Audit Goals

You have just gotten word that you are being audited by the IRS. Great, now the bureau will be digging into your finances. If you thought you had IRS problems before, now you really do.

Read the notice first. That's how you'll know what the bureau wants. Remember the period they're auditing, what type of audit they're doing, and the documentation required from you. Also, remember your deadline to respond, which is typically thirty days.

In an audit, it's best not to disclose unnecessary details. These may encourage them to scrutinize you further. Your goal is to stick to providing information on the specific period and documents being audited.

A paper trail can support your tax return information, so gather these documents for the year being audited:

• Bank statements
• Your cancelled checks
• Deductions claimed on the tax return receipts
• Income statement report
• Payment verifications for your mortgage, property tax, donations, etc.

It may take you awhile to get all these documents gathered, especially if you have to get some of them from other institutions, so don't wait until just before the audit to get organized.

The auditor's questions must be answered truthly while on audit. Auditors know how to look for evidences of nervousness and lying, so do not talk too much. Benign sentences, such as Yes, No, I don't remember, I'll have to check on that, What specifically do you want to see?, and why would you like to know? are the best replies.

Only provide the documents requested by the IRS on the notice you got. It may cause more harm than good if extra documentation is presented. If the auditor asks you about a different tax year or a document that was not specified on the notice, simply tell them that the information is not on hand at the moment.

If you find the audit outcome agreeable, settle the tax liability and your IRS problems will be solved. But you have the option to ask for an appeal if you are not happy with the results.

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Originally posted 2007-12-31 04:23:32. Republished by Blog Post Promoter

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