People hear about tax audits every now and then. The chances of a business owner getting a tax audit is very unlikely in their first year of operation. But throughout your life span, you will definitely be audited at least once or twice. Whether it’s about avoiding tax audits, advice on surviving a tax audit, or realizing when you will be audited, read on to learn more.
Avoiding IRS TAX Audits
Audits are without a doubt a very troublesome hassle and many people have heard tales of the horrors it brings. Even though you believe that you have successfully paid and documented your taxes, the IRS may still audit you. This is why knowing why the IRS might audit you is a good idea if you want to stop them and/or survive the audit.
You need to have some basic understanding on how the IRS audits and why the IRS audits people. This information can prove to be of great help when trying to beat the IRS. By following some simple tips like being honest, using a professional tax software, using a tax professional to file your taxes, and carefully claiming home and office deductions, you can avoid being audited in most cases.
Many people make the mistake of rounding off their tax numbers and end up in more trouble than it was worth. Also keeping a detailed record of your tax deposits can greatly help and reduce the chances of being audited by the IRS.
How to Beat and Survive an IRS Tax Audit
If you didn’t manage to avoid being audited, you don’t have any other choice left but to go through with it. What you absolutely must do is make sure the IRS doesn’t decide to audit anything else other than the original item. There is still a chance that you may actually get refunded and not have to pay anything after the end of the audit; but in most cases, you do end up having to pay.
The auditor isn’t there to make you pay more, nor is he there willingly; he is just doing his job and nothing more. You need to keep a cool head and follow this advise to get through the audit with minimal damage.
Be Honest And Be Brief
When people are stressed, they tend to speak more. Stay cool and answer all the questions normally while just providing the answers truthfully and accurately. Most times people end up talking more due to stress and end up disclosing information that leads to the previous year’s being audited as well. Likewise, you really don’t want to offer them any of your previous year’s tax information. Just answer the questions they ask and nothing more, but make sure it’s true.
Have All The Right Documentation
If you go into an audit with all the required information, chances are you can actually impress the auditor and give the impression of compliance. The auditor can ask for any documentation regarding the current case, so it’s advised that you keep copies of all your documents as the IRS agents tend to lose them quite often.
You don’t need to worry if the auditor asks for a document which you don’t have, people lose stuff and tax documents are no exception. If you can provide enough facts, the auditor will mostly overlook it.
Appeal The Audit
If you feel like there has been an unjust or wrong addition during the audit, you can appeal it. Start by calling your auditor and make the argument as to why you don’t agree with the audit report. If you are having trouble making your point, then you can choose to meet with their manager, appeal with the IRS, or go to tax court.
Get A Professional
Often letting a professional handle your tax audits is by far the smartest idea. They have years of experience, they know how to handle various situations, and they can help you prepare the documentation needed. Most importantly, tax professionals can provide the much needed support and information that may prove to be the determining factor. Tax professional can ensure a better much outcome. Contact us now for a free quote!