Surviving an audit
There comes a time in many taxpayers’ lives when they must face the inevitable………. THE IRS AUDIT!!
However, there is hope in preparing for and surviving this tumultuous event.
Knowing what the audit process involves, why you were audited, and your rights and responsibilities will help you understand this process and accept it for what it is.
Know the facts!
- An IRS audit is not an accusation of misconduct. It is simply to determine the accuracy of your tax return.
- An IRS audit must be completed within three years of the date the return is filed.
Why did I get audited?
- Self-employed individuals, and those who run businesses whose transactions are mostly done in cash are more likely to be audited.
- If itemized deductions in certain categories are higher than average, one may face an increased chance of being audited.
- If the signed preparer of your tax return has been connected with previous IRS issues, you are more likely to be audited.
Know your rights!
- You have the right to an explanation of the audit.
- You have the right to representation by an attorney, CPA or enrolled agent.
- You have the right to claim other deductions not taken on the original return.
Tips for enduring an IRS audit:
- Gather your records and put them in order.
- Read IRS Publication 1 (Taxpayers’ Bill of Rights) before your audit.
- Meet with your representative before the audit to discuss a plan of action and expected outcome.
- Bring all of the documents listed in the IRS notice you received.
- Be prepared.
- Be polite.
- Be honest.
- Do not volunteer information; present only what is requested.
- Let your representative answer questions from the IRS agent.
- Keep track of any documents and answers given to the agent.
- You can appeal the audit if you disagree with its findings.