IRS Audits and You
The Internal Revenue Service (IRS) has given you notice that you’re going to be audited. It’s a huge concern. Now your private finances will be perused.
Read the IRS notice before you take action. That’s how you will know what the bureau demands. Know the facts, including what period they’re auditing, the kind of audit they are conducting, and what documentation they need from you. Also, take note of your deadline to reply, which is normally thirty days.
Try not to provide extra information while on audit. These may prompt them to investigate you more. Your goal is to stick to disclosing information on the exact period and documentation being audited.
The following documents can help you support the information you gave on your tax return:
- Bank statements
- Cancelled checks
- Deductions claimed on the tax return receipts
- Report of income statement
- Payment verifications for your mortgage, property tax, donations, etc.
It may take you awhile to get all documents gathered, especially if you have to get them from other institutions, so don’t wait until before the audit to start getting organized.
The auditor’s questions should be answered honestly while being audited. Do not talk too much because auditors know how to look for signs of nervousness and lying. Benign sentences, such as Yes, No, I don’t remember, I’ll have to check on that, What exactly do you want to see?, and why would you like to know? are the best responses.
The documents specified on the IRS letter have to be the only documentation you should provide. Do not take anything else with you. You can just state that certain information is not on hand if questions arise concerning another tax year or about documentation that was not requested on the notice .
Settle the what you owe and consider your IRS issues over if you agree with the outcome of the audit. If you don’t agree with the outcome, you have a right to request an appeal.
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