While IRS audits are actually rare, it can be overwhelming when it happens to you. Here are some helpful tips on surviving an IRS audit.
Do not ignore IRS correspondence. IRS audit letters will state what is being questioned, how to and when to respond. It’s important that you follow the directions to provide the information in a timely manner. Ignoring the letter will only result in additional penalties and the IRS will continue to pursue, even if they don’t hear back from you.
Lying to an IRS auditor is a criminal offense. Being honest and truthful about your tax reporting is the only avenue. If there was a misstatement on the return, now is the time to fess up!
Don’t be bullied. If you disagree with the auditor, you can challenge the decision and dispute the ruling in the IRS Court of Appeals. You also have the right to ask to speak to the auditors superior if you’re concerned about the audit engagement.
Stay current on your tax filings. Failure to file returns isn’t going to win your brownie points. Be sure to file returns, even if you can’t pay. Also, if you’re on an installment agreement, be sure to make your payments on time.
Be prepared for the audit. The IRS audit letter will indicate specific areas under audit. You should be prepared to support these items and answer questions related to these accounts. Do your homework and be ready. If you need extra time to gather your documents, ask for an extension.
Lastly, remember to take a deep breath and relax. Most audits are quite simple and merely require you to supply documentation. If you wish to discuss an audit matter, contact us today.