So You Got An IRS Audit Letter Huh?
Facing an IRS audit is highly feared by most taxpayers but if you are prepared and have a good tax attorney on your side you can survive. Nobody wants to receive the dreaded IRS Audit Letter. Whether you are innocent or guilty, it still strikes fear in people because they have no idea what to expect – one person or one business up against the government? That seems a little unbalanced already, just from a power perspective.
It’s best, of course, to get professional assistance with a tax attorney when dealing with this type of problem. Don’t meet with the IRS alone. After all, you are going into this situation with little knowledge and have no idea what to say or what not to say. If you do have a skilled tax attorney helping you, it will communicate to the IRS that you are taking it seriously, and that they will have to be at their very best to try and prove the case against you.
Keep in mind, the chance you were picked is just random with sometimes there is no rhyme or reason as to who gets selected. And you don’t really have a choice; you are pretty much forced to comply. If you are facing an IRS audit, it’s probably one of three types:
- Office Audit
- Correspondence Audit
- At-Home Audit
How To Prepare For IRS Auditors
Many people are scared to death about being audited by the IRS. One bit of good advice is to perform an audit of your records on your own first. Then you’ll want to do it a second time with the help of a tax attorney. This is a great way to prepare so you know where the potential landmines are, if any. If you are being audited for a specific year, the investigation may expand to other years as the Auditor goes through the records. This is nothing to be afraid of.
Meeting with the IRS Auditors in either their office or tax attorney’s office is the best approach as you never want them stepping foot inside your house. They send their best people out for those audits and it can be very intimidating.
It’s not a surprise that audit rates for every kind of taxpayer have gone up over the past few years. Individual taxpayers have seen a 25% increase. Taxpayers with high net worth have seen their audit rates double. If you are an S-corporation, you may be one of the 5,000 companies selected over the past few years by the IRS for random audit. They are doing everything they can to stay on top of small businesses.
Your tax attorney is responsible to deal with the IRS directly on your behalf. Dealing with an IRS audit can be one of the most stressful times of anyone’s life; don’t face the IRS alone – you need a tax lawyer who specializes in tax law and has successfully represented people before the IRS.