You checked the mail and it happened; you received the letter. The letter that no one wants. The letter that means you are going down a path many have traveled, but few have survived. The IRS tax audit. If you filed your taxes correctly and flawlessly, you will easily prove it. But if they find errors or any miscalculations, you are in for a bumpy ride. Here are a few steps you can take to quickly resolve the situation.
Ask Why. Why was your return selected for an audit? You did it correctly, what’s the deal IRS? There can be many reasons for this to happen; here’s a few:
- High deductions compared to your income, inconsistencies with reports from previous years
- If you have transactions with someone else who is also being audited, you will be flagged as well
- Computer programs that automatically flag outlier data
- Random selection
All IRS notice letters come with a notice number that will help you narrow the scope down to specific things being questioned. This way, you can pull only the necessary information for the audit.
How are you being audited?
There are different ways to get audited, believe it or not:
- A Correspondence Audit involves you providing documents such as receipts, checks, and other required material. This is just the IRS asking for more info.
- An Office Audit is where it gets a little more intense. This time you have to go to your local IRS offices and the audit is conducted there.
- If you would them to visit you personally at your office, that can be arranged with a Field Audit.
- The most expensive audit is called the Taxpayer Compliance Measurement Program Audit. In this audit, everything is looked over very closely.
It is extremely recommended to hire an IRS tax attorney to represent you.
Dealing with the IRS can be hectic and nerve-wracking, but with an experienced licensed professional on your side, you can get through the audit stress free. Our tax attorneys represent you in front of the Board of Equalization, the IRS Examination Division and Collections Division, and state income tax agencies.