An Internal Revenue Service audit examines the accounts and financial information you use to prepare your federal income taxes. An IRS auditor won’t show up at your house without prior communication and scheduling. Even with prior scheduling, audits aren’t all face-to-face, as the IRS conducts many audits by telephone and through the mail. The IRS does also schedule face-to-face audits, however -- at your place of business for business accounts, at your accountant’s office, at your home or at a local IRS office.
The IRS doesn’t use email for notification for audits. It relies on the U.S. mail or telephone, and it follows a telephone call with a letter by U.S. mail. You’ll get a written request for documents needed for the audit. You’re required to keep back-up records for three years from the date of filing your tax return. Contact the auditor if you have questions or don’t understand why the IRS is requesting the information. You’re entitled to know why you are being audited.
Not all audits are cause for alarm, as some are randomly selected by computer. The IRS may audit your account because of high deductions or mismatched forms, such as Form W-2 not matching the income figure you use on the Form 1040. Locate the documents requested by the auditor and review them before your interview. If you use an accountant or tax service for preparation of your taxes, touch base with the individuals who helped prepare your tax return. If you keep your data on electronic files, check with the auditor to be sure the files are compatible with IRS software. Bring hard copies of requested information as well if it's possible.
Agree on a location for the audit interview. You may find it easier to meet where the files are, rather than taking files to the meeting place. Show up early and assemble your information so you can discuss the numbers with the auditor. Reviewing the material with your spouse or partner will prepare you for meeting with the auditor. The auditor will have your audit file and drill down to the figures he wants documented. Work with a spirit of cooperation, and you’ll get done faster.
There are three possible determinations resulting from the audit. The auditor may find no change, and the figures are accurate. The audit may require a change in your tax return, and you agree there was an error. You’ll probably sign for the first or second result. If you owe money and you agree there was an error, you figure out how you pay. The third possibility is that the audit reflects a change and you don’t agree with it. A disagreement leads to mediation or an appeal, and you’ll probably get several more letters, telephone calls and invitations to meet with IRS auditors as a result.
- Comstock/Comstock/Getty Images
- What Are the Dangers of Free File Income Tax?
- How to Talk With an IRS Tax Advocate
- How to Keep the IRS From Taking a Refund Due to Hardship
- How Far Back Can I Challenge an IRS Audit?
- How to Do an Addendum on My Taxes
- Does Amending Taxes Red Flag Them for Audit?
- How Will I Know if There Was a Mistake on My Taxes?
- How to Change an Income Tax Return After Filing