What to Do if You Are Audited by the IRS
Due to budget cuts at the Internal Revenue Services, less people are being audited each year. Only 1.2 million people were audited last year, down from 1.4 million in 2013. Budget decreases have resulted in the IRS being understaffed by approximately 5,000 employees. This decrease in employees allows less audits to be done each year. If you get audited, make sure you hire a Las Vegas CPA firm fast. They can help you with your taxes and getting everything in order right away.
Even though the number of audits has decreased, approximately one million households are expected to be audited this year. Receiving notice of a tax audit can be extremely frightening; however, there are is no need to panic. A team of financial advisers were asked to give advice to those individuals who were unlucky enough to be audited. Following their advice can help.
The first step is to ensure that the audit is legitimate. Sometimes people get calls or emails from individuals claiming to be from the IRS but are actually trying to get information or money through a scam. If the first notice received is something other than a letter, the IRS should be contacted before any information is given out.
If the audit is real, the next step is to calm down. Unless fraud was deliberately committed by the individual, there is no reason to panic. The letter should be carefully read in order to understand what the IRS wants and then collecting this information.
When going into an audit an individual may want to consider bringing an adviser with them. This can help when going through the audit; however, this option can also be expensive.
Auditors should never be given more time than needed. Only three years are allowed by law for taxes to be examined. If a tax auditor asks for this limit to be waived, then it can give the IRS more time to research the taxes. In addition, one should never underestimate a tax auditor. Questions may be asked that raise other issues. This is another reason that having an adviser present can be helpful.
Being organized is key when going to an audit. Tracking down and bringing all of the information, including receipts, invoices and forms, will help the audit to go quickly. Auditors are generally more forgiving when a form was misplaced, rather than deliberately withheld, so honesty and organization are key.
Lastly, if a payment needs to be made, it is best to make it quickly. Auditors may waive fees if the payment is made in whole, but the interest on a payment plan cannot be waived. This can raise the total by hundreds or thousands of dollars.
A tax audit can be stressful, but it is not the end of the world. Following this tax advice from professionals can make an audit go quickly and smoothly.