You’ve received correspondence from the Internal Revenue Service (IRS) stating that you’ve been selected for a tax audit. Lucky you. Suddenly, your palms begin to sweat. You feel a knot in your stomach. And you wonder why you couldn’t be as lucky with the Powerball as you have managed to be with Uncle Sam.
Getting audited by the IRS can understandably be stressful and unsettling. However, understanding what follows an audit notice can make the process a little less intimidating and help you to feel empowered early on in the process. If you’re asking yourself “What does it mean to be audited,” here’s a rundown on what to do if you are audited by the IRS.
So, what does it mean to be audited? It means that the IRS has decided to scrutinize your tax return(s) for one reason or another. Perhaps you filed your taxes with a Schedule C, which increases your chances of being audited, for example. Or, maybe you rounded up your deduction numbers, which made the IRS think that you were estimating amounts.
No matter the reason, if you end up getting audited by the IRS, you’ll first need to look at your IRS letter to determine which tax returns the government agency is interested in auditing. The letter will also tell you whether the audit will take place in person or by mail. One that occurs in person can be held at one of the IRS’s offices, your house, your business, or the office of your tax preparer.
Also, if you’re wondering what to do if you are audited by the IRS, look to see what information the IRS wishes to examine. For example, the IRS might want to see proof of your deductions and expenses for a given tax year, as well as statements showing your bank deposits. Finally, make a note of how to reach out to the IRS and the deadline for replying to the audit notice.
After being notified that you’re getting audited by the IRS, it is in your best interest to solicit the help of a tax attorney. Avoid trying to attend your IRS audit on your own. The reason for this is that the IRS may ask you questions aimed at trying to get you to admit that you underreported or overstated your income.
Also, if you’re getting audited by the IRS, make sure that you are as organized as possible before your audit. You should gather your records from your tax return to find the information that the IRS is looking for. Make sure that you provide only those documents that are necessary to support the matter being discussed. Avoid giving the IRS more details than requested. Also, only give the IRS copies of your documents, not your original documents.
If you are getting audited by the IRS, don’t rush into your audit process. Note that as a general rule of thumb, the IRS has about three years from your tax return filing date to complete your audit.
Be sure to let your tax attorney look at any documents you receive from the IRS before you sign them. Ask for copies of the documents you sign.
Note that if the IRS audit reveals that you owe extra taxes, you will receive a bill of the taxes you owe along with any penalties and interest you owe as well. Failure to pay this after one warning will kick start the IRS’s collection proceedings.
Take Advantage of the Help of a Tax Attorney
After you find out that you are getting audited by the IRS, you should get in touch with Delia Law Tax Law Firm right away. At Delia Law, we have extensive experience with addressing serious tax issues, including owing back taxes. For this reason, you can trust us to thoroughly investigate your particular situation and determine what the best solution is for you.
For instance, if you’ve been audited by the IRS where the tax debt goes into collections, and you’re facing wage garnishment, we can help you to stop it. In addition, we can help you to pursue an offer in compromise or another status that can help you to mitigate your tax liability from an audit, in the short and long terms. When it comes to determining what to do if you are audited by the IRS, we’ll focus on achieving an outcome that is ultimately in your best interest.
Contact us today for a free consultation. We’ll help you understand what it means to be audited, advise on next steps, and help you to resolve your tax issue in the most personally favorable manner possible given the circumstances surrounding your case.