You’re under audit. What now?

Based on over 30 years of experience, we recommend that you do the following during the IRS audit process

1. Review the Audit Notice: The first step is to carefully review the notice of the audit and understand what specific issues the IRS is examining. This information will help you gather the necessary documentation and prepare a defense strategy.
2. Organize Your Records: Organizing your financial records and documentation is crucial in an audit. Ensure that you have all the necessary receipts, invoices, and bank statements for the year under audit. Keep these records organized and easily accessible.
3. Be Honest: Honesty is crucial in an audit. Be truthful in your responses to the IRS’s questions and do not hide any information. Lying to the IRS can lead to serious penalties and fines and even prison.
4. Be Timely: Respond promptly to all requests from the IRS and meet all deadlines. Failure to respond or submit the requested information on time can result in penalties and further scrutiny from the IRS.
5. Be Professional: Conduct yourself in a professional and courteous manner during the audit. Avoid becoming defensive or argumentative, and instead focus on presenting your case and providing the necessary documentation.

Tax Tips: The IRS will notify you by mail of the IRS audit. The IRS won’t initiate an audit by telephone nor they will send you an email.

While an audit is nerve-wracking, the key is preparedness. If you consistently maintain proper records and follow sound accounting practices, you should be able walk away from an audit with no negative impact to your bottom line.