Fearing an Audit?
To go along with yesterday’s post, Audit Red Flags, the next question usually is: “So what happens when you get an audit letter from the IRS?” There are several different letters you can receive, not all of which are “audits.” I’ve seen several where people are informed by the IRs that they are due to receive more money back. To make a long story short: don’t get worried when you suddenly get a letter from the IRS. But what should you do?First thing: don’t panic. Read the letter carefully. It might not say that you’re being audited. There are several different letters that the IRS issues that have to do with changes on your taxes.
Secondly: don’t go running to an EA, lawyer, or CPA. There is a due date on the letter when they expect a response by. Do some research, read carefully what they are looking at. You can then get all the information requested together and bring all of that to the EA/CPA/lawyer. This will save you time in the long run and since these type of services usually charge by the hour, you just saved yourself money. However, be sure to get the letter and information to your representative with plenty of time.
Finally: If you decide to go meet with the IRS, don’t volunteer any information that is not specifically asked for. This applies to all steps of the process. Don’t write a letter volunteering info, don’t call and complain and offer info. Only provide what is requested. Any more than that might lead to a more intense scrutany. Don’t give the IRS a reason to look deeper than they believe they should.