What You Need To Know About An IRS Audit
Whether it is for a face-to-face or a correspondence audit, you have problems if you receive a notice for an audit from the IRS.
Correspondence Audit The mail is how a correspondence audit is done.
The IRS computers review every tax return and figure out if there are necessary corrections.
If so, a notice is mailed to the taxpayer.
This IRS notice should not be dismissed.
Take action promptly, especially if it says you need to pay additional taxes.
Interest and penalties may be added to the bill with delays.
If you don't agree with the notice, send your reply and attach documents to prove your case.
Keep copies of the correspondence for your records.
Face-to-face Audit If you get a notice requesting you to call for an appointment or specifying a time and date to meet with a revenue agent or tax auditor, you have a face-to-face audit about to happen.
What do I do next?
Correspondence Audit The mail is how a correspondence audit is done.
The IRS computers review every tax return and figure out if there are necessary corrections.
If so, a notice is mailed to the taxpayer.
This IRS notice should not be dismissed.
Take action promptly, especially if it says you need to pay additional taxes.
Interest and penalties may be added to the bill with delays.
If you don't agree with the notice, send your reply and attach documents to prove your case.
Keep copies of the correspondence for your records.
Face-to-face Audit If you get a notice requesting you to call for an appointment or specifying a time and date to meet with a revenue agent or tax auditor, you have a face-to-face audit about to happen.
What do I do next?
- The IRS will take action and mail you a bill if you don't respond within thirty days.
- Follow the directions on the notice to know the specifics of the audit and what information you must bring with you.
- Organize your documents.
You have to prove that your tax return is right.
The auditor's job will be made easy if you go to the audit organized and prepared.
Consider this a plus. - You need supporting documents to present your case, so request duplicates of missing documents right away.
- Do not bring information not requested to the audit.
Inform the auditor that the information isn't available if brought up. - Be calm and courteous throughout the audit.
- Only copies should be provided to the auditor, not original documents.
- "Yes" or "no" are neutral responses to queries.
Sensitive information can be taken from small talk.
If you talk about making a big purchase or having just returned from a vacation, the auditor might find cause to believe that you have not revealed all your income on your tax return.
This might be a reason to expand the audit. - Know that you have a right to an appeal if you do not agree with the audit's outcome.