Jim Beddow, CPA

This is not good news. (Disclaimer: At this point, this is all third party information. While I believe the sources are accurate, there has been no announcement from the IRS.)  It appears that the IRS has started requesting electronic QuickBooks files in examinations of entities that use QuickBooks and supposedly the IRS will make an announcement to practitioners in the next week or so. A CPA that I know personally in California stated that he has a audit document request in which a Revenue Agent referred to an IRS national directive when requesting the QuickBooks file. I’ve also learned that the IRS assembled a QuickBooks training manual for Revenue Agents in in January of this year and that the IRS has obtained a large number of QuickBooks user licenses from Intuit.  The National Association of Enrolled Agents allowed a subcommittee of their organization to review the training manual for the IRS.

The implications of this are far-reaching. Having the entire QuickBooks file available means than an agent could conduct an audit fishing expedition over any number of years that the file contained.  Placing a password protected closing date on the QuickBooks file would be virtually useless since those passwords are easily busted.

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