Find Out What To Do If You’re Audited by the IRS

No one actually wants to be audited by the Internal Revenue Service (IRS). But if you found out tomorrow that were to be audited, would you know what to do? In this entry, we’ll talk about IRS audits.

What is an IRS Audit?

Simply put, an audit carried out by the IRS is an examination of your individual or business financial records. The goal of the audit is to make sure you’ve filed your tax return correctly and accurately.

How Likely Are You To Be Audited?

Two words: not likely. Over the last three (3) years, less than 1% of tax filers have been audited. In 2014, just 0.86% of the total tax returns were audited.

How is an Audit Carried Out?

The chances are better than average that you’ll be able to settle everything by mail. In most cases, people merely send in a bit of extra documentation, and that’s the end of it.

How Does Filing Electronically Affect My Chances of Being Audited?

If your taxes are fairly straightforward, there’s really no reason why you shouldn’t file them yourself and online. In fact, if you file them online, you have a better chance of submitted them correctly, because the IRS says the error rate for paper tax returns is 21%.

When Will I Find Out I’m Being Audited?

While most audits are typically initiated within two (2) years of your filing, the IRS maintains a three-year (3) statute of limitation to go over previous returns.

What Should I Do If I’m Audited?

If you do find yourself on the receiving end of an audit, here are a few tips for resolving the situation quickly.

• Ask why you were selected for to be audited. It’s up to the IRS to provide you with information about why you’re being audited, but it’s up to you to ask them. Once you’re clear on the reason for the audit, you’ll be in a much better position to get your materials together.
• Learn how you’re being audited. There are several ways to be audited and each has their own requirement. The four (4) main types of auditing are:

1. Correspondence The IRS is typically looking for checks, receipts and other similar information that can be furnished via mail.
2. Field An agent from the IRS comes to you and conducts the audit in person.
3. Office You’re asked to provide certain documents to your local IRS office, where the audit will be conducted.
4. Taxpayer compliance The most extensive type of audit and requires examining every part of your return.

• Hire a tax lawyer. To make sure you’re navigating the IRS waters the right way, it’s a good idea to talk with a professional tax lawyer.

If You Have Financial Questions, Call The Oswalt Law Group

Our legal team can help you understand your rights and the options you have concerning your financial situation. To schedule a free consultation, call us at 602-225-2222