If you get a letter from the IRS, do not take it personally. The government just wants to make sure your return is accurate. However, it does mean it is time to make sure you have all of your documentation and supporting records in order.
The IRS conducts audits in three ways:
1. By Mail. You will be required to mail a form or additional information to the IRS.
2. At an IRS facility. Typically, you will bring your receipts, records and other documents to substantiate what is on your tax return.
3. At your home or business. An auditor visits your home or business to verify your return.
To get through an audit smoothly consider the following common-sense rules:
• Consider hiring help! You can be represented by an attorney who has experience in IRS Audits and processes, a CPA or a federally authorized enrolled agent.
• Know your rights. Before your audit, read “Your Rights as a Taxpayer” in my Tax Library.
• Be Honest. Lying to the IRS can trigger heavy fines and even jail time.
• Get organized. You will generally have more credibility if you can answer questions and produce what is asked of you. If you need time to get your act together, you or your representative may typically request a postponement.
• Stick to the topic. Whether you are answering a question or responding to a request for records, only give the IRS what it requests.
• Take notes. Keep track of the examiner’s questions and your answers.
• Be courteous. Do not be hostile. If you think you are being treated unfairly, share your feelings with the examiner’s supervisor.
• Consider an appeal. If you disagree with the auditor’s findings, you might first try talking to a supervisor. You can also send a protest letter to the IRS Office of Appeals within 30 days of receiving the report.
An Enrolled Agent and U.S. Tax Court Practitioner, I represent taxpayers in front of the IRS and the U.S. Tax Court on self-prepared tax returns and tax returns prepared by other tax preparers. I handle CDP hearings, collection cases and contested issues in IRS audits. With more than three decades of experience working with small individual returns to large, multi-company and multinational companies returns I have a broad breadth of experience and am in the position to help you.
As an Approved Continuing Education Provider, I am available to speak to organizations throughout the United States on Tax and Tax Research issues.
1 comment on “You Are Under Audit – Survival Tips”
When you receive an audit notice, the first thing a taxpayer should do is contact a tax professional. DO NOT SPEAK WITH THE IRS DIRECTLY. If the matter is simple, such just requesting a backup document or a math error, then you can handle it. If you speak directly with the IRS you could damage your case, particularly if there is any potential criminal or fraud issues. All businesses should contact there tax attorney prior to any response.
Ronald J. Cappuccio, J.D., LL.M.(Tax)
http://www.TaxEsq.com
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