Unlike with most IRS tax actions, you needn’t have done anything wrong, to come under review and have to undergo an audit. Most people panic when they see an audit notice from the IRS in the mail, but even if your tax situation isn’t squeaky clean, your audit doesn’t have to be a horrifying experience if you understand how an audit works and if you have the proper tax help.
- There are three types of audits: field, office and correspondence. If the IRS is only examining one of your returns, this will all happen via mail. Start by returning the notice with any requested documentation, and the process should follow smoothly. With an office audit, you are required to bring documentation to the examiner’s office. When most people hear audit, though, they are thinking of a field audit.
- Many people find it comforting to have a tax attorney advising them throughout a field audit, which can help, since most people are also unfamiliar with their rights during an audit. For instance, you do not have to disclose all of your financial information if it is not relevant to the audit. You also are able to pick a time and place that is convenient for you.
- The examiner will visit and go through any documentation that has been requested. After reviewing your accounts and speaking to your lawyer and yourself, the auditor will give or mail you a 30-day letter that has a copy of the examination report, an explanation of how the IRS wants to change your return, and an outline of your right to appeal. If you agree, you sign and are finished. If you don’t, make sure you appeal the findings within the next 30 days.