Being selected for an IRS tax audit is scary. This does not mean you intentionally did something wrong on your taxes. The IRS conducts randomly selected audits. However, it is likely that the IRS believes your tax return contains errors. There are several steps to take to prepare for an IRS tax audit:
Get Organized:
Well, this is easier said than done. However, it is important for you to keep all relevant documents together in one place. The most important documents to gather include anything that will support the deductions or exemptions you used when you filed your taxes. This evidence will be essential to supporting all decisions made by you and/or your tax preparer.
Get a list of items that the IRS wants to see before you ever meet with the IRS. If you are having difficulties locating the necessary documentation, try to reach out to the financial institutions or vendors of the missing information. Keep in mind that this will take time and effort on your part, so you should get started as soon as you are notified by the IRS.
Research:
The IRS publishes information about audit processes, the appeals process, your rights as a taxpayer, and other valuable information. You should note that these publications may not exactly reflect how the IRS will conduct your audit, so you should consider the next step.
Find Professional Help:
Using a tax professional will ensure you have a professional helping you. This person knows how to use the law and IRS audit processes to your advantage. Consider this option if the audit involves a large amount of money. Or, if the IRS is auditing due to evidence of questionable activity. Do your research into finding an attorney. Make sure the attorney has experience with tax law and dealing with an IRS tax audit.
Keep It Simple:
Provide only the information and documentation that are requested by the IRS. Do not offer any additional information. Providing extra information may lead to more questions or money being owed. Again, this is another reason why having a tax litigation attorney is helpful.
Extra Time:
If you need additional time to gather information, you are typically able to request extra time. Do not request more than 30 days as an extension. It is not likely to be granted. Granting any will depend on your circumstances and reasons for needing more time.