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Surviving a Tax Audit

on Tuesday, 30 May 2017. Posted in Doctor of Fitness

The image of IRS agents gobbling up your hard-earned assets and selling them at auction may have flashed through your mind when you received that sweet love letter from Uncle Sam, but it doesn’t have to be the end of the world.

The first thing to understand is the letter itself. Read it carefully and pay particular attention to what’s being audited and for which tax year. Another thing to watch is the return instructions.  Unless they state differently, any correspondence should go to the office it came from, not to a general IRS address. 

Make sure you have your records as organized and as detailed as possible. Precise, accurate records can be your best defense against an audit.

Don’t answer any question unless asked, and don’t volunteer any additional information. Also, don’t provide any additional records unless they pertain specifically to the audit.

Don’t ignore the notice. When you hear about IRS agents seizing assets or placing a lien against a tax payer, it’s usually because the taxpayer has already ignored the notices for an extended period of time.

Whenever you provide documents to the IRS, make sure they are copies, not the originals. The IRS has a habit of losing things. 

Most importantly, if you don’t feel comfortable dealing directly with the auditor, consult a tax professional as quickly as possible. They can often ensure a better outcome to the audit.

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