Bookkeeping and tax for medical businesses • Personal tax returns for individuals

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The IRS sent me a letter. How bad is this?

Probably not as bad as you think. Take a breath, then look at the letter carefully.

Most IRS letters are notices, not audits. A notice means the IRS has a specific question or found something they want addressed. Common examples include CP2000 notices where the IRS thinks you didn’t report income that a payer reported to them, balance due notices for an unpaid amount, identity verification requests, or simple corrections to a calculation. These are routine correspondence. The IRS sends millions of them every year. They ask for a specific response, and once you respond correctly, the matter closes.

Even when the letter is an actual audit notice, it’s a process with defined steps and deadlines. The letter will specify what tax year and what items the IRS wants to review. It will tell you what documentation they need and when they need it. An audit is not a verdict. It’s a request to verify what you reported on your return.

What matters is responding correctly and on time. The first step is reading the letter carefully to understand exactly what it says. IRS letters have notice numbers and specific language that tell us what is being asked. Many people panic before they actually understand what the letter says. The second step is identifying what documentation is needed. The third step is assembling that documentation from your records. Then drafting the response and submitting it before the deadline.

This is where tax audit support comes in. Hunter Green CPA reads the letter, figures out what the IRS is actually asking for, gathers the documentation from your records, drafts an appropriate response, and tracks the deadlines so nothing slips through.

Clean books do most of the heavy lifting in these situations. When your records are organized and accurate, finding the documentation to support your position is straightforward. The books show what happened. Bookkeeping for medical businesses done right throughout the year means that responding to an IRS letter becomes a matter of pulling the relevant records rather than reconstructing history from memory and bank statements.

If you received a letter and want help understanding what it means and how to respond, book a consultation. We can walk through it together and figure out the right next step.

Your Trusted CPA

Next Step:
A Short Conversation

Tell us about your business and what you need help with. We'll ask a few questions, explain how we can help, and tell you exactly what it will cost.

More Questions

Our revenue mixes private pay, long-term care insurance, and a Medicaid waiver program. Can your books keep that straight?

Yes. The books track each payer type separately so you can see where revenue comes from, how long it takes to collect, and what your actual margins look like by source.

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Aging in place keeps growing. Does that actually show up in agency finances?

The demographic demand is real, but whether it shows up as profit depends on your unit economics. Agencies that track margin per client turn the tailwind into growth. Agencies that just track revenue get busier without getting ahead.

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What should an hour of care actually cost me to deliver?

An hour of care costs far more than the caregiver's wage. Add employer payroll taxes, workers comp, travel time, training, and unbilled gaps, and the fully loaded cost can run 30 to 50 percent above the wage itself.

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I am a mobile therapist working out of my car. Do I even need real bookkeeping?

Yes, but scaled to your operation. Simple books that capture per-visit revenue, mileage documented the way the IRS requires, and quarterly estimates handled. Small operations lose the most to missed vehicle deductions and April surprises.

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What does your payroll setup include for an agency with hourly caregivers?

The setup includes a fully configured payroll system, typically Gusto, with overtime handling, correct withholdings and tax filings for your state, employee records, and the reporting your books need. You also get hands-on training so you or your admin can run payroll confidently going forward.

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I did my own QuickBooks setup and I am afraid to look at it. What now?

DIY QuickBooks files with miscategorized transactions and unusable reports are extremely common. We assess whether to repair or rebuild, restructure the accounts for your type of medical business, reconcile everything, and hand back books you can actually trust.

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Hunter Green CPA provides bookkeeping, tax preparation, and tax strategy for medical business owners across the United States. Alongside its business services, the firm prepares personal tax returns for individuals and families. Based in Oak Park, Illinois and led by Mason Hunter, a CPA with 10 years of tax experience and a background in corporate tax management.

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