Getting Through Your Upcoming Audit: 5 Big Tips
Most taxpayers will never experience an audit simply because the chances of getting audited are less than one percent. But, if you’re one of the unlucky few, don’t despair – with help, you can get through an IRS audit and survive. Here are 5 tips for getting through your upcoming audit.
1) Read the Letter Carefully
It’s important to understand what the agency wants from you, so read the letter carefully. Most people who get audited don’t even end up having to meet with an agent – they just have to do a correspondence audit, which requires sending documents to the IRS through the mail. This happens with about 75% of all audits. In these cases, the IRS usually simply needs some backup documents or other questions. Make sure you’re clear on what you need to do and on what documents you need.
2) Don’t Panic, But Don’t Procrastinate
Usually, an IRS audit just means that the agency wants more information about your return, or documentation to back up credits or deductions you have claimed. This is especially true if your deductions or credits are larger than they normally are. It’s also likely that the only thing you’ve done “wrong” is make an error in your calculations. Even if you have to pay a little bit more, you won’t get in trouble unless you intentionally committed fraud.
Don’t panic, and don’t ignore the letter. You might not end up even owing any additional tax liability, but you only have 30 days to address the issue, so bite the bullet, open the letter, and respond right away.
3) Provide Documentation
Hopefully, you kept documentation to support any deductions or credits you claimed on your return. Even if you did keep records, it’s a good idea to double-check your documentation. If you’re deducting medical expenses or charitable deductions, go back to those institutions and ask for their records. Cancelled checks aren’t enough; you need more robust documentation. Provide your 1099. The IRS will be fairly easy on you if you didn’t get one or if you misplaced it–if you willingly withheld it, you’re going to have a problem. You may also need bank statements, sales of assets, documents for any prizes you may have won, pensions, and tax refunds.
4) Do Not Offer More Info Than Necessary
IRS audits are typically narrow in scope. They’re looking for documentation to support specific parts of your return, so try not to widen the scope by providing more information than is needed. Don’t volunteer more information than the auditor asks for and don’t provide any documentation other than what is requested.
If you’re worried you might accidentally say something that triggers more questions or even reasons for the IRS seek more payment, bring someone along with you. Getting through your upcoming audit is much easier with a CPA or attorney that will be able to analyze the questions the auditor will ask, consult your documents, and have concise answers ready for the auditor.
5) Get a Tax Attorney
It’s unlikely you’ll be able to navigate the audit process on your own, especially if you go in to an office audit or the auditor comes to you for a field audit. A tax attorney can help you navigate the complex tax code, and resolve your audit in the manner the best serves your interests. He or she may even be able to deal with the IRS for you, to minimize the stress of the audit process.
There are plenty of IRS scams out there, too. While pretty much any first contact that’s not a letter is probably not a scam, your tax attorney will still immediately spot if it’s a legitimate notice or not.
Experienced NYC Tax Attorney Help: Getting Through Your Upcoming Audit
Tax audits can be overwhelming and frightening. No one wants to risk making a costly mistake. Follow these 5 tips for getting through your upcoming audit and seek out the legal advice of experts. The attorneys of Mackay, Caswell & Callahan, P.C. have the experience you need to help you successfully navigate this process with as little stress as possible.
If you have tax issues or you are facing a tax audit, you don’t have to go through it alone. Let a NYC tax attorney help you. To schedule a consultation, fill out our online contact form or call 844-MCC-4TAX (622-4829). Or speak with an experienced tax lawyer from one of our other offices in Albany, Rochester, Syracuse, Utica, or Watertown today.