March 2019
In This Issue

We are grateful to have the opportunity to provide you with this valuable information via our monthly e-newsletter and our unparalleled forensic accounting and fraud investigative services.

The goal of this e-newsletter is to provide you critical, inside information that will help you "follow the money" in business disputes, divorce cases, fraud cases, estate matters, corporate embezzlement and to prevail when defending an IRS criminal case. We will do this by sharing the knowledge we have from our 25+ years of experience as an IRS Special Agent and 16 years as a private investigator / forensic accountant.

We take special care to ensure the information we provide you in "The Beacon" is the latest and most current information available.  In this edition, we talk about the importance of maintaining proper records.

We want to write about topics that will assist you in prevailing with fraud, divorce, estate and probate, and IRS criminal cases. Please e-mail us your topics of interest to
We encourage you to share our e-newsletter with others in your sphere of influence.  
Edmond J. Martin
Principal, Chief Investigator
Certified Fraud Examiner (CFE)
Texas Certified Investigator (TCI)

The Internal Revenue Code requires businesses to maintain records of their activities including invoices for services rendered, bank records and invoices for expenditures made for business purposes. It is also wise to have a system of accounting, a spreadsheet with income and expenditures or an accounting system such as QuickBooks or others. In the event your company or your client is audited by the Internal Revenue Service, these records become very important. IRS statistics show that in fiscal year 2017, the examination of returns was .5% nationwide with 70.8% being correspondence audits and the remaining 29.2% was field audits.

In recent years, there has been an increase in civil field audits (representing office audits and field audits) where the taxpayer is asked to come to the IRS office (Office Audit) or a Revenue Agent makes contact (Field Audit) with a business for the audit.   Experience has shown that Office Auditors are conducting more business audits. These are dangerous audits; the auditor has time constraints and is generally not trained or sophisticated in small business matters. If you have the records they are looking for and can answer their questions, then you probably are safe.

When you or your client receives a written notice of an Office Audit or Field Auditor your blood pressure will increase. You will generally receive a request for business and personal records, and your blood pressure will again escalate. Do not take the request for documents lightly. They will ask for business and personal bank records for the period under audit and can possibly audit other years.

Hopefully, you have prepared your records on an annual basis for the possible presentation to the IRS auditor and to be able to timely respond to their request. A little preplanning can keep you lower your blood pressure. Accurate records and timely responses may also establish credibility with the Auditor.

There is a common statement in Law Enforcement "you can beat the time, but you cannot beat the ride!" Unfortunately, with IRS the "ride" is painful, and everyone experiences it upon the receipt of the IRS notice for audit unless they are prepared.

In the civil audit situation, the taxpayer has the "burden of proof" as to

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At Sage Investigations we are dedicated to serving our clients nationally, to help them navigate the difficulties of dealing with fraud, divorce, estate and probate, the IRS Criminal Investigation, and other complex (forensic) financial fraud investigations. By narrowing our focus to our primary strength of following the money, we steer our knowledge, efforts, and experience to financial issues. We help our clients propel their cases forward by assisting in the review, acquisition, and organization of financial records, evaluating the elements of their cases, and helping create winning strategies. Through the use of our proprietary advanced financial investigative technology we trace and analyze complex financial data quickly, easily and efficiently, saving our client's time and money.
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Phone: 512-659-3179
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