Some people file their tax returns with a slight sense of dread. What if I get audited? I haven’t done anything wrong. Luckily, if you are organized, there is nothing to fear from an audit from the Internal Revenue Service. In fact, they may have noticed an error in your favor. Keep reading to learn the three steps to dealing with an IRS audit.
Steps to Take
Being audited by the IRS is never fun, but with a professional on your side arguing your case with passion and in-depth knowledge of the tax code, it is easy. Let’s take a look at the steps you need to take to handle this situation.
Open and Read the Notice
You’ve probably already taken this step. If so, you’re doing great! Most audit notices give you only 30 days to respond, so it is important to not delay once your notice arrives in the mail. If you do not respond, the IRS can take steps such as adjusting your tax liability automatically. If the change is not in your favor, the next correspondence you are likely to receive is a bill.
The audit notice brings to your attention which items the IRS is examining. Knowing which forms or line items are being inspected helps you know which information you need to gather, so you can validate the questioned items.
Organize Your Records and Replace Missing Records
If you don’t want to go through your IRS audit alone, seek professional help. Here is what you will need to bring to your consultation.
- A copy of the audit letter you received from the Internal Revenue Service. This includes any Forms 4564 (Information Document Requests) you find attached to your letter.
- All documents or information requested by the Internal Revenue Service.
- A copy of the tax return being questioned.
- Copies of the two prior years’ returns before the return being questioned.
- A duplicate of your most recent year’s tax return if it is not the return that is being audited.
- A copy of all documentation, if applicable, that you provided to your tax preparer. If you did not have a professional file your taxes, bring in all documentation you used to file your own taxes.
- Any documentation showing prior years’ audit results, if applicable.
- A copy of any further letters or notices from the Internal Revenue Service you have received for the tax year being audited.
It is critical that you only bring copies of requested documentation. If you must bring original documents, make copies during your meeting and only give the auditor the copies. If your original documents are lost over the course of the investigation, you are left holding the bag. The IRS is not liable, even if their agents are the ones who lost the documentation.
Remember Your Rights
At the end of your audit, the IRS will close the case and recommend either adjustments or no changes to your return. The Internal Revenue Service will send you a report of their findings and a letter that gives you 30 days to appeal the decision if you disagree. This is known as the 30-day letter. Besides sending a letter, you may also request a conference with the IRS Appeals Division.
However, it is best to get expert help before and during your audit, because the appeals officers have even more experience and familiarity with tax law than the agents with whom you meet during your audit. If the Internal Revenue Service is on the correct side of tax law, you will not have a very good chance at a successful appeal.
Dealing With an IRS Audit: The Bottom Line
There is nothing to worry about if you get audited by the IRS. For professional help with your upcoming tax return audit, contact Geaux Tax Resolution today. We make dealing with a tax audit simple and pain-free. We can’t wait to help you!