Knowing exactly what to do if you get audited will depend on the nature of the audit examination. Correspondence audits are handled much differently that field examinations or office visits.
Most IRS audits are correspondence audits where you’ll receive a letter explaining what problems may exist and the IRS determination of what the corrections will be and the taxes you may owe. You may be able to simply read the letter and determine if you agree with the proposed changes.
- If you agree with the proposed changes, simply sign and date the proposed changes and include your check for any amounts owed.
- If you don’t agree with the proposed changes, you may simply reply that you don’t agree and provide information in support of your position. However if the issues are complex, you’re almost always better off to request a face-to-face meeting with an IRS examiner.
Field Examinations and Office Visits
Other audits require an office visit (where you are instructed to call to schedule an appointment with the IRS to discuss your return) or a field examination (where the IRS will visit you) to review your tax return(s). Recommended steps are to:
- Consider hiring a tax professional to represent your interests;
- Call to delay the audit to allow you additional time to gather your records;
- Refigure your tax return by comparing the information reported to your records;
- Look for other deductions you may have missed;
- Research any tax or legal issues that you were unsure of, or were questionable;
- Assess your tax risk on each of these issues
Often many taxpayers incorrectly believe that if they’re good, honest, people, they can somehow befriend the tax examiner and everything will be all right. This is just simply not true.
The IRS tax examiner is simply doing his job. His job is to protect the government’s interests and collect additional taxes from you that you may owe. Tax examiners are skilled and experience in their techniques and will strive to collect information that can be used against you.