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IRS Audit Tips

If the Internal Revenue Service sends you a notice that your taxes are being audited, don't panic. Although most individuals who are audited do end up owing the IRS money, providing the IRS with what they ask for and need can go a long way toward smoothing out the process and making it as quick and painless as possible.

Don't Ignore an Audit Notice

Once you receive an audit notice, don't ignore it. Ignoring an audit notice will only make things worse. In most cases, the IRS asks for a correspondence audit, which simply requires you to get copies of the documents requested and send them back to the Internal Revenue Service. If you use a tax professional or you used tax software to do your taxes which included audit support, contact the company or individual you used to help you get everything you need together. If you have any questions regarding specific documentation, call the IRS, or better yet, have your tax professional do it.

Get Organized

After you receive your audit notice, get everything requested together and organized. Make copies of any documents requested and submit them to the IRS. Do not send your originals. Originals can get lost in the system or the mail, and if anything happens to the originals, you've lost the proof supporting your initial tax return. If you need help getting everything together, be sure to talk to talk to your tax professional.

Keep It To Yourself

If the IRS doesn't ask for something specifically, don't give it them. Don't volunteer unasked for information. Don't bring prior or current year tax returns to your audit unless requested. Bringing extra unneeded data to your audit could give the IRS a chance to find something else wrong with your tax returns, and you don't want that to happen. You also don't want to waste valuable time on small things that aren't worth mentioning.

Meet Deadlines

To keep everything running smoothly, meet the deadlines on all the paperwork. Not meeting a deadline and failing to ask for an extension could result in further penalties and possible legal actions, like the IRS placing a lien against your home. If you know you're not going to be able to get all the paperwork requested together before the deadline or it's going to be a tough squeeze, ask for an extension. It's better to request an extension than to not meet the deadline at all.

Read Up on Your Rights

Despite the prevailing opinion that the Internal Revenue Service can do anything to you, they can't. As a taxpayer, you have rights, including the right to state your case. Remember an audit is like a trial. You get the chance to defend your deductions and exemptions, so make your case. Even as you disagree, be polite. Your auditor is a person too, and a little politeness can go a long way.

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