Before getting started today, a reminder that you should read my disclaimer.
Tax time is not something that anyone looks forward to, but it’s something that can be expected year after year. Some of us may pass off our taxes to have a professional take care of, while others may decide to tackle the task on our own. Once they are finished and filed, we can breathe a sigh of relief.
However, once you’ve finished filing your taxes, there is always a chance that you might be subject to an IRS tax audit. An audit is when the IRS takes a closer look into your tax return due to errors or information that might cause a red flag in their eyes. Fortunately, the odds are in your favor: less than one percent of American taxpayers were audited in the past tax year. But if you reported high income on your taxes or are self-employed, your chances of an audit are higher. The IRS wants to ensure that you have recorded your information accurately.
So, what to do if you’ve received a letter of notice from the IRS for a tax audit? Although each situation is different, here are dos and don’ts to keep in mind to help you survive the audit. Here are a few factors to consider:
Do research help
A tax debt relief service can help with IRS tax issues, such as auditing, and alleviate anxiety surrounding the situation. Industry professionals are familiar with tax terminology and forms. They are well-attuned to the types of tax problems that typically arise and know how to efficiently and effectively find a resolution.
Don’t forget to review the notice
If you receive a notice from the IRS, your first instinct might be to just send whatever is necessary to make the problem go away. However, it’s important that you read the notice through carefully because, believe it or not, the IRS can make mistakes too. Make sure all the information matches, all deductions are accounted for, and redo the math to see if the error is able to be duplicated.
Don’t put off the inevitable
The tax audit will occur no matter if you throw away the notice or not. You can’t ignore the IRS, so the best thing to do is face the situation head on and resolve it. Mark time in your schedule to take care of it and avoid putting it off until the last minute.
Do provide information requested
Again, many times the issue that instigates an IRS tax audit comes down to a single error somewhere that needs to be verified. The IRS will request specific information, which you should provide for them, but resist the urge to send everything tax-related document you have. It can slow down the process and may further contribute to the problem. An expedited delivery will help ensure all important documents reach your agent in a safe and quick manner.
A tax audit can come in three different forms: office exam, field exam, and correspondence. The first two types require an in-person meeting with an IRS representative, either at their office or your place of business. The last type of audit is the most common and it gives you a chance to compare your information to the notice or have a tax debt relief professional take a look at it for you. In any case, make sure that you cooperate accordingly and that you don’t let the fear of an audit overwhelm you.