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How do you deal with an IRS audit?

On Behalf of | Nov 29, 2021 | Uncategorized |

Millions of tax returns undergo routine processing and the filers never face any scrutiny from the Internal Revenue Service. However, some tax returns receive closer examinations. Texas residents might feel surprised when an audit notice arrives in the mail. After the initial shock subsides, a taxpayer could take steps to prepare for the audit. Effective preparation might make dealing with an audit less stressful.

Preparing for an IRS audit

Sometimes, proper record keeping could keep someone out of trouble. An IRS audit letter might ask for proof of charitable deductions or business expenses. Providing copies of receipts could be all that’s required. Hopefully, the taxpayer complied with IRS rules to keep records.

Perhaps it would be beneficial to audit yourself when filing a return. That is, copies of all evidence necessary to support information on the return could be compiled and stored.

Whatever issue the IRS has with the return, expect details of those concerns to appear in the IRS’ audit letter. The agency would likely request specific evidence or records to address issues the IRS finds questionable.

Going through the audit

Often, audits end up resolved through the mail, but face-to-face meetings happen, as well. A taxpayer may wish to bring an experienced, professional representative to such an audit.

No matter how the audit works or what evidence goes forward, the IRS employee could rule against the taxpayer. Taxpayers may need to realize that the results of audits could face appeals or even challenges in tax court.

IRS employees make mistakes, and their errors could even go against rules in the tax code. Improper or incorrect decisions may end up reversed on an appeal or through a court judgment.