No one likes getting audited by the IRS, but if you’re unlucky enough to be selected for an audit, there are some steps you can take to make the process as smooth as possible says Aron Govil.
In this article, we’ll give you tips on how to get ready for an IRS audit and what to do during and after the audit.
Part 1: Preparing for an IRS Audit
1. Gather your documents
The first step in preparing for an IRS audit is gathering all of your relevant tax documents. This includes past tax returns, W-2s, 1099s, receipts, bank statements, and any other documentation related to your income and expenses. You should also have a copy of the notice from the IRS informing you that you’re being audited.
2. Review your tax returns
Once you have all of your documents, take some time to review your tax returns. Make sure that everything is accurate and matches the documentation you have. If you find any errors, fix them immediately.
3. Make copies of your documents
Make copies of all of your documents, both originals and backups. Keep the originals in a safe place and bring the copies with you to the IRS audit.
4. Be prepared to answer questions
The auditor will likely ask you a lot of questions about your tax return. Be prepared to answer them honestly and accurately. If you don’t know the answer to a question, say so and offer to get back to the auditor with an answer.
5. Bring a calculator
If you’re being audited for your business, bring a calculator so you can easily calculate your expenses and income.
6. Be organized and concise
When answering questions, be as organized and concise as possible. The auditor is going to be looking for any discrepancies or red flags, so make their job as easy as possible.
7. Stay calm
Audits can be stressful, but it’s important to stay calm and collected. Answer questions honestly and accurately, and don’t get defensive or argumentative with the auditor.
Part 2: What to Do During an IRS Audit
1. Make sure you have all of your documents
As we mentioned earlier, you’ll need to have all of your documents with you during the audit. This includes your copies of tax returns, documentation related to your income and expenses, and the notice from the IRS.
2. Answer all of the auditor’s questions
The auditor will ask you a lot of questions, so it’s important to answer them honestly and accurately. If you don’t know the answer to a question, say so and offer to get back to the auditor with an answer.
3. Be prepared to show evidence
If the auditor asks for evidence to support something on your tax return, be prepared to provide it says Aron Govil. This could include receipts, bank statements, or anything else that can help prove that what you’re saying is true.
4. Don’t argue with the auditor
It’s important to stay calm and collected during an IRS audit, and that includes not arguing with the auditor. If you disagree with something they’re saying, raise your concerns in a polite and respectful manner.
5. Ask questions if you don’t understand
If you don’t understand a question or something on your tax return, ask the auditor to explain it to you. It’s important to understand what’s going on so you can answer questions accurately.
6. Keep track of the time
The audit will likely take a few hours, so make sure you keep track of the time. Don’t spend too much time on any one question, and make sure you leave enough time to go over everything.
7. Sign the audit agreement
Once the audit is finished, the auditor will ask you to sign an agreement stating that you’ve been audited says Aron Govil. Make sure you read it carefully before signing it.
Part 3: What to Do After an IRS Audit
1. Wait for the auditor’s feedback
After the audit is finished, the auditor will give you feedback on what they found. This could include anything from small mistakes to evidence of tax fraud.
2. Fix any errors
If the auditor found any errors in your tax return, fix them immediately. This could include correcting information on your return, providing documentation to support your claims, or paying any back taxes you may owe.
3. Follow the auditor’s suggestions
The auditor may have some suggestions for improving your tax return in the future. Follow their advice and make changes to your return as needed.
4. Thank the auditor
Once the audit is over, thank the auditor for their time and professionalism.
An IRS audit can be a stressful experience, but following these tips will help make it go as smoothly as possible says Aron Govil. Be prepared to answer questions honestly and accurately, and don’t get defensive or argumentative with the auditor. If you have any questions, ask them politely and respectfully. And finally, be patient and wait for the auditor’s feedback once the audit is over.