When you hear the phrase “tax audit,” the image that probably comes to mind is of a terrified taxpayer sitting across the table from a stern IRS examiner. But the truth of the matter is that real IRS audits often look far different. If you’ve received notice that the IRS is auditing your tax return, you can rest assured that the situation will likely look a lot less like a police interrogation! Here’s how IRS audits actually go.
For starters, many audits take place by mail. This type of audit is called a “correspondence audit” and is typically used by the IRS when there is a significant discrepancy between the data reported on your tax return and the data reported by a financial institution, employer, or other organization. When your numbers don’t match the information reported by another entity, the IRS will generally reach out to you to collect additional information by mail. In some cases, additional tax can be assessed, but in others, the explanation and documentation you submit by mail is all you need to resolve the problem.
Some audits, however, do take place face to face. The good news is that most taxpayers will never have to deal with this type of face-to-face audit, as they are reserved for taxpayers who fail to report significant income, are self-employed high earners, or who otherwise fail to report income sufficient to sustain their lifestyle. But even for a face-to-face audit, taxpayers typically don’t sit across the table from the auditor. In fact, most audit defense professionals (including Taxation Solutions, Inc.), recommend that you do NOT attend your audit. Instead, we suggest that your tax advisor attend in your place. That’s because taxpayers understandably tend to get emotional and are prone to making statements that could broaden the scope of your audit beyond its original purview. On the other hand, your audit defense specialist will represent you professionally and objectively, helping keep your audit on track.
If you are facing an IRS audit, know that it’s not an interrogation and that there is nothing to fear. Call in the qualified tax help specialists at Taxation Solutions, Inc., and our professionals will provide effective audit representation to help ensure the situation ends as well as possible. Learn more about IRS audits when you call for your free initial consultation today!