You may have done everything by the book. Nonetheless, the IRS has taken issue with your tax returns, resulting in an audit. You may even have to meet with someone from the agency to address any discrepancies.
If this sounds like a nightmare scenario to you, you are not alone. 1 in 4 Americans experience stress over concerns that their tax returns will receive an audit. However, you don’t have to despair. You can prepare yourself for the audit process and take steps to help resolve any underlying tax issues.
What does the audit process look like?
The IRS may conduct an audit in a variety of different ways, including by:
- In-person interviews
The agent conducting the audit will request various documents and other forms of information from the taxpayer. You’re expected to provide this information exactly how it’s requested. Once the agency has this information, they may decide to ask you for further details.
How to prepare for the audit
You don’t have to go through the audit process ill-prepared. Some steps you can take to help things run more smoothly include:
- Performing a self-audit: The IRS will let you know which tax return they intend to audit. You should review this audit and note any items that might raise a red flag. You can also look at the IRS audit technique guide. This guide can help provide you with a rough outline of how the agency approaches audits.
- Gather any relevant records: The IRS is not going to take you at your word. You should gather and organize any relevant records. This will help you better make your case and cut down on the time it takes to resolve your tax issue.
- Limit the information you provide: It’s crucial that you give the IRS what they’re asking for. It’s equally important that you avoid volunteering any additional information. Doing so can open up all new avenues for agents to go down when reviewing your tax records.
Once an audit has begun, you’re going to have to let it run its course. Don’t panic. If you’re unable to clear things up or are concerned where an audit may lead, seek advice from a trusted legal professional.