Filing a tax return is a responsibility that all taxpayers must follow to stay compliant with the IRS. While most people will be able to file their taxes and escape any further inquiry from the IRS, those with more complex tax situations, or certain taxpayers who are simply a bit unlucky, could face an audit from the IRS.
If you receive notification that you have been selected for audit, there are several things that you should do to make the process easier and ensure you get through it without too much difficulty.
Confirm the Audit
Millions of taxpayers every year receive some form of notification from the IRS indicating that specific items reported on their tax return require clarification. While most people may overreact and assume it requires a full-blown audit, there is a chance that the IRS just needs one piece of information to finalize their review. Before doing anything, you should carefully review the letter and confirm with the IRS whether or not you have been selected for a full scope audit.
Gather Information
If it turns out you are to be audited, the next thing you need to do is gather as much information as you have available from your tax records. You will need to collect all of your tax-related forms including your W-2 statements, bank account statements, mortgage account statements, and anything else related to income or any form of tax deduction that you claimed. Accumulating and organizing this documentation as early as possible will lead to a quicker review and determination.
Speak with Accountant
If you hired an accountant to prepare your taxes, or if you paid for an audit support service, you should reach out to your professional representative immediately. They will help you gather the information you need and present it in a format that the IRS is seeking. They will also be able to answer any specific questions that the IRS may have, which can take a lot of the work off of your shoulders.
Be Polite and Courteous
Going through an audit with the IRS is a stressful experience. Furthermore, it is natural to act defensive and bitter toward the IRS agent. However, it would be a big mistake to be impolite or not provide all of the requested information.
Instead, you should focus on being polite and courteous and give as much information as promptly as possible. That will keep you on good terms with the IRS during the entire process and will increase your chances of receiving the most favorable outcome.
Undergoing an audit can be stressful and challenging. However, there are several things that you can do after you get your notification of the audit that will reduce your risk of penalty and make it a less stressful experience. You should contact your qualified tax professional to see what resources are available for you during an audit.
Kohari & Gonzalez PLLC