How to survive an IRS Audit

An IRS audit happens randomly, but when it does, being prepared is the best way to combat getting any fines or penalties for your returns. Be very nice to your auditor and think as if you are writing an argumentative or debate paper for college. Your goal is to convince the auditor that you stated all of your income and that all of your adjustments, credits and write-off’s were legitimate and correct. Document everything that you say or do for the IRS auditor. When possible put any correspondence in writing. Only answer for the items in question. Do not volunteer more information than needed. Do not bring or produce any other documents than what is being asked for. Keep your conversation limited, only answering the questions that are being asked by your IRS auditor.

Requesting more time is generally advantageous to you. Postpone the appointments when possible. Don’t overdue it to the point where it looks as if you are non-compliant, but take your time. You shouldn’t feel rushed or act in haste; that is when mistakes happen. Request time to retrieve your records or if extenuating circumstances have presented themselves.

Always select an outise meeting place to conduct field audits. Do not invite your auditor into your home or office. Go to the IRS or perhaps choose a restaurant to meet at. If you feel you are being pressured into having them at your place of business or even in your home, contact the auditor’s supervisor or have your tax professional handle it. If you have a tax professional, suggest meeting at their office if possible.

If the auditor is requesting documents that you do not have or cannot find, you are allowed to re-construct documents. Do not forge anything, simply reconstruct the original amount and other information as applicable.

It would be unreasonable to assume that you aren’t going to get fined or owe the IRS something after an IRS audit. The key is to negotiate the tax issues themselves with the auditor. Do not try to explain why you can’t pay that amount or compromise on the dollar amount. Additionally, you should never use the term unfair or compain about fairness in general. The tax issues themselves are the only things that should ever be negotiated or discussed.

You should always be well advised and educated on the tax law when dealing with the IRS. Look up information, read books etc. If you are still confused, contact a professional to help.