Only one percent of all tax returns undergo an audit, reports The Motley Fool. If you’re one of the unlucky few, however, the process can be stressful, particularly if you’re self-employed. Take these steps immediately to handle the audit in a professional manner.
Verify The Audit’s Legitimacy
You may receive a phone call claiming you’re subject to an IRS audit and owe money. Don’t be alarmed, and don’t take the bait. This phone call is a common scam. Official IRS audit notices arrive in the mail. Always verify that any communication you get from the IRS is legitimate, and do not give away information like your Social Security Number or your credit card information if you haven’t done due diligence. If you’re confused about the communication, contact our team for insight into what to do next.
Ask For Help
While you could handle the audit on your own, theoretically, why take the risk of making a bad situation potentially much worse? Find and work with a qualified professional who understands tax codes and speaks the language. He can help you remain calm, prepare all required documentation and navigate the audit process successfully.
Review The Questionable Tax Return
Your audit notice will include exactly what type of audit you face and why you’re being audited. Go over your return with a fine-toothed comb, and identify problem areas as well as any documents you may need to support the figures you submitted to the IRS.
Prepare And Organize Documentation
The IRS auditor will need proof that your tax return is correct, so prepare and organize supporting documentation, including receipts, bank statements and other documents. While you can verbally explain details about your tax return, an auditor usually weighs documented proof more heavily.
Reply To The Audit Quickly
Mail requested documents to the IRS or schedule a field audit as soon as possible. Your quick response indicates that you take the audit seriously and intend to comply. This action can also reduce penalties and interest charges that accrue on any unpaid tax you may owe.
Audits are fortunately relatively rare occurrences. But what if it’s happened to you? Don’t panic. Review the steps above, and contact our offices at 720-398-6088 for strategic insight into your next steps.