When you are looking to manage your taxes in a way that works, you will need to be aware of everything that can come your way.
An IRS tax audit is something that many people fear. Rather than letting this keep you up at night, you’ll want to learn the ins and outs of an audit and what it involves.
Read on and use these strategies to get the most out of an audit, should you deal with one.
What Does an IRS Tax Audit Involve?
To understand what an IRS tax audit involves, make sure you do your research and understand what steps are taken. Whenever you are going to get audited, it all starts with written correspondence.
If you get a voicemail from someone claiming to be an IRS agent, keep in mind that this is a common scam today.
The IRS will send you a certified letter to let you know an audit is taking place.
During an audit, an IRS agent will go over your tax return and any records that you send them to see where an error or fraud may have taken place. Be sure that you respond quickly to get the ball rolling on the process one way or another.
Why Do People Get Audited?
Audits happen generally when something on your tax return does not add up.
In many situations, an audit is simply because you made a mistake on your taxes.
Each year, less than 1 percent of filers get audited, and these audits generally do not account to penalties. Because of this, you shouldn’t panic and feel as though legal issues are coming.
In most situations, the IRS will simply adjust your taxes if it looks like it was due to an error rather than intentional deception.
Audits typically happen due to random triggers based on certain factors. By understanding how they come about, you will be able to take the next appropriate steps.
Tips For Dealing With an Audit
When you get audited, it’s important that you take the appropriate steps. Follow the strategies below to get the help you need:
Hire an Accountant and a Lawyer
Your first step to get through an audit should be to hire an accountant and a lawyer.
These professionals will comb through your records with a fine-toothed comb and will assist you in every matter. They will help you to prove your assertion and avoid any penalties from the IRS.
Since the IRS agents are accredited accountants, you need some pros on your side with the same credentials. A credible accountant will cost you between about $150-$400 per hour, so shop around.
Make sure to also touch base with a financial attorney that can protect your interests.
Pull Together All Your Records
To be safe during your audit, it is crucial that have all of your records available and intact. This will be the evidence that you need to back your claim and prevent any further penalty from the IRS.
Make sure that you furnish them with copies rather than originals because many people complain that the IRS loses documents.
You can’t afford to have them lose important information that you need to protect you from an audit. Send copies to your legal representation and accountant to make sure everything stays organized.
Try to Push Back the IRS Audit
Bear in mind that you also have a lot of say in this IRS situation. Specifically, you have 3 years for this audit to play out.
You and your representation have every right to push the audit back as long as it falls within this timetable. The more you push it back, the more this plays in your favor.
Pushing the audit back gives you time to come up with the best evidence and information, and also increases the IRS’ desire for a swift resolution. Exercise this option and never feel rushed when audited.
Never Volunteer Unnecessary Information
In the same way that you should never speak without a lawyer present when you get arrested, keep in mind that everything can be used against you with an IRS tax audit.
Never volunteer any information that is not relevant to your situation and don’t offer detail. Speaking flippantly can put you in jeopardy and damage your chances of successfully dealing with the tax audit.
Decide Whether or Not You’d Like to Appeal
Take the time to get on the same page as your accountant and attorney to be sure you’re taken care of.
You’ll have two choices with an audit — defending yourself or appealing the audit as a whole.
If you feel that the audit in itself is erroneous, you and your team can put together an appeal. When you work with your lawyer, they will help you to create a defense strategy that serves you.
Regardless of what you decide to do, you and your team will need to be on the same page every step of the way. Stay in touch and meet with these professionals to be sure you are looking after your best interests.
Get in Touch With Tax Professionals That Can Help You
With these tips in mind, you’ll need to touch base with tax professionals that can serve you. We are happy to help you whenever you need assistance.
Get in touch with us to learn more about tax law, and contact us if you need help with a tax audit or any other issues.