IRS Sends Letters Due to Schedule C Mileage Errors, Suggests Education Visits

The IRS will be sending out approximately 5,000 letters to tax preparers of all designations who filed tax returns with a Schedule C that have a high percentage of traits typically found to have errors. These letters are being sent prior to the tax-filing season. The IRS has acknowledged that they specifically targeted returns that have car and truck expenses that appear irregular.

The letters are meant to be an educational tool and a reminder of tax compliance. Three different letters are being sent:

1. One simply covers due diligence responsibilities, potential consequences and includes helpful resources.
   
2. Another recommends that the preparer take five hours of continuing education on Schedule C prior to tax season. This letter will only be sent to EAs, RTRPs and prospective RTRPs, because the IRS can track the CPE for these preparers.
   
3. The third letter informs the preparer that an IRS employee will be in contact with them to schedule an education visit to review the responsibilities of the preparer. These visits will not be an audit and the IRS employee will not look at any client documents.