What to Do in Case of an IRS Audit

The two types of audits done by the IRS are face-to-face audit and correspondence audit. Your IRS issues are just starting if you receive notice of either of these 2.

Correspondence Audit

The correspondence audit done via mail commences with the notice mailed to you when IRS computers determine that your tax return has errors, which you shouldn't dismiss. You can avoid penalties and interest from accumulating on the taxes that you owe by taking action immediately. If you disagree with the notice, mail your reply with supporting documentation, and most importantly, keep copies for your records.

Face-to-face Audit

You know you have a face-to-face audit coming up if you get a notice specifying a date and time to meet with a tax auditor or revenue agent or asking you to call them for an appointment.

What do I do next?

• This notice should not be ignored. The IRS can take action if you don't reply in 30 days. Your next notice might be a bill.
• Read and follow the directions written on the notice. You'll be told which items are under review and the documents you will have to bring to the audit.
• Organize your records. You have to prove that your tax return is correct. The auditor's job will be made easy if you go to the audit organized and prepared. This is a plus.
• You need supporting documents to present your case, so request duplicates of missing documents right away.
• Information that was not requested should not be taken to the audit. If information that wasn't required is brought up, tell the auditor that it's not on hand.
• Leave attitude at home. Be polite and courteous even if the auditor isn't. This will work to your advantage.
• Keep all original documents. Have the auditor make copies and return the originals to you if you're made to bring them.
• "Yes" and "no" are neutral replies to queries. Sensitive information may be obtained from a friendly discussion. If you talk about making a big purchase or having just returned from a vacation, the auditor might find a reason to believe that you haven't revealed all your income on your tax return. This might be a cause to expand the audit.
• If you do not agree with the audit's outcome, you have a right to an appeal.

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