Getting audited by the IRS isn’t extremely likely for most individuals and businesses with average incomes and organized reporting and filing policies. Effective tax administration and avoiding red flags on returns can save you a lot of trouble, but audits do happen. If you’re a Texas business or individual who does get an audit request from the IRS, there are some things you can do to increase the chances of a positive outcome.
First, don’t give the IRS anything they didn’t ask for. Providing extra documents or information only opens you up to more risk, and auditors don’t really have time to review all that information. Simply provide the documents requested in as complete and organized a fashion as possible.
Make sure you are organized. Keep all documentation when preparing a return, including receipts and other back up. You should keep documents for at least three years, as that’s the IRS statute of limitations on audits. If there are any potential problems with your return, the statute can be longer, so keeping documents for up to six years isn’t a bad idea.
Be honest and brief when answering questions. When providing an IRS agent with information, always keep your originals. Provide legible copies and never give up the only copy you have of any document.
Although you can be civil and friendly, don’t make friends with the IRS agent. Keep things limited to the business at hand. Finally, be as calm as possible. Arguing or getting upset with the IRS agent doesn’t help your case.
Professional assistance can help you present a calmer, stronger case to an IRS agent. A third party is less likely to get upset, which could result in a better negotiation process and a more positive audit outcome.
Source: CBS Moneywatch, “What to do when IRS auditors want to talk” Ray Martin, May. 30, 2014
