - March 2011

NOTE: This guide is current through the publication date. Since changes may have occurred after the publication date that would affect the accuracy of this document, no guarantees are made concerning the technical accuracy after the publication date.

Table of Contents

Chapter 1 Overview of Attorney Returns

  • Introduction
  • RecordKeeping
  • Bank Accounts
    • General Trust Account
    • Segregated Trust Account
  • Other Revenue Sources
  • Client-Related Expenses
  • Attorney-Client Privilege
    • General Rules
    • Fee Arrangements and Client Identity
    • Summonses
  • Information Reports
  • Summary
  • Exhibit 1-2 Attorney-Client Privilege

Chapter 2 Audit Steps

  • Pre-Contact Analysis
    • Accurint Searches
    • Internet Searches
    • Web Currency and Banking Retrieval System (Web CBRS)
    • Return Preparer Listings
    • IRP Transcript
    • Comparative Analysis
  • Information Document Requests
  • Initial Interview
  • Exhibit 2-1, Sample Information Document Request (IDR)
  • Exhibit 2-2 Bank Document Request List
  • Exhibit 2-3 Interview

Chapter 3 Audit Issues

  • Gross Income
    • Introduction
    • Gross Income Types
    • Client Trust Accounts
    • Noncash Sources
    • Cash Payments
    • Constructive Receipt
  • Expenses
    • Entertainment, Promotion and Advertising
    • Travel
    • Disguised Hobbies
    • Corporate Expenses
    • Depreciable Books and Periodicals
    • Advanced Client Costs
  • Employed Versus Independent Contractor Issue
  • Corporate Officer is an Employee
  • 1099 Issues
  • Form 8300 Issue
  • Related Entities/Taxpayers
    • Corporate Taxpayers
    • Corporate and Individuals
  • Personal Service Corporation Accounting Periods and Tax Computations
  • Exhibit 3-1 Client Costs and Advances
  • Exhibit 3-2
  • Exhibit 3-3 20 Common-Law Factors/Rev Rul 87-41

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Page Last Reviewed or Updated: 10-Oct-2014