Under Audit?

While IRS audits are actually rare, it can be overwhelming when it happens to you. Here are some tips for surviving an IRS audit.

  • Do not ignore the IRS correspondence. IRS audit letters will state what’s being questioned, how to respond and when to respond. It’s important you follow the instructions to provide the information in a timely manner. Ignoring the letter will only result in additional penalties and the IRS will continue to pursue, even if they don’t hear back from you.
  • Lying to an IRS auditor is a criminal offense! Being honest and truthful about your tax reporting is the only avenue. If there was a misstatement on the return, now is the time to fess up!
  • Don’t be bullied. If you disagree with the auditor, you can challenge the decision and dispute the ruling in the IRS Court of Appeals. You also have the right to ask to speak to the auditors superior if you’re concerned about the audit engagement.
  • Stay current on your tax filings. Failure to file returns isn’t going to win you brownie points. Be sure to file returns, even if you can’t pay. Also, if you’re on an installment agreement, be sure to make your payments timely.
  • Be prepared for the audit. The IRS audit letter will indicate specific areas under audit. You should be prepared to support these items and answer questions related to these accounts. Do your homework and be ready. If you need extra time to gather your documents, ask for an extension.

Lastly, remember to take a deep breath and relax… most audits are quite simple and merely require you to supply documentation. If you wish to discuss an audit matter, give us a call.

About Padgett Team

Our firm is a leader in outstanding accounting, tax payroll and business services. Our dedication to the 3 dominating business requirements of Professionalism, Timeliness and Excellence dictate the day-to day service we provide equally to each client. No small business is too small.

Facing a Tax Audit?
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