Surviving an IRS Audit | Tips on Getting Through the Audit Process

by Victory Tax Solutions on February 23, 2014 in Blog

An IRS Audit is a review of your financial information to determine if the tax reported on your tax return is correct. The IRS may request you to produce various documents to confirm information reported on your tax return. For example, your Audit Examiner may request receipts or statements from charitable organizations to show proof of reported charitable contributions.

To facilitate the audit process it is important to keep the following tips in mind:

  • Retain all records. It is very important to keep tax records used to prepare your return. This includes receipts, mileage logs, bank statements, cancelled checks etc. The IRS normally request that you retain records for at least 3 years; 6 years for payroll documents.
  • Organize your information. It is important to maintain your records, but your IRS Examiner still has to decipher those documents. Therefore, you must organize your records in a clear format. For example, you can give your IRS Examiner a list of the documents you will be providing.
  • Be aware of deadlines. The IRS will give you deadlines to respond to each phase of the audit process. Note those deadlines and try to meet any request by each deadline. Missing a deadline can result in the IRS proceeding with the audit based on its own determination – with no input from you. As a result, you will lose opportunity to defend the information reported on your return.
  • Know your rights. It is your right as a taxpayer to receive professional treatment from your IRS Examiner. It is also your right to know why you are being audited. Additionally, you always have the right to be represented by an authorized representative.
  • Maintain your composure. The audit process can be very stressful. It is important to approach your IRS Examiner with respect and courteousness to ease the process along.
  • The audit is not the final say. If you disagree with the audit findings at the conclusion of the audit, you still have alternative routes. 1) Formally request that he audit is reopened to review your information and provide additional information, 2) Request an appeal, or 3) Pursue a fast track settlement (for businesses).

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