How To Address an IRS Audit

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The IRS conducts two kinds of audits’ the correspondence audit and the face-to-face audit. Your IRS issues may just be starting if you receive notice of one of these two.

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The Correspondence AuditIf the IRS computers find that your tax return has errors, a notice that you should not dismiss will be sent to you, as this starts your correspondence audit or audit conducted via mail. You can avoid penalties and interest from accruing on the taxes that you owe by taking action immediately. Send a response if you disagree with the notice, including supporting documents and keeping copies for your records.

The Face-to-Face Audit  – A meeting between you and a tax auditor or revenue agent is called a face-to-face audit. A notice asking you to call to make an appointment or setting a date and time for the audit will be sent.

What must be done?

  •  – The notice shouldn’t be ignored. If you do not reply in thirty days, the IRS can take action. Your next notice may be a bill.
  •  – Read and follow the directions on the notice. It’ll have information on the items under review and will specify the documents you need to provide.
  •  – Organize your records. It’s your task to prove that the information on your tax return is correct. If you go to the audit organized and prepared for the auditor’s questions, it’ll make the job easier for the auditor. This is an advantage on your side.
  •  – Replace missing records. If you find that the needed records are missing, request duplicates as soon as possible. All supporting records should be available in the audit.
  •  – Information that wasn’t requested shouldn’t be taken to the audit. If it’s brought up, tell the auditor that it isn’t on hand.
  •  – Be calm and courteous in the audit. Only give the auditor copies of your documents, not the originals.
  • “Yes” or “no” are neutral responses to questions. Small talk may lead you to reveal valuable information. The auditor will have reason to believe that you haven’t reported all your income on your tax return if you speak about major purchases or vacations. This might be a reason to expand the audit.
  • If you disagree with the audit’s outcome, you have a right to an appeal.
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