The year 2006 was unique in terms of the unusually high number of tax audits. That year, the tax code underwent some major changes that in turn led to the high number of audits. If you have recently been notified that your old return from 2006 is about to get audited, here are some tips for you to handle this audit process.
Firstly, retrace your tax papers for 2006 with all the relevant documents like receipts, correspondences etc. You should be saving your past tax filings for at least the last 10 years (longer if you are doing business for yourself). Go through your receipts again to see if you need to order any copies from the retailers. Remember, if you don’t have a receipt, you cannot get the tax break that goes along with it. Because of the revamp of the tax code in 2006, you should try to bring as much information as you can from that year with you to your audit.
Secondly, it matters how you relate to the IRS peronnel. You need to stay calm, stay courteous, and be polite at all times. Remember not to take things too personally. The IRS guys are simply doing their jobs and asking the same pointed questions that any auditor would ask of anyone who is getting audited. No one is trying to make life difficult for you so you should not make it difficult for yourself by being uncooperative with the IRS auditors.
Now here’s an important tip. Answer all the auditor’s questions honestly, fully and in a straightforward manner. But you should not volunteer information that is not asked of you. This is an audit not a yarn with your best friend. Make sure you smile a lot, laugh a few times, and be done with it. But this does not mean that the IRS auditor is your personal friend. This is a professional encounter and it should stay that way.
Finally, make sure you have all your original documents like receipts with you. Give the IRS only copies, never the originals. You must always keep the originals of everything, including all of your receipts. It is not uncommon for the IRS to lose things on a regular basis and you will be better off keeping your originals just in case you need to send them in again.
In conclusion, surviving an audit is not nearly as difficult as it may seem, as long as you behave properly, don’t divulge any additional information, and stay cool.