It’s a fear that we all share come tax Day: what if I get audited? We don’t necessarily fear an audit because we think we lied on our taxes. Instead, we fear an audit that occurs because of overly-complex tax rules and regulations, or an audit that occurs because of the inefficiencies of the Internal Revenue Service.
So what do you do when you are hit with a tax audit? How do you go about the audit in an efficient and appropriate way, thus eliminating the chance that tax issues continue to rear their ugly head in your life for many months, or even years, down the line?
First of all, the best way to be prepared for an audit is to organize your tax forms and financial information before an audit is even possible. That means that when you file your taxes in a given year, you should make copies of the forms, track the necessary financial elements to your filing, and have evidence and support for your filing. Then, if you are audited, at least you will be prepared with the necessary info.
You will also want to confirm the audit and make sure it isn’t some type of scam. Contact the IRS and confirm the action against you, and then work with them to try to come to a reasonable solution.
While all of this is going on though, make sure you have a tax professional or legal counsel helping you. You want to ensure that your rights are protected, and that any mistakes the IRS may make or any raw deal that the IRS may try to stick you with is properly defended.
Source: Bankrate.com, “How to prepare for an audit,” Kay Bell, Accessed Aug. 15, 2014