When you receive the IRS audit letter in the mail, it could mean one of two things: One, there could be a serious discrepancy in your tax documentation; or two, it could mean that you were selected randomly by a computer. It’s surprising to many, but getting audited by the IRS doesn’t automatically mean that you are suspected of a tax crime. In some cases, you may even receive a refund, or have any mistakes corrected at no expense.
However, there are many reasons you should consider working with a qualified IRS & tax lawyer in your state, regardless of your tax situation. In this post, our experienced tax lawyers at The Buchalter Law Group will discuss some strategies for overcoming an audit with grace, and keeping your costs to a minimum. We know firsthand how complicated these laws can be, and can act as your mediator and representative with the IRS.
What Are the Main Steps in an IRS Tax Audit?
The first step in any IRS audit is receiving the notification of review. Audits can happen to individuals or to corporations, so if you are involved in multiple businesses, make sure to carefully read all communications and gain a solid understanding of why you are being audited.
Next, the IRS will begin their investigation. Depending on the scope of the discrepancies, this process may only take a few minutes, or it can span up to a year. IRS auditors are trained to treat subjects with courtesy and confidentiality, but because mistakes can and do happen, you are always entitled to legal representation by an authorized agent. During the course of the investigation, you may be asked to perform an in-person interview or review your records over the mail. In either of these instances, you can have someone accompany you or act on your behalf (if authorized to do so.)
Finally, once the IRS has proposed changes to your tax documents, you can either accept them or decide to appeal. Because you only have 30 days to respond to the changes, it’s important to act quickly if you need to file a petition.
Tips for Handling Your Audit Gracefully
Of course, the steps of an IRS tax audit may seem straightforward on paper, but in reality they can be both complicated and overwhelming. The IRS knows that taxpayers are often uninformed about the specifics of tax law, and they can use that to their advantage if they suspect you of wrongdoing.
Below are a few of our best tips to protect yourself during an IRS audit:
- Learn about your rights as a taxpayer. Take some time to review your rights before interacting with the IRS. In 2015, Congress extended rules known colloquially as the “Taxpayer Bill of Rights,” which you can read on the IRS website.
- Don’t volunteer any additional information, and keep your answers concise and to the point. Lawyers are trained in answering specific arguments and focusing on the evidence, which is one of the reasons you should seek legal counsel during an audit. If you do attempt to manage an audit yourself, be very careful about answering questions succinctly. Do not offer any additional fiscal statements or records beyond what the IRS asks you to provide.
- Gather all appropriate records. It should go without saying, but keeping track of your financial records and expenses is a must while you’re being audited. Keep organized and request any information you can find, from receipts to bank statements and documentation.
- Be confident and respectful in all communications. While the IRS can implement aggressive tactics at times, auditors are often highly qualified individuals who are searching for the truth. If you can provide your truth in a confident and polite manner, it will go a long way to aiding your case, even if it turns out that you’ve made a mistake.
Consult with Experienced Legal Counsel on Your Tax Audit
Even when following best practices, individuals who are inexperienced with tax law make mistakes. At The Buchalter Law Group, we have more than 35 years of combined experience in the fields of bankruptcy and tax law. Our Florida IRS & tax attorneys are passionate in the pursuit of justice, and will work diligently to represent your interests if you choose to work with us during your audit.
If you’re being audited, get the legal counsel you need and deserve during this difficult time. Contact us at (321) 320-6088 for a consultation in Brevard County and surrounding areas.