A taxpayer that has received notice of IRS audit needs tax audit help immediately. You should not try to handle an audit on your own and should instead seek audit help immediately. Just because your return is being audited does not mean that it is wrong or that there is an error on it. However, having professional help for tax audit is the best way to ensure that the final audit results will be the correct audit results.
The IRS can generally audit any return filed within the last three years. However, there are certain situations where they can go back six years or more. Once your return has been selected for audit, you will be notified by mail. The audit may be a correspondence audit (done by mail) or an in-person audit. The IRS auditor may seek to verify a few specific items on your return or the IRS may request substantiation of all return items. Time is of the essence in an IRS audit. Before you speak with the IRS auditor or provide any documentation, you should seek tax audit help.
For each line item that the IRS wants to review, they will request that you provide your tax documentation proving the item or deduction claimed. The auditor will subpoena bank statements and request receipts, canceled checks, and other various substantiation. Along with requesting substantiation, with an in-person audit, the IRS auditor will likely want to do at least one interview. They may also want to come to your house or place of business to conduct the audit and/or to review your day to day operations.
Getting help for a tax audit is essential to having a smooth audit process and ensuring that the audit results in the correct tax amount. Many taxpayers meet with an auditor on their own, believing that their return is correct and that they can handle the audit. They find the auditor to be friendly and helpful, only to then receive an audit report with most of their deductions denied and a large amount of taxes, interest, and penalties due. The conversations that the taxpayer took as friendly chatting were really an auditor digging for information and looking for ways to deny their deductions. Other taxpayers find themselves in a situation where they cannot gather the large amount of information in the short amount of time provided by the auditor. They are pressured into getting everything together and when they cannot, the audit report reflects that no information was provided so all deductions were denied.
As soon as you receive notice that the IRS is auditing your return, seek tax audit help immediately. You need to get a professional to review both your records and your audit report. Your tax representative will handle all contact between you and the IRS auditor. Even if you have all of your records and your return is 100% correct, you should still seek tax audit help.
Here are some additional tips for a successful audit process:
- Be courteous and polite to the IRS auditor. Although an audit is an emotional and stressful time, there is nothing to be gained by being rude or difficult with the auditor. Instead, be civil and professional and let your representative handle the interactions with the auditor.
- Never send the IRS your original documentation. Whether you are sending your records by mail, or if you are providing records in person, always retain your originals and provide the IRS with copies. You will not receive your originals back if you send them to the IRS. You will also not have any support for what you have already provided.
- Organize all records sent to the IRS. Many people will show up to an IRS audit with an unorganized box of receipts and hand this to the auditor. This is a mistake. First, these are your original receipts that if lost or ruined, cannot be replaced. Second, you should not presume that the auditor is going to add up your receipts or that they are going to give you all the deductions that you are entitled to. Instead, your documentation should be kept in an organized manner and totaled up. Making it easy for the auditor to review and easy for you to identify what they have and have not allowed.
- Review all IRS notices carefully. An audit is a very time sensitive process. Many of the notices pertaining to the audit have deadlines attached to them. Some are deadlines for providing documentation, while others are deadlines to file an appeal or to extend the assessment statute. Missing these deadlines could be very detrimental to your audit. Therefore, it is important to carefully read each of your notices and know your deadlines.
- Document everything. Everything that you send to the IRS should be in writing. Make sure to send all correspondence certified. If you request a deadline extension, do so in writing. Request any IRS questions is writing. An audit has a lot of time-sensitive information being passed back and forth between you and the IRS. Make sure that you have as much proof as possible of what was sent and what was said.
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