The Benefits of Seeking Professional Help for an Income Tax Audit – A Guide

The Internal Revenue Service offers various audit types. Correspondence audits are the gentlest, with an IRS agent sending letters to resolve minor discrepancies; office and field audits involve in-depth visits from an IRS agent who inspects both your home or place of business.

Tax attorneys or professionals can offer valuable guidance throughout the tax preparation process. By staying organized and seeking assistance as necessary, proactive measures such as staying compliant and being proactive with filing can reduce risk and ensure compliance.

1. Save Time and Money

The Internal Revenue Service can take considerable time and resources to conduct an audit, even if no illegal acts were committed by you. Even so, an audit process is both stressful and expensive.

Employing the services of an enrolled agent or tax attorney can make the audit process go more quickly and smoothly, protecting you from accidentally incriminating yourself or risking criminal penalties by making sure that only required information is disclosed.

By being prepared and organized prior to an audit, they can save you both time and effort by having all your paperwork organized for audit day. Finally, they can help avoid penalties by appealing any adjustments made by auditors – this is particularly important given that even minor adjustments could add hundreds or even thousands in taxes and interest payments.

2. Avoid Mistakes

If you are audited by the IRS, it’s crucial that your records provide to them are accurate, consistent, complete, and substantiated. Furthermore, oversharing or providing unnecessary details could raise suspicion among agents leading to additional audit issues and penalties for you.

Double-checking math and avoiding rounding numbers are two ways you can avoid making errors that could trigger an audit. Reporting significant charitable deductions without supporting documentation may raise eyebrows as well. During an audit process it’s also essential that you remain honest and courteous – if the auditor becomes aggressive or hostile it would be wiser to request speaking with their manager and negotiate for a more satisfactory resolution.

3. Reduce Stress

IRS audit processes can be an extremely trying experience for all individuals; they can be particularly challenging for self-employed or inconsistent income earners. Therefore, staying organized throughout the year is vitally important so as not to cause undue strain during tax preparation time.

Stay honest and avoid withholding information from an auditor, as any suspicion they detect could prompt further investigations into other areas. A tax professional is an invaluable asset if needing help through the audit process.

An audit is designed to verify the accuracy of your taxes. Typically, the IRS will accept your original filing if there are no discrepancies during an audit; otherwise a CPA or attorney can help file an appeal on your behalf.

4. Reduce the Risk of Penalties

As with any tax matter, any mistakes detected by the IRS could incur penalties that include fines and interest charges; additionally criminal charges could even follow if fraud has been established.

Assuming professional assistance will reduce penalties, having them prepare your return and keep track of related documentation can help avoid basic math mistakes that lead to audit selection. Furthermore, having all related documents handy could allow them to better explain any significant variations in income or deductions between years.

Be sure to submit all requested records, such as receipts, invoices, business documents, canceled checks, credit card statements and bank statements. Remember that audits focus heavily on credibility; any falsified numbers or falsified documentation could easily raise suspicion.

5. Ensure Compliance

An IRS audit is often complex and requires considerable documentation and evidence; an experienced tax attorney can assist in complying with tax laws while mitigating penalties you may encounter.

The duration of an audit depends on its type. Correspondence audits typically last shorter and are less rigorous than field or office audits.

Prior to meeting with an IRS examiner, it is vitally important that you organize all relevant accounting records from the year being audited. Being organized will demonstrate your conscientiousness while speeding up the auditing process by only showing auditors what information they require for review. Furthermore, all deadlines should be met, such as scheduling the audit appointment, providing requested data or responding to initial audit reports.