Receiving an audit notice in the mail can spark concern. But, simply ignoring the letter can have dangerous consequences.
Although there are many reasons why you might have been selected, being unprepared when dealing with the IRS can be devastating. From seized assets to high interest rates and even jail time; the IRS can ruin a person’s livelihood.
Rather than let this happen to you, this article highlights the top tips for facing an IRS audit so you don’t have to fear losing everything.
Know Your Rights
Many are not aware of what their rights are when it comes to dealing with the IRS. Oftentimes, this is simply because they are intimidated by the process and would rather remain unaware. But, being intimidated and submitting to their demands can leave you in a compromising position.
Rather than be concerned, it is vital to educate yourself as to what your legal rights are when dealing with an audit. For example, all individuals undergoing an audit are entitled to receive privacy in their tax matters as well as professional treatment from the auditor.
This means, if you feel like you are being mis-treated or the auditor is refusing to disclose why they are requesting documentation, you are entitled to an appeal. But, in order to appeal the auditor’s decision, you will need to know the time limits that you have to file within.
Ultimately, knowing what you are entitled to can help to avoid disappointment in the results.
Prepare All Documents to Present
One of the most vital things that individuals facing an audit should do to prepare for their case is to gather all of the necessary documents. Individuals who are undergoing an audit should take the time to collect as many receipts, documentation and records as possible.
As well, requesting copies of bank statements, withdrawals and account information to validate your claims should also be prepared. Although gathering these documents and files can be a tedious task, having this information easily accessible can be beneficial. That’s because, you will quickly be able to provide proof and validate your claims.
Create Copies of all Records
Once an individual has gathered all of the necessary records that they will need to present to the auditor, it is also recommended they copies of all of these documents. This means, that individuals should maintain digital copes that have been backed up as well as additional loose-leaf copies.
That way, if the auditor request to keep a document, you can rest assured that you will be able to access it in the future as you have saved it elsewhere.
Hire Professional Help
Rather than risk the repercussions of handling an IRS audit on your own, you should consider seeking professional help. Whether it be an accountant, financial advisor, lawyer or other; having a reputable professional backing up your claims can greatly assist with a favorable outcome.
That’s because, these professionals will have prior experience navigating the audit process. As well, they will be able to speak on your behalf, assist you with gathering the necessary evidence, and dispute any claims.
This can serve in your benefit because they are better equipped to handle tough questions, and will know exactly what documents to present to the IRS. Plus, hiring a professional to come with you to the appointments can help to alleviate a great deal of stress as you won’t need to worry about being alone though the process.
Be Courteous to the Auditor
Regardless of the outcome that the auditor presents, it is always best to remain calm and courteous to the auditor. After all, the auditor will likely respond better to polite professionalism than disrespect. Prior to heading into the meeting, you should take a moment to collect your thoughts and remind yourself to be as professional in the meeting as possible.
Ultimately, receiving an audit notice from the IRS can result in devastating consequences for those that are not prepared. But, there are a number of things that individuals can do to help face the situation, and have the audit be as stress-free as possible.
If you are currently dealing with an audit notice from the IRS, and would like to receive more helpful tips feel free to reach out, and a member of our team would be glad discuss.
