When you find that IRS audit notice in your mailbox, you are likely to panic. Have you made a big error on your return? Were you accidentally dishonest, and are you going to have to pay an impossible sum to amend the mistake and find tax relief? The best thing you can do at this point is take a deep breath and follow the next three steps for understanding IRS audit notices:
- Start by slowly reading the tax audit notice. Look for the year for which you are being audited, and note which forms or schedules the IRS is looking to re-examine. You should also note the list of documents and records that the IRS wants to see, and the date on which the audit is to take place. Some audits don’t take place in person, at all, but merely require you to mail in a document or two; and you are not required by law to divulge all of your information — only the information that is being requested.
- Next, figure out where the audit will take place and look at your calendar to see if you will need to change the location. If the audit is simply a correspondence or mail-in audit, this is a moot point. If it isn’t, you will either be required to visit an audit office, or an IRS agent will be coming to your home to perform the audit.
- Finally, you will most likely want to contact your tax attorney and ask them to be present at the audit, for peace of mind. We recommend requesting this, as tax attorneys deal with audits on a daily basis, and he or she won’t be hindered by stress or worry like you might be. They also know the rules of an audit, and will be able to protect you from unfair or arbitrary requests that may be made by your auditor.