Facing an IRS Audit? Take These 3 Steps Immediately

Whenever you file your taxes, there is always that part of you that worries about getting audited. This is particularly true if you run a business, because your tax returns are often much more involved and require much more detail than if you are single person who only needs to file a 1040-EZ. So what should you do if you receive the dreaded audit notice from the IRS? What can you do to look better to the IRS during the audit? Read ahead for our tips.

 

  • Figure out how and why you’re being audited

 

There are several reasons why you might get audited by the IRS and getting a notice doesn’t necessarily mean that there’s a problem. For instance, you could have been randomly selected or your tax return came up in a related transaction with someone you’ve done business with and the actually problem lies within their tax return. Of course, an audit notice can also be indicative of a problem with your return. It can be anything from specific activity (a.k.a. activity which does not match up with what you have reported on your return) to automatic flags (e.g. large charitable donations or a failure to report income).

It’s also helpful to know that there are four different types of audits: 1) Correspondence, 2) Office, 3) Field, and 4) Taxpayer Compliance Measurement Program Audits. Each audit comes with its own set of requirements that will dictate how you are to respond and the procedure that will be followed. Once you know why you are being audited, you are one step closer towards reaching a resolution.

 

  • Gather all of the necessary documents and respond

 

Regardless of why you were audited, the most important next step to take is to get organized. In general, the IRS will provide you with a list of all necessary documents that it will need to conduct the audit. What you need to provide and how you deliver it will depend on what type of audit procedure you are facing. You will also need to make sure that you respond to the IRS’s notice within the time specified. If you find that you need more time to get everything in order, then you can request an extension … just make sure to do that within the original time frame given.

 

  • Get an experienced tax attorney

 

Immediately after receiving your audit notice, contact the tax professional who prepared your tax return. If you prepared the tax return yourself, are facing an audit that requires representation, or are just nervous about the process itself, then it’s a good idea to get in touch with an experienced tax attorney. Tax lawyers can help explain the process and help you get organized. If your audit requires you to respond with certain documents or show up for a meeting, being organized with everything you need will show the auditors that you are responsible and taking the process seriously. It also can prevent the scope of the audit from widening because there is less of a need for the auditor to look elsewhere for the information that they want.

Contact Boeshaar Law for help with your IRS audit

At Boeshaar Law, it’s our business to help individuals and business owners deal with their tax problems. If you have received an IRS audit notice and are nervous about the process, please don’t hesitate to contact Boeshaar Law today!

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Written by Robert V. Boeshaar

Robert V. Boeshaar

Robert V. Boeshaar is a Seattle tax attorney committed to helping individuals and small businesses who are facing problems with the IRS. He believes in using his experience to serve others and to make a difference in their lives.