What To Do If You Have Been Audited

Most Americans have completed this year’s tax return to the best of their abilities. Now for 98% of us that is the end of it for this. What about the other 2%. You are in the unlucky group of people that will be audited by the IRS. Let’s look at why that does not have to be a big deal to you.

First of all understand that a letter telling you that the IRS would like to see you tax records is nothing more than a chance for you to answer any questions they may have.

At one time in your life you will probably be audited because the IRS randomly selects tax returns to audit. In some cases your return may have been flagged for various reasons and you could be audited that way as well.

It is important to keep a record of everything you claim on your return. Any legitimate deductions should be easy for you to substantiate. If you have a question about something talk to a tax professional. Do not try and get away with unauthorized deductions.

You can limit the chances of being audited if you will do a few of these basics.

1. File as late as possible. The IRS has a quota of audits to do every year. The sooner they fill that quota the less likely you will be one of them. By waiting to file your return after April 1st you increase the odds that all of the audits to be done will have been assigned.

2. Sign your return. It is amazing how many people forget this simple thing. If you are a professional person such as a lawyer, doctor, accountant, etc. and you make more money than an average person you may still get audited at a higher rate.

If you are audited relax and get ready. Talk to your tax preparer if you used one. Make sure you have all of your documentation ready if you are asked for it. Choose a time that is convenient for you and then show up on time. If for some reason you get an unfavorable ruling you can appeal to an IRS supervisor.

Remember IRS agents are doing their job. The old scare tactics and stories of the old days does not represent the new IRS. As long as you have been honest and you have kept good records you should have nothing to worry about.