Handling IRS Auditors

The taxpayer's worst fear is an IRS audit. Even those who pay their taxes truthfully start to doubt if they did it right. They begin fearing that they might end up in prison, or be subject to levies and penalties. Before you worry, though, be aware that there are laws that protect you during an audit by the Internal Revenue Service.

In 1998, the third installment of the Taxpayer Bill of Rights, TaBOR, was passed. After many grievances from Americans to Congress about the rather abusive behavior practiced by many IRS auditors, this bill was passed as a byproduct of those efforts. The IRS is required to truthfully inform the taxpayer of the action performed against them and of their rights by this bill.

A formal meeting between IRS auditor and taxpayer is brought to mind in an audit. More typical than not, however, audits are merely conducted via post. The IRS sends the taxpayer letters relating to claims in their tax returns, usually asking for further documentation. These are normally finished quickly if you kept organized records.

They IRS may choose to examine the entire return or a section of it. Make sure that you only provide the section that the agent requests for if just a section of your tax return is assessed. The IRS end up examining a wider scope of the tax return when well-meaning taxpayers provide more documentation than needed. They'll get inquisitive and ask for more documentation. You don't want this to happen.

Also, most people are clearly not tax lawyers or in any way qualified to deal with handling an IRS agent alone. It is typically a sound idea to bring a CPA, a tax attorney, or some other qualified tax professional to any meeting with the IRS. Call the actual professional who prepared your tax return if you used an accountant or tax service. They can assist in forming a response to the auditor and may understand the particular problems related to your return.

Your audit will typically finish with the IRS examiner telling you about any of the irregularities that they uncovered on your tax returns. You will then be notified officially if you need to pay more money in penalties, debts, or other financial adjustments. In very rare situations, a few taxpayers have even received refunds after an audit. Of course, you must probably not depend on this happening with your tax audit and IRS issues.

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Originally posted 2008-09-21 16:20:17. Republished by Blog Post Promoter