How To Deal With IRS Auditors
An IRS audit is the taxpayer’s biggest fear. You will begin to question if you did your taxes correctly, even if you paid them honestly. They start fearing that they might end up in prison, or be subject to levies and penalties. Before you fret, though, be aware that there are laws that safeguard you in an audit by the Internal Revenue Service.
After the Congress was lobbied by many Americans complaining about the IRS auditors’ abusive behavior, the third installment of the TaBOR (Taxpayer Bill of Rights) was passed in 1998. This bill mandates the taxpayers to be honestly advised of the kind of action they can expect from the IRS and their rights by the IRS.
A formal meeting between IRS auditor and taxpayer is brought to mind in an audit. More usual than not, though, audits are just done via post. The IRS sends the taxpayer letters about claims in their tax returns, usually requesting further documentation. These are typically resolved quickly if you kept organized records.
They IRS may want to examine the whole return or a part of it. Be sure that you only provide the portion that the auditor asks for if just a part of your tax return is assessed. Well-meaning taxpayers who have provided plenty more documentation than was asked have sometimes encouraged IRS auditors to decide to look at a wider scope of the tax return than they intended. Giving them too much information encourages them to get more inquisitive, and they will ask for even more documentation. This is absolutely not what you want.
The average taxpayer isn’t fit to deal with the IRS, so it’s always advised to get the help of a tax advisor such as a tax attorney or CPA in an IRS audit. It’s also advised to ask for assistance from the actual professionals who prepared your tax returns as they’ll be aware of the particular issues pertaining to your return and can deal with the IRS more efficiently.
The IRS auditor informs you about your tax return’s determined errors when the audit is resolved. Then they’ll officially notify you, the taxpayer, of any financial settlements that need to be made such as paying more money to the IRS in the guise of debt or penalties. In very uncommon situations, a few taxpayers have even received refunds after an audit. Of course, you should probably not depend on this occurring with your tax audit and IRS issues.
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