How To Handle An Audit By The Internal Revenue Service?

Article By Patrick Mansfield | Best Rated Law Firms | 02/23/2023

Article Summary

  • How To Handle An Audit By The Internal Revenue Service?

    1. Make Sure You Receive a Letter or Notice of an Audit.


    2. Collect Any Documentation Needed for the Audit and Gather Relevant Information Ahead of Time.


    3. Follow Instructions in the Notice and Ask Questions If Necessary.


    4. Attend Meeting with The IRS Examiner or Tax Auditor and Respond to All Questions Honestly & Accurately.


    5. Consider Engaging a Tax Professional or law firm To Guide You Through The Process, if Necessary.


  • Please Read A Brief Disclaimer

    Best Rated Law Firms is not a lawyer or a law firm and does not engage in the practice of law or provide legal advice or legal representation. All information, services, and comments provided on the site are for informational and self-help purposes only and are not intended to be a substitute for professional legal advice. Before deciding to engage on a Law Firm listed on Best Rated Law Firms we encourage visitors to do their own research. Please visit our Disclaimer page for more information.

Properly preparing and handling an audit from the Internal Revenue Service (IRS) is a stressful situation many business owners find themselves in. It’s important to remain cooperative while doing the necessary preparation that can help you weather any storm. Here are some tips on how to handle an audit by the IRS.


Read All Letters Carefully


The best way to prepare for an audit is to read all correspondence related to it very carefully. The notice or letter sent out by the IRS will be clear about what records, documents, or other items need to be presented in order for the audit to proceed smoothly. Prepare these materials before and make sure you understand why they are needed so you can answer any questions from the auditors accurately.


Gather Support Documents


Make sure you gather evidence and support documents pertaining to your business activities such as receipts, bank statements, contracts, invoices, etc., that demonstrate compliance with applicable laws. That way when questions come up during the audit, you’ll be able to easily answer them with evidence-backed proof.


Talk To A Professional Accountant Or Law Firm


You should consult a reputable accountant or lawyer familiar with tax law who can provide advice on preparing your documents and negotiating with the IRS if necessary. Having a professional point of view at least gives you a good idea of what could come up during the process and how best to respond when an issue arises during your audit.


Be Proactive During The Audit Process


During the actual auditing process there will be meetings between yourself and an IRS auditor who needs certain information confirmed or clarified in order for their investigation into your financial dealings move forward. Be prepared to offer concrete answers quickly and politely . If something doesn't make sense or even seems wrong , ask detailed questions first — before jumping immediately into providing incorrect answers . Doing so not only shows that you’re engaged but also allows for clarification rather than leave potential misunderstandings unresolved .


Understand Your Rights As A Taxpayer


It’s important for taxpaying businesses or individuals faced with an audit understand their legal rights under US tax law There are specific actions within audits that must follow guidelines set out by the IRS – however , taxpayers still have certain protections available like those afforded through reasonable cause provisions . In cases where errors may have been made due unavoidably like natural disasters or certain medical situations, reasonable cause may apply which would allow adjustments being made accordingly.


Share by: