The thought of being audited spikes fear in many, because everyone has heard how daunting the process can be. The truth of the matter is the IRS doesn’t handpick those they will audit, but their computer system compares returns and selects the ones that don’t fit the normal values. For instance, if you had little or no profit from your business or higher than normal use for business vehicles, your return might get picked. If you are audited, you have the right to ask why you were chosen.
If you are picked for an audit, you’ll be given the details. Some audits are done by mail, and others are done in person. If your audit will be done in person, it is important to have representation present. In person audits often include a certain amount of probing by the IRS agent, wherein you are asked specific questions about your financial activity for the year. A representative will protect you by helping you accurately answer your questions, especially where technical jargon is used.
If the IRS audits you, gain representation if necessary. Stay calm, and follow the instructions given to you. It is of utmost importance that you are timely and cooperative throughout the auditing process. Don’t delay in responding to the IRS, because you are only delaying the resolution of your case. If you aren’t ready for a scheduled appointment due to lack of materials, call you auditor and make arrangements. It is best to resolve your case within 45 days; any case that goes on longer requires your auditor’s manager to be involved.
Generally, IRS audits take place on income tax returns filed in the past three years, but some audits go back as far as six years. You will be notified of what specific information is necessary, and if you cannot locate the records needed, contact your auditor immediately. If you are audited, the IRS authorizes the person who prepared your taxes to represent you. This person will likely have a copy of the records needed. At Roberts Tax Advisory, we are committed to smoothly guiding you through the auditing process. Rarely do our clients even need to communicate one-on-one with an IRS auditor. If you are interested in audit representation, please contact us.