Filing a tax return is a responsibility that all people need to follow to stay current and compliant with the IRS. While most people will be able to file their taxes without any problems, those with more complex tax situations, or are simply a bit unlucky, could face an audit from the IRS.
If you receive notification that you are to be audited, there are several things that you should do to make the process easier and ensure you get through it without any penalty.
Confirm the Audit
Millions of people every year receive some form of notification from the IRS that is calling something into question. While most people may overreact and assume it requires a full-blown audit, there is a chance that they just need one piece of information to finalize their review. Before doing anything, you should carefully review the letter and confirm with the IRS whether or whether or not you’re going through a full audit.
If it turns out you are to be audited, the next thing you need to do is gather and provide as much information as possible. You will need to collect all of your tax-related forms including your W-2 statements, bank account statements, mortgage account statements, and anything else related to income or any form of tax deduction. Having all of this organized and ready for the IRS will lead to a quicker review and determination.
Speak with an IRS Enrolled Agent, CPA or Tax Attorney
Don’t assume that your ‘accountant’ is qualified to represent you before the IRS. Many tax preparers in the South Florida area aren’t even authorized by law to prepare your tax return for a fee.
If you hired an Enrolled Agent, CPA or Tax Attorney to prepare your taxes, or if you paid for an audit support service, you should reach out to them immediately. They will help you to gather the information you need and present it in a format that the IRS is seeking. They will also be able to answer any specific questions that the IRS may have, which can take a lot of the work off your shoulders.
Be Polite and Courteous
Going through an audit with the IRS is a stressful experience. Furthermore, it can be easy to feel defensive and angry towards the IRS agent. However, it would be a big mistake to be rude or not provide all the information they are seeking.
Instead, you should focus on being polite and courteous and give as much information as promptly as possible. That will keep you on good terms with IRS during the entire process and will increase your chances of receiving a satisfactory review.
Undergoing an audit can be stressful and challenging. However, there are several things that you can do after you get your notification of the review that will reduce your risk of penalty and make it a less stressful experience. You should contact your qualified tax professional to see what resources are available for you during an audit.
I am experienced and licensed to represent individuals and businesses in virtually all IRS or Florida Department of Revenue tax audits.
Ray Haselman, BBA MBA