If you’re about to undergo a tax audit, you probably have a lot of questions. Here are some tips to keep in mind. Depending on the severity of the audit, the process can take anywhere from a few days to a few months. While you may be tempted to ignore the notice, it’s best to take it seriously. You may find that you’re being audited for inconsistencies. Whether your taxes are too high or too low, the process is far from over.
You have the right to ask questions and defend your position. While the auditor will want to hear all of your arguments, don’t try to bargain over the amount of taxes you owe. Instead, negotiate on the tax issues and not the payment amounts. Before the audit, read IRS Publication 1 and do research on tax legal issues. Contact a tax pro and ask them about the audit process. They can assist you in making your case. By following these tips, you can prepare yourself for a tax audit.
Once the audit is complete, the Department will contact you and let you know how much you’ll have to pay. You can appeal any unresolved issues, if needed. If you’ve made the mistake of filing an incorrect return or omitted information, you’ll have an opportunity to appeal the audit decision. As long as you’ve made a good faith effort to comply with the law, it’s possible to successfully navigate a tax audit.
If your business or personal account has a suspicious tax issue, the IRS may want to visit you in person. Auditors will review your accounting records, and may want to tour your business or home. The audit process can take several days or even a week, depending on the complexity of the account. The IRS will also ask to see other items outside of your records, including artwork, financial statements, and business records. However, it’s important to consider all of the information you provide to the IRS, because you may unintentionally give the auditor a reason to extend the scope of the audit.
During a tax audit, you can expect an auditor to question every deduction you claim to be deductible. The auditor will view all deductions as nondeductible personal expenses, and he’ll require valid receipts to prove that you paid them properly. Inflating your deductions to avoid tax liability can lead to criminal prosecution. Fortunately, most audits are routine and noncriminal. You can avoid this risk by following some of these tips.
If your situation isn’t settled on the first try, you can appeal the results of the audit. If you can’t get an agreement with the auditor, you can request a conference with the agency’s manager. In addition, you can request mediation or file an appeal if there’s still time left on the statute of limitations. If you disagree with the IRS’s findings, you may have the right to appeal the results of the audit.
