Facing an IRS Audit: What Do I Do Now?
With the filing deadline for federal tax returns coming up in just a couple weeks, taxes are on the mind of most working Americans. If you are reluctant to file, you’re not alone. It seems as though most of us wait until the last minute to file our federal returns, either because we forgot or because we hate the complicated process.
There is also another threat that makes people reluctant to file: the dreaded audit. In fact, if you’re reading this blog, there’s a good chance that you are already facing an audit. Although this can be scary and almost certainly won’t be fun, it is survivable – especially if you have help from an experienced professional.
Statistics show that more than 75 percent of individuals who get audited end up having to pay additional taxes. An even worse scenario is being accused of a crime such as tax fraud. Before you think about these potential disasters, however, just try to stay calm and prepare for the audit as best you can.
In many cases, the IRS has up to three years from when the return was filed in which to complete an audit. This means that if you need additional time to get prepared, you shouldn’t be afraid to ask for it.
When you are ready to sit down with an auditor, you may prefer to come to them rather than having them come to you (if this is an option in your area). It can feel very intrusive to have an auditor come to your home or business.
Although you likely have nothing to hide, you also don’t want to offer more information than the auditor has asked for. The IRS has actually created a Taxpayer Bill of Rights, which spells out what you can and should expect when dealing with the IRS. Familiarizing yourself with these rights can feel empowering.
Most importantly, you should not face an IRS audit alone. Auditors won’t take illegal advantage of you, but many auditors may try to give you the impression that your options are limited and that agreeing to their terms is the only way out. Having an experienced tax law attorney by your side will ensure that you know what your rights and options are and that those rights will be respected.
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