It is very important that you not only put your case together with evidence, but that you have considered the presentation. If you do not know how to effectively communicate your defence, then the proof you have isn't as good as the paper it is written on.
Firs, you need to make sure you have selected the right person to represent you. You want to make sure that they have experience specifically with the IRS. You should also remember that lawyers, accountants and doctors are tax payers too and may be just as afraid of the IRS as you are. Meet with the person you have selected, and test their confidence. Depending on your situation, you may want an accountant, and attorney or both to represent you.
Once you have determined who will be representing you, or if you will be representing yourself, it is time to prepare the evidence. Make sure that you have found every relative piece of paper and no document is left un-turned. The IRS audit doesn't have to be stressful. A little discipline, time, preperation and knowledge should help you to relax. If you find that you, or your representation, needs more time to prepare, call the agent and ask for an extension. Extensions for IRS audits are generally granted for up to six months, but be aware that the possinibility of a second extension in very unlikely, therefore use your time wisely.
Here is the main documentation that you will need. This is a breif checklist that should help you begin yur document hunt.
Receipts to justify any deductions or credits that the IRS is questioning.
A list of the above reciepts, organized by date and include the amount and reason for each deduction.
A list, organized by date, of all cash expeditures. Treat this list as if it were a reciept for each purchase. List the reason for each expenditure.
Bank account statements organized by month and in order.
Reciepts for income, organized by date.
It is important to only present information that counters what the IRS is questioning. Do not offer up more information then needed and only asnwer direct questions with direct answers. This is one situation where more information is not better. The IRS auditor will give you the reasons for the audit, and a list of the items being audited. Prepare your defence based on that in question.
It is equally important to be well organized. You do not want the auditor to be required to dig through files to find the information he or she is looking for. This may uncover more mistakes or violations for the IRS to audit in the future.
With a little preperation and knowledge, you can get through the dreaded IRS audit.
Showing posts with label Internal Revenue Service deadline. Show all posts
Showing posts with label Internal Revenue Service deadline. Show all posts
Sunday, June 20, 2010
Wednesday, July 29, 2009
How to get through your IRS Audit
An IRS Audit is a stressful time full of tension. Your emotions feel tense and like a roller coaster. At the same time, the auditors deal with dishonest and hostile citizens everyday. While you may feel that an auditor is playing superior because they have limited authority over you at the moment, there are some steps that can be taken to avoid a conflict which isn’t in anyone’s best interest. Additionally, you need to remember the position of the auditor and perhaps why he is expressing himself the way he is.
IRS auditors aren’t generally high paid employees, and their work environments can be stressful since they are dealing with defensive and hostile people everyday. IRS auditors are on deadlines and many times simply finding the person for the audit is diffilcult, causing even more delays, which quickly adds to their caseload. Their goal is to get your case closed out as quickly as possible. Since they are underpaid and deal with other’s attitudes all day, you should expect their morale to be rather low.
With that said, there are ways to alleviate some of the challenge. First, don’t get angry or upset. Try to talk reasonably and logically with your auditor. Explain that you want to get along and assist them with getting this case closed. In the auditors mind, you are the enemy. Try changing that so that you are more a friend than a foe, helping them through they’re mundane and underpaid 9-5 workday.
If that attempt fails, speak kindly to the agent’s supervisor, asking to resolve the issue. Be polite and explanatory. It is the supervisor’s job, just as much as it is the auditor’s, to close the account. If the supervisor sees that you are attempting to work with them to get the case closed, the hostilities should end.
If you are dealing with an aggressive or dishonest IRS auditor, then certainly contact the chief inspector at 800-366-4484 or write to P.O. Box 589, Benjamin Franklin Station, Washington, DC 20044-0589. This is not an interactive investigation however, and you will not be informed of the outcome. While it is rare, some auditors may imply that favors could get rid of your problem. Report this right away, as it is bribery and will do nothing for your position. Either way, your best form of action is to try and assist the auditor in getting your case closed as soon as possible so that you can move on with your life and the pesky auditor will be gone.
IRS auditors aren’t generally high paid employees, and their work environments can be stressful since they are dealing with defensive and hostile people everyday. IRS auditors are on deadlines and many times simply finding the person for the audit is diffilcult, causing even more delays, which quickly adds to their caseload. Their goal is to get your case closed out as quickly as possible. Since they are underpaid and deal with other’s attitudes all day, you should expect their morale to be rather low.
