IRS Audit: The Facts

You have IRS problems if you get a notice from the IRS for an audit, whether a correspondence or face-to-face audit.

Correspondence Audit

The correspondence audit done via mail commences with the notice sent to you when the IRS computers find that your tax return has errors, which you shouldn’t dismiss. If you owe more taxes, your prompt action will avoid delays that may add interest and penalties to your back taxes. Mail a response if you don’t agree with the notice, including supporting documents and keeping copies for your records.

Face-to-face Audit

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

What to do?

• Reply in thirty days or the IRS will take action and mail you a bill next.
• The specifics and the documents you need to take with you will be in the notice, so read it well and follow directions.
• It’ll be easier for you to prove your case if you are organized and prepared for the auditor’s inquiries.
• Ask for copies of missing records because you need supporting documents to present your case.
• Don’t bring other documents than what was required. Inform the auditor that the item is at home for questions on information not requested. Typically, whatever is was, it will be dropped.
• Throughout the audit, you should exude calmness and politeness.
• Only copies should be given to the auditor, not original documents.
• Stay on track. Try to answer queries with “yes” or “no.” Sensitive information can be obtained from small talk. The auditor will have reason to believe that you have not reported all your income on your tax return when you speak about major purchases or vacations. This might be a cause to expand the audit.
• Know your rights. Understand the audit process and your rights. You need to learn how to not agree if you think the IRS is in error. It’s better to settle during the audit but you do have the right to request an appeal if necessary.

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