I just received an audit notice from the IRS. What am I supposed to do?
UPDATED: December 16, 2019
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If you have received notice of an IRS audit, you should contact the IRS revenue agent assigned to your case and schedule a mutually convenient time to meet. Because you bear the burden of proof, you must show that your records and tax returns are correct, accurate, and complete. If you cannot prove your income and deductions were correctly filed on your tax returns during the audit, you will be assessed additional taxes. Therefore, it's important that your tax returns and records are organized and easy to follow.
How Does the IRS Select Audits?
Believe it or not, people who are audited may not have any mistakes on their tax returns. One of the primary ways that tax returns are selected for audit involves somewhat random selection of tax returns based on an IRS computer program. Additionally, the IRS may audit your return if your income forms don’t match your filed return. Finally, if a person or business you reported was subject to an audit, there is an increased chance that you will receive an audit notice as well.
Steps to Take After Receiving Notice of an IRS Audit
First, always respond in a timely manner to all IRS audit notices. This includes letters and phone calls. If the IRS does not offer you a method of response on the forms that they send out, type out a separate letter with a detailed explanation of your answer. Also, always include your tax ID number and contact information on all responses to the IRS.
Typically, if issues are unable to be resolved through letters, the IRS will request a formal audit with a local IRS agent. During this audit, you’ll be expected to present your full financial records and tax returns for the income in question and you’ll need to show that your filed tax return is correct.
Sometimes the mistakes addressed in the audit may need to be fixed by someone you have done business with. For instance, if a 1099 form from a contractor is too high you’ll be responsible for attempting contact the contractor and correct the form. If you are unable to contact the business or person in question, the IRS may attempt to contact that individual as well.
Getting Legal Help With an IRS Audit
For more information on filing tax returns and the audit process, contact a tax attorney for a consultation. An IRS audit can be stressful and time consuming, but needs to be done right to avoid penalties and additional taxes. Get the appropriate assistance form an experienced tax specialist to manage your audit.