9/07
Can I get audited?
Yes. At least 1 in 250 cases is required to be randomly audited by a CPA or accountant. Additional cases can be audited if the U.S. Trustee believes for some reason additional investigation is required.
Remember we said bankruptcy largely works on the honor system? That's how most people inside the system prefer it but Congress, in response to the credit industry's horror stories, decided some auditing should be done to see if the existing system is missing anything.
The typical audit is focused on verifying the accuracy of your statements about income and expenses from the six-months prior to the bankruptcy filing as well as prior year's income from tax returns. They may ask for copies of paychecks and bank records going back over that six-month period. And they will compare this information to the schedules filed in your case. In most situations this is handled entirely by mail.
They will also compare your schedules of property to public records. If there is a discrepancy, they will ask for an explanation of course. Most real estate and automobile records are available over the Internet through a variety of sources so it is relatively easy to see if someone has failed to disclose land or motor vehicles.
Even if you made a mistake in the paperwork, it is not necessarily serious. The auditor is not a prosecutor trying to trick you into a trap. If the error did not effect your qualification for the relief you are seeking, it is likely to be harmless. It is only if you have been deliberately withholding information that these audits will really harm anyone.
Remember we said bankruptcy largely works on the honor system? That's how most people inside the system prefer it but Congress, in response to the credit industry's horror stories, decided some auditing should be done to see if the existing system is missing anything.
The typical audit is focused on verifying the accuracy of your statements about income and expenses from the six-months prior to the bankruptcy filing as well as prior year's income from tax returns. They may ask for copies of paychecks and bank records going back over that six-month period. And they will compare this information to the schedules filed in your case. In most situations this is handled entirely by mail.
They will also compare your schedules of property to public records. If there is a discrepancy, they will ask for an explanation of course. Most real estate and automobile records are available over the Internet through a variety of sources so it is relatively easy to see if someone has failed to disclose land or motor vehicles.
Even if you made a mistake in the paperwork, it is not necessarily serious. The auditor is not a prosecutor trying to trick you into a trap. If the error did not effect your qualification for the relief you are seeking, it is likely to be harmless. It is only if you have been deliberately withholding information that these audits will really harm anyone.
