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Wednesday, August 5, 2009

IRS Audit Closing Conference

Out of all the meetings that you have had with the IRS so far, by far the most important to your bottom line may be the closing conference. This is generally performed when you have been part of an IRS field audit. At the closing conference, you can expect for the auditor to present the IRS’ side, and the conclusions from the audit. Additionally, the auditor will likely have a report of any changes that are required to be made to your tax return along with the penalties and interest that are now due. The report will also contain more important information for later research, such as Internal Revenue Code and other legal resources that support the proposed claim.

Do not feel pressured to agree or sign anything on the day of the conference. If you do not understand something in the report, or if you feel it is incorrect or unfair, request more time from the auditor. It is common for someone who is representing him or herself, to request additional time in order to confer with a professional. You may want to set up a second meeting with the auditor. Now that you have the report in hand, your audit team has time to review, research and prepare calculations, discrepancies, questionable issues or arguments on your behalf.

Even after all that work, an audit team and a second meeting to discuss what your audit team found, you may not be able to reach an agreement with the auditor. Don’t get upset, this happens. Since tax laws are complicated and subject to interpretation, there are appellate processes and tax courts that may see things from your point of view. Speak as little as possible, but be polite and straightforward. Inform the auditor that you and/or your company may want to exercise it’s right to an appeal and/or to tax court. End the meeting on good terms and even shake hands.

Remember that it is not the IRS’ job to make your life difficult. It is their job to enforce the code that makes each of us responsible for taxes equally. There position’s makes the tax code fair and even across the board. Simply cooperate the best you can and if you cannot come to an agreement, simply appeal it. While this may be easier said than done, it is worth trying and may prevent a headache in the meantime.

2 comments:

  1. Very nice post, thanks for sharing the information. Keep up the good work.

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