I went thru the IRS thing last year. Supposedly they can only audit you back 3 years BUT, if the "suspect" that you may be defruading Uncle Sugar then they can go back as far as necessary to prove their case. All IRS auditors are pricks. You don't get hired for the job unless you are a big one! They went back to 1987 (the year I retired from the Army and started my business) on mine. Same as you, IRS claimed I was running a cash business on the side and not paying taxes on the cash receipts, etc. $12k and 6 months later they finally gave me a clean bill then started all over again 3 months later because they said my state taxes did not match my federal. Well of course not, its different rates.... So, another $4k and 2 months to get that cleared up. Put a big crimp on my spending. Bad part is there is no way to claim the amount you pay your accountant as a tax write-off. I tried and its a no-go!!!!!!!!!!!!!
