MISTAKES TO AVOID DURING AN IRS AUDIT
In a tax audit, the IRS essentially sets out to determine if your tax liability exceeds the amount you initially calculated on your return. If you do owe more money than you originally calculated, you may be asked to pay the difference and penalties. If you are in an audit avoid these mistakes.
Ignoring noticesYou can’t just ignore the audit notices until they go away. The
only way to make an audit notice go away is to address it. Make sure you
stay on top of any mail or phone calls you receive to discuss the details of
your audit. If you ignore the IRS, you could end up with higher penalties,
fees, or even criminal charges.
That said, you can usually take your time with requests while staying inside
the IRS’s deadlines. Rushing the audit process can lead to costly mistakes,
while delaying (within reason) can actually take some of the heat off your
case. If you need time to get your records together, ask for more time.
Missing documentsYou should always keep thorough, accurate records of your finances, but it’s
all the more important when you’re being audited. Documents like bank
statements and receipts will help defend your case. If you’ve lost a
document, try checking online or contacting your financial institution to
reconstruct the missing information.
Agreeing to a field auditSometimes the IRS auditor will carry out a field audit at your home or
office. It’s often in your best interest to instead conduct the audit at the IRS
office, where your attorney can control the financial information you relay to the IRS.
Ask your tax lawyer for help in dealing with the auditor.
Volunteering informationYou should absolutely cooperate with the IRS auditor on your case, but you
do not need to offer up any information that is not asked of you. Similarly,
you should not hand over any documents that the auditor has not
specifically requested. Sticking to this policy can help prevent potential
complications in your case.
Doing it yourselfDIY is a nice option when you want to repurpose an old cabinet, but it’s
never a sound legal strategy. An established tax lawyer can help you
properly communicate with the IRS, properly gather the necessary
documentation, explain your choices and possible outcomes, file appeals on
your behalf, and much more.