Key Facts to Keep in Mind During an IRS Audit
- Hire experienced tax professionals to represent you during the audit process. Having experts on your side is critical.
- Consult with a tax attorney or accountant to understand the focus of the audit and strategy. Their guidance is very valuable.
- Gather any and all relevant documents and evidence to support your return. Documentation is key.
- Provide concise, clear responses to the auditor. Don’t volunteer extra information.
- Take control upfront and be prepared. Don’t wait until the last minute.
- Request an extension if needed to prepare and get advice. The IRS is often flexible on timing.
- Have the audit at the IRS office if possible. Limit further questioning.
- You can request an appeal if you disagree with the outcome. There are options.
For many, it’s a fear as real as creepy clowns and crawling Critters. And while there’s only a .6% chance of it happening to you, it still remains a stress point for many.
You guessed it, we’re talking about being audited. If you find yourself at some point on the wrong end of an audit you may wonder what happens when the IRS audits you and what to expect from this process.
Fear not. Take a deep breath and read on. We will be going into what to expect from your audit and how to get through it in one piece.
What Happens When the IRS Audits You
While your first reaction to receiving that dreaded envelope may be to panic, stop and take a breather before you begin to worry. Sometimes an audit is not a sign of a big problem at all. In fact, audits can occur due to simple mistakes and can be resolved by simply providing the correct document.
While this might not be the time that you want to hear it, we suggest avoiding any audits in the future by working with a tax professional that knows exactly what to look for and how to avoid such risk.
Gather Any and All Documents
The most common red flag that results in an audit is a large deduction claim that seems out of the ordinary. This may be a result of a natural disaster that hit your home or some unexpected event that resulted in an unusual write-off.
The fastest way to get through this is by providing any and all documents you have related to the claim. You’ll want to provide everything from repair receipts to canceled checks. It should all be used as evidence that your claim was a fact and not an attempted fraud.
Take Your Time
Many are surprised to find that they can actually request an extension on their audit. Here’s the thing, the IRS actually wants you to have your documents together. This means they are typically willing to work with you and give you some time to collect all of your records and any necessary evidence.
Other than cases of major tax fraud or blatant underreporting, the IRS typically has a window of three years to complete an audit from the time that the original tax filing was submitted.
Play the Offense
That is when it comes to where the audit takes place. Unless you’ve been ordered to do otherwise, have the audit meeting in your local IRS office rather than having it in your business or in your house.
This can help you avoid a snowball effect that can lead to panic and further questioning.
Be Prepared
While it helps to research the tax laws and try and get a grip on your audit situation, it’s strongly suggested that you speak with an attorney or tax accountant to get a clear idea of what this audit is based on and how it can be resolved.
Don’t wait until the last minute to look into this. The more prepared you can be the better your chances are of solving this quickly and swiftly. Remember, you always have the option to request time to speak with your tax consultant, even in the middle of the audit.
Keep the Information to a Minimum
While you may want to use this as an opportunity to divulge and explain as much as you can, resist the urge to give the auditor more information than you need to.
It’s the auditor’s job to determine any money that may be withheld from taxes that are legally owed to the IRS. Which is why auditors have been trained to pick up on every little hint within a conversation to find evidence of missing payments.
We suggest you play it safe and keeping your answers as clear and short as possible.
Request an Appeal
Another little-known fact when it comes to an audit is that you can actually request an appeal. Remember, at the end of the day the IRS is just as human as you are, and there’s a chance that they may have made a mistake.
If you truly believe so you can request an appeal within the IRS or even take the case to tax court.
Go to the Professionals
In a world where everything seems like a DIY job, let us be clear…your audit is not one of them. If you didn’t take the time to hire a tax professional while filing, don’t make this crucial error again.
An experienced tax attorney and an accountant are vital assets in your corner to keep you aware of exactly what the auditor will attempt to do, what rights you have, and the smartest way to go about your audit.
The Help You Need When You Need it
While you may be experiencing sleepless nights waiting to see what happens when the IRS audits you, the best thing you can do is take control of the situation by seeking the help you need to get through this audit. As scary as it may be, this is one situation that needs to be faced head-on.
Contact us today to get a clear understanding of your audit situation, what steps to take, and what to expect. We’re here answer your questions 24/7.
Yes, even when you can’t sleep. You’ll find our services are here to provide you with the audit defense you need and to quickly make the stressful event a distant memory.
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