Description

IRS Tax Audit Manual for Bars and Restaurants 

Overview of the industry includes record-keeping, inventory, points of sale, profit and loss statements, expenses, balance sheets, and employment tax issues…

TABLE OF CONTENTS

• CHAPTER 1: BACKGROUND/GENERAL INFORMATION
  • Overview of the Industry 1-1
  • Financial Aspects 1-1
  • Operating Ratios 1-2
  • Books and Records 1-2
• CHAPTER 2: THE AUDIT
  • Examination 2-1
  • Pre-Audit Planning 2-1
  • Initial Interview 2-2
  • Initial Information Document Requests
  • (IDR’s) 2-2
• CHAPTER 3 : BALANCE SHEET
  • Examination 3-1
  • Audit Technique 3-2
  • Cash 3-2
  • Unreported Income 3-2
  • Audit Techniques 3-3
  • Stale Checks 3-3
  • Inventory 3-4
  • IRM 4231 for Inventories 3-4
  • Loans to Shareholders 3-6
  • Audit Techniques 3-6
  • Fixed Assets 3-7
• CHAPTER 4: PROFIT AND LOSS STATEMENT
  • Examination 4-1
  • Audit Technique 4-1
  • Sales 4-1
  • Income From the Sale of Food 4-2
  • Income From the Bar 4-4
  • Other Income 4-8
  • Income from Coin-Operated Activities 4-8
  • Other Activities 4-8
  • Costs of Goods Sold 4-8
• CHAPTER 5: REQUIRED FILING CHECKS
  • Examination 5-1
  • IRM 4034 5-1
  • Employment Taxes 5-2
  • Tip Income 5-3
  • Allocation of Tips – IRC Section 6053(b) 5-4
  • Tip Rate Determination/Education Program 5-6
  • Overview of Program 5-6
  • Examination Techniques Used to
  • Determine Tip Income 5-7
  • Discussion of McQuatters Formula 5-7
  • Summary 5-8
• GLOSSARY
  • General Terms G-1
  • Tip Income Related Terms G-2
  • Computation of Key Percentages G-3