No matter how hard you try to avoid an income tax audit, one could come into play at some point. In short, this means the IRS wants to learn more about your tax filing to make sure the information you provided is accurate.
You have every right to be concerned about a tax audit. Of course, this doesn't necessarily mean you will end up owing more money or facing a criminal charge.
Here are some of the steps you should take if the IRS decides to audit you:
- Read the letter in its entirety. If you receive a letter from the IRS about an audit, it's imperative to read it thoroughly from top to bottom. You want to understand exactly what is going on, as well as what will happen next
- Don't get too far ahead of yourself. It's only natural to rush, as you want to put this process in the past as quickly as possible. The problem with this approach is you may make mistakes. When preparing a response, you may need to request additional time to get everything together on your end. This is better than rushing and neglecting to take all of the right steps.
- Don't give more information than the IRS requests. There is no reason to share more than you have to. Stick to what the IRS wants and keep everything else to yourself.
- Don't hesitate to visit a local IRS office. You may be able to hold the audit in your office or home, but it's typically best to meet at the IRS office.
Although an income tax audit may result in paying more money, it rarely leads to criminal charges.
Since you are sure to have a lot on your mind, don't wait to consult with a tax attorney who can read through your audit letter, review your tax situation, ask you the right questions, and help you formulate a plan of action.
Nobody wants to deal with a tax audit, but ignoring the letter won't make the problem go away. If you get the right help, you feel better about how it will be handled and confident that you are putting the matter in the past in a timely manner.