With that said, there are ways to alleviate some of the challenge. First, don’t get angry or upset. Try to talk reasonably and logically with your auditor. Explain that you want to get along and assist them with getting this case closed. In the auditors mind, you are the enemy. Try changing that so that you are more a friend than a foe, helping them through they’re mundane and underpaid 9-5 workday.
If that attempt fails, speak kindly to the agent’s supervisor, asking to resolve the issue. Be polite and explanatory. It is the supervisor’s job, just as much as it is the auditor’s, to close the account. If the supervisor sees that you are attempting to work with them to get the case closed, the hostilities should end.
If you are dealing with an aggressive or dishonest IRS auditor, then certainly contact the chief inspector at 800-366-4484 or write to P.O. Box 589, Benjamin Franklin Station, Washington, DC 20044-0589. This is not an interactive investigation however, and you will not be informed of the outcome. While it is rare, some auditors may imply that favors could get rid of your problem. Report this right away, as it is bribery and will do nothing for your position. Either way, your best form of action is to try and assist the auditor in getting your case closed as soon as possible so that you can move on with your life and the pesky auditor will be gone.
IRS Audits While Filing
If you receive notice for an IRS Audit, and are about to file your taxes for this year, it is strongly recommended that you wait. While this may create some tension and stress, getting through this time can be realtively easy if you know your rights and obligations. Filing a new return can result in that return being audited as well if your case is still open. For right now, file for an automatic extension which gives you until August 15th to file your new return. The automatic extension form 4868 needs to be sent in by April 15th however. To avoid further IRS audit issues, pay all taxes due by April 15th.
Once you have filed for the extension, and the deadline arrives, it is possible that you IRS Audit will still open. If the IRS audit is still going on in August and you are near your automatic extension deadline, file for another extension. This can be done using IRS Form 2688. This form will need to be sent to the IRS no later than August 15th. The second extension will then give you until October 15th to file your return if the extension is granted. Hopefully, the case will be handled and closed out by your the time second extension deadline rolls around.
But what happens if the second deadline of October is quickly approaching and the case is still open? In this case, don’t file your taxes until after the audit is complete. As long as you are not defrauding the IRS and are paying any applicable taxes by deadline, you will not be charged penalties or interest. If you find that you owe more money than what you sent on April 15th , send that in by the extension deadline of October 15th and write a note to apply the monies to your un-filed taxes for the 2008 year, as an example. If the Auditor asks you about your tax return for the current year, let them know that you are not ready to file. An auditor can not make you file your tax return.
The key to any IRS audit is to be educated and don’t be afraid. As long as you are paying applicable taxes and keeping the IRS aware of your status, you should be fine. If you feel that you are over your head, contact an IRS attorney and/or a tax advisor. Either way, the key step is to stay informed of your obligation as well as what an auditor can and can not do.
Once you have filed for the extension, and the deadline arrives, it is possible that you IRS Audit will still open. If the IRS audit is still going on in August and you are near your automatic extension deadline, file for another extension. This can be done using IRS Form 2688. This form will need to be sent to the IRS no later than August 15th. The second extension will then give you until October 15th to file your return if the extension is granted. Hopefully, the case will be handled and closed out by your the time second extension deadline rolls around.
But what happens if the second deadline of October is quickly approaching and the case is still open? In this case, don’t file your taxes until after the audit is complete. As long as you are not defrauding the IRS and are paying any applicable taxes by deadline, you will not be charged penalties or interest. If you find that you owe more money than what you sent on April 15th , send that in by the extension deadline of October 15th and write a note to apply the monies to your un-filed taxes for the 2008 year, as an example. If the Auditor asks you about your tax return for the current year, let them know that you are not ready to file. An auditor can not make you file your tax return.
The key to any IRS audit is to be educated and don’t be afraid. As long as you are paying applicable taxes and keeping the IRS aware of your status, you should be fine. If you feel that you are over your head, contact an IRS attorney and/or a tax advisor. Either way, the key step is to stay informed of your obligation as well as what an auditor can and can not do.
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