Sleuthing your way through a tax audit by yourself is not the same as fixing a leaky faucet or changing your oil. Here are reasons to seek professional help as soon as you receive a notice from the IRS.

I received an IRS notice. Now what?

1. Insufficient records will cost you. When selected for an audit, the IRS will typically issue a written request for specific documents. The list may include receipts, bills, legal documents, loan agreements, and other records. If you are missing something from the list, things get dicey. It may be possible to reconstruct some of your records, but that comes at a cost. You might have to rely on a good explanation to avoid additional taxes, plus a possible 20% negligence penalty.
2. Too much information can add audit risk. While most audits are limited in scope, they can expand that scope based on what they find during their initial review. That means that if they find a document or hear something you say that sounds suspicious, they can extend the audit to additional areas. Preparing proper support and concise, smart answers to their questions is the best approach to limiting further audit risk.
3. Missing an audit deadline can lead to trouble. When you receive the original audit request, it will include a response deadline (typically 30 days). If you miss the deadline, the IRS will change your tax return using their interpretation of findings, not yours. This typically means assessing new taxes, interest, and penalties. If you wish your point of view to be heard, get help right away to prepare a plan and manage the IRS deadlines.

Get help for an IRS notice

Remember, IRS auditors do this for a living – you don’t. Seasoned IRS agents have seen your situation many times and know the rules better than you. Even worse, they are under no obligation to teach you the rules. Just like a defendant needs the help of a lawyer in court, you need someone in your corner who knows your rights and understands the correct tax code to apply in correspondence with the IRS.

Tax audits are never fun, but they don’t have to be pull-your-hair-out stressful. Mapping out a plan and taking it step by step ensures the best possible outcome. With help, you’ll rest easy knowing your audit situation is being handled with the proper expertise by someone who also has your best interests in mind. Contact our RRBB advisors if you have received a notice or have any questions or concerns